Key indices end flat amid volatility

In a highly volatile session, Indian equity benchmarks ended flat with negative bias amid mixed global cues. Markets made a gap down opening as traders were anxious with the provisional data available on the NSE showing that foreign institutional investors (FII) sold shares net worth Rs 1,622.69 crore on April 03, 2024. However, markets wiped off initial losses and turned mildly in green in late morning deals, as traders found solace with World Bank stating that the Indian economy is projected to grow at 7.5 per cent in 2024, revising its earlier projections for the same period by 1.2 per cent. Buying further crept in as the government has broadly met the tax collection target of over Rs 34.37 trillion for 2023-24 on the back of robust economic activity and improved compliance. The government had raised the target for direct tax collection in FY24 (April 2023 to March 2024) to Rs 19.45 trillion, while for indirect taxes (GST+ Customs + Excise) the target was lowered to Rs 14.84 trillion in the revised estimates (RE) presented in Parliament on February 1, 2024.

Markets managed to keep their heads above water in late afternoon deals, as India Ratings and Research (Ind-Ra) has observed a notable increase in the resolution of cases under the Corporate Insolvency Resolution Process (CIRP), with the percentage of cases closed through the approval of resolution plans reaching 29% in Q3 FY24 (Q3 FY23: 17%).  However, markets failed to hold gains and ended flat as traders avoided to take any long positions as the RBI appointed MPC (Monetary Policy Committee) begin their 3-day meet to discuss policy measures. The RBI will announce the outcome on Friday. There are expectations that MPC may keep the repo rate unchanged.

On the global front, European markets were trading mostly in green as data showed Eurozone inflation softened in March, supporting expectations that the European Central Bank will start lowering interest rates in June. Asian markets settled down on Wednesday as strong U.S. data dented rate cut hopes and oil extended gains amid rising tension in the Middle East, clouding the inflation outlook. Investors also awaited Fed Chair Jerome Powell's speech later in the day and the release of Friday's U.S. non-farm payroll data for additional clarity on the timing and pace of Federal Reserve easing.

Finally, the BSE Sensex fell 27.09 points or 0.04% to 73,876.82 and the CNX Nifty was down by 18.65 points or 0.08% to 22,434.65. 

The BSE Sensex touched high and low of 74,151.21 and 73,540.27 respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.61%, while Small cap index was up by 1.18%.

The top gaining sectoral indices on the BSE were Utilities up by 1.45%, Power up by 1.20%, PSU up by 1.06%, IT up by 0.78% and TECK up by 0.73%, while Realty down by 2.45%, Auto down by 0.37%, FMCG down by 0.27%, Consumer Durables down by 0.23% and Consumer Discretionary down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.97%, TCS up by 1.67%, Tech Mahindra up by 1.56%, Axis Bank up by 1.51% and Bharti Airtel up by 1.41%. On the flip side, Nestle down by 2.62%, Kotak Mahindra Bank down by 1.43%, JSW Steel down by 1.35%, Titan Company down by 1.16% and Bajaj Finserv down by 1.08% were the top losers.

Meanwhile, Deputy Governor M Rajeshwar Rao has said the Reserve Bank of India (RBI) will keep continuous vigil to mitigate risks as unbridled credit growth can be deleterious to the health of a financial entity and if widespread, it could give rise to systemic concerns. Rao said as a regulator, the RBI's endeavour always is to promote a robust and resilient financial intermediation system with an appropriate regulatory and supervisory framework.

He said the technological developments and innovations hold great promise for the financial sector as they have immense potential to increase the reach of financial firms, enhance the range of product offerings and conveniences for customers, expand the ambit of finance to hitherto excluded segments.

He stated ‘At the same time, we need to be alert to the possibilities that the new entrants into the financial services space, including FinTech firms, could significantly alter the universe of financial services providers.’ He added this could affect the degree of market concentration and competition and may give rise to new challenges.

The CNX Nifty traded in a range of 22,521.10 and 22,346.50. There were 20 stocks advancing against 30 stocks declining on the index. 

The top gainers on Nifty were Shriram Finance up by 3.65%, NTPC up by 2.28%, Divi's Lab up by 1.74%, TCS up by 1.71% and Tech Mahindra up by 1.59%. On the flip side, Nestle down by 2.60%, Bajaj Auto down by 2.01%, Dr. Reddy's Lab down by 1.71%, Kotak Mahindra Bank down by 1.39% and Britannia Industries down by 1.31% were the top losers.

European markets were trading mostly in green; France’s CAC rose 18.69 points or 0.23% to 8,148.74 and Germany’s DAX gained 50.08 points or 0.27% to 18,333.21, while UK’s FTSE 100 decreased 28 points or 0.35% to 7,907.09. 

Asian markets settled down on Wednesday following overnight declines in Wall Street as rally in commodities, positive US manufacturing activity and strong jobs data spurred speculation that the US central bank will keep interest rates higher for the time being. Meanwhile, investors were cautiously awaiting Fed Chair Jerome Powell's speech later in the day and the release of Friday's US non-farm payroll data for additional clarity on the timing and pace of Federal Reserve easing. Hong Kong shares dropped after a powerful earthquake in Taiwan raised concerns about possible disruptions to the vital chip-making industry. Moreover, Chinese shares declined even as a private survey data showed service sector activity in the country grew as expected in March.