Benchmarks end with minor cuts on Tuesday

Indian equity benchmarks wiped out intra-day gains and ended with minor cuts in the volatile session on Tuesday on profit booking in heavyweights such as Titan Company, Reliance Industries and Asian Paints. Markets have made positive start and stayed in green during first half as traders took support with report that pointing out the sustained growth of the Indian economy over the past decade, European Parliament think tank expert, Angelos Delivorias said that India's GDP growth exceeding that of China reflects New Delhi's emergence as a formidable economic powerhouse in the global arena. Delivorias stated ‘India has surpassed the growth rate of China, and experts think that it will continue doing so, at least in the short term.’ Sentiments on the street remained positive with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the recent wave of financial market reforms spearheaded by the RBI are geared towards establishing a robust foundation for addressing the burgeoning funding needs of the economy, providing cost-effective hedging alternatives, and enhancing competitiveness in global markets. 

Key gauges maintained their gains in afternoon deals, taking support from private report that India is expected to see a normal monsoon in 2024. Monsoon rains are expected to be 102% of the long-period average of 868.6 mm for the four-month period. Traders took a note of private report that India's consumer price inflation likely eased to a five-month low of 4.91% in March but was still above the Reserve Bank of India's 4% medium-term target as food price rises persist. However, markets failed to keep the positive momentum going and witnessed selling pressure in the late afternoon deals which resulted into a marginal negative close for the indices. Traders turned cautious with the Reserve Bank of India’s (RBI) Report stated that frequent weather shocks caused by climate change pose challenges for the monetary policy as well as downside risks to economic growth. It said global average temperatures are on a rise, with accompanying increase in extreme weather events (EWE), and the economic and social impact of global warming is becoming increasingly evident. Traders also remained on sidelines ahead of Index of industrial production (IIP) and Consumer Price Index (CPI) data, which going to be out on Friday.

On the global front, European markets were trading mostly in red as ceasefire talks between Israel and Gaza stalled, and more Federal Reserve officials warned about upside risks to inflation. Amid much uncertainty about the interest rate outlook, investors looked ahead to crucial U.S. inflation data, the minutes of the Fed's March policy meeting and the ECB rate decision for directional cues. Asian markets settled mostly higher on Tuesday though overall gains remained limited following hawkish comments from Federal Reserve officials and ahead of key U.S. inflation readings due this week.

Finally, the BSE Sensex fell 58.80 points or 0.08% to 74,683.70 and the CNX Nifty was down by 23.55 points or 0.10% points to 22,642.75.  

The BSE Sensex touched high and low of 75,124.28 and 74,603.37 respectively. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.47%, while Small cap index was down by 0.15%.

The top gaining sectoral indices on the BSE were Metal up by 0.53%, Realty up by 0.50%, Bankex up by 0.34%, Healthcare up by 0.17% and Basic Materials up by 0.17%, while Consumer Durables down by 1.10%, Energy down by 0.71%, FMCG down by 0.57%, Industrials down by 0.55% and Capital Goods down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.87%, Infosys up by 1.19%, Bajaj Finserv up by 1.18%, Mahindra & Mahindra up by 0.57% and Tata Steel up by 0.48%. On the flip side, Titan Company down by 1.81%, Reliance Industries down by 1.48%, Asian Paints down by 1.26%, Tech Mahindra down by 1.15% and Indusind Bank down by 1.12% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said the recent wave of financial market reforms spearheaded by the RBI are geared towards establishing a robust foundation for addressing the burgeoning funding needs of the economy, providing cost-effective hedging alternatives, and enhancing competitiveness in global markets. He said ‘Financial market reforms by RBI aimed at providing strong bedrock for markets.’ He stated ‘Retail participation in G-secs through the Retail Direct scheme has been growing. The VRR scheme has attracted interest from FPIs, especially for corporate bonds. In recent months, robust foreign inflows in G-secs have been witnessed. Non-resident participation in OTC derivative markets has increased, adding to liquidity and diversity.’ 

The reform initiatives, spanning various dimensions, have aimed to streamline capital raising, eliminate segmentation between onshore and offshore markets, broaden market participation, foster innovation, fortify market integrity and resilience, and ensure fair conduct by all stakeholders. Das lauded the positive response to regulatory measures, noting the widening participation base across various segments. Foreign inflows into G-secs have surged in recent months, alongside increased non-resident participation in Over-the-Counter (OTC) derivative markets, enriching liquidity and diversity. Notably, convergence in prices and spreads between domestic and overseas markets has been achieved to a considerable extent.

However, he highlighted areas necessitating further attention. He underscored the imperative of expanding the participation of domestic banks in derivative markets, both domestically and offshore, to augment market depth and resilience. He ‘The participation of domestic banks in derivative markets remains limited with only a small set of active market-makers. Participation of Indian banks in global markets is growing but it is quite small. Domestic banks are dealing with market-makers in global markets rather than with end clients and are yet to emerge as market makers of note globally.’

The CNX Nifty traded in a range of 22,768.40 and 22,612.25. There were 16 stocks advancing against 34 stocks declining on the index. 

The top gainers on Nifty were Apollo Hospital up by 3.13%, Hindalco up by 2.05%, ICICI Bank up by 1.89%, Infosys up by 1.39% and Bajaj Finserv up by 1.12%. On the flip side, Titan Company down by 1.78%, Hero MotoCorp down by 1.59%, Coal India down by 1.52%, Reliance Industries down by 1.35% and Asian Paints down by 1.21% were the top losers.

European markets were trading mostly in red; France’s CAC fell 52.32 points or 0.65% to 8,066.98 and Germany’s DAX lost 158.22 points or 0.87% to 18,160.75, while UK’s FTSE 100 increased 1.4 points or 0.02% to 7,944.87.