Benchmarks slip into red in morning deals

Indian equity benchmarks erased initial gains and slipped into red in morning deals, due to uncertainty surrounding the general election results. Traders turned cautious with ICRA Chief Economist Aditi Nayar’s statement that the wholesale food inflation, which is at a four-month high, will continue to be a cause for concern in May and June as heatwave is likely to jack up prices of perishable commodities. Although the impact of high base of last year will play out in July and August, the impact of monsoon will determine the price conditions in the subsequent months. Some concern also came with a private report that even as stocks have bounced back, foreign investors continue to remain aggressive sellers this month. On Tuesday, FIIs net sold stocks worth Rs 4,065 crore, taking the May month’s tally to Rs 33,540 crore. Traders overlooked report by the Global Trade Research Initiative (GTRI) stating that the development of Chabahar Port will help India enhance its logistical capabilities and expand its trade routes to Central Asia and for that there is a need to ensure necessary infrastructure, and processes to effectively manage the cargo flow at the port. On the global front, Asian markets are trading mixed as investors reacted to data showing an unexpected increase in U.S. producer prices and waited for the release of U.S. CPI report later in the day for clues on the Federal Reserve's next steps.

The BSE Sensex is currently trading at 72847.57, down by 257.04 points or 0.35% after trading in a range of 72845.14 and 73301.47. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.34%, while Small cap index was up by 0.58%.

The top gaining sectoral indices on the BSE were Realty up by 1.35%, Power up by 1.24%, Capital Goods up by 0.71%, Utilities up by 0.64% and Industrials up by 0.62%, while Auto down by 0.68%, Bankex down by 0.34%, FMCG down by 0.31%, TECK down by 0.25% and IT down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 0.80%, Tata Steel up by 0.52%, Power Grid Corporation up by 0.15%, HCL Technologies up by 0.10% and SBI up by 0.07%. On the flip side, JSW Steel down by 1.92%, Sun Pharma down by 1.47%, Tata Motors down by 1.15%, Asian Paints down by 0.96% and Hindustan Unilever down by 0.83% were the top losers.

Meanwhile, ICRA Chief Economist Aditi Nayar has said the wholesale food inflation, which is at a four-month high, will continue to be a cause for concern in May and June as heatwave is likely to jack up prices of perishable commodities. Although the impact of high base of last year will play out in July and August, the impact of monsoon will determine the price conditions in the subsequent months.

The wholesale price index (WPI)-based food inflation was at a four-month high of 7.74 per cent in April. Retail food inflation also remained stubbornly high at 8.70 per cent in April 2024, as against 3.84 per cent in April 2023.

Nayar said weather is an important factor in determining the food inflation trajectory. Monsoon was not very favourable last year and this year there are heatwaves in parts of the country. She stated ‘With the onset of summer, prices of perishable items are charting upwards. For the next two months, we expect the food inflation to climb further and then as the base effect turns very supportive, we will end up with temporarily plunging readings in July-August this year’.

The CNX Nifty is currently trading at 22164.75, down by 53.10 points or 0.24% after trading in a range of 22151.75 and 22297.55. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Cipla up by 3.72%, Coal India up by 2.50%, Adani Enterprises up by 1.30%, Dr. Reddy's Lab up by 1.07% and Hindalco up by 0.87%. On the flip side, JSW Steel down by 1.72%, Eicher Motors down by 1.46%, Sun Pharma down by 1.44%, Britannia Industries down by 1.23% and Bajaj Auto down by 1.20% were the top losers.

Asian markets are trading mixed; Jakarta Composite gained 88.02 points or 1.24% to 7,171.78, Nikkei 225 surged 41.21 points or 0.11% to 38,397.27 and Taiwan Weighted added 189.81 points or 0.9% to 21,175.66.

On the flip side, Shanghai Composite weakened 5.43 points or 0.17% to 3,140.34 and Straits Times fell 17.73 points or 0.54% to 3,295.62.