Markets wipe out opening gains; trade with negative bias

Indian equity benchmarks made optimistic start on Monday with the benchmarks BSE Sensex and Nifty50 hitting record highs. Traders took encouragement as USIBC President Atul Keshap said the swearing-in of Narendra Modi as the prime minister for a historic third consecutive term sends a strong message of political and economic stability amidst rising geostrategic uncertainty. Traders took some optimism as retail inflation for industrial workers eased to 3.87 per cent in April compared to 4.2 per cent in March this year.  However, markets wiped out all their opening gains and entered into red terrain. At this point of trade, markets are trading near neutral lines with negative bias. Some cautiousness came in after Fitch Ratings reportedly said as India’s medium-term fiscal consolidation, critical to any ratings upgrade, is likely to get more challenging as a new coalition government comes to power. 

On the global front, Asian markets are trading mixed, Following the broadly negative cues from Wall Street Friday overnight, as traders react to data showing much stronger than expected US job growth in the month of May and also an unexpected uptick in the unemployment rate. The data faded hopes of a rate cut by the US Fed in September. Traders also cautiously await the Fed's latest monetary policy decision later in the week. Besides, the Cabinet Office said Japan's gross domestic product contracted a seasonally adjusted 0.5 percent on quarter in the first quarter of 2024. Moreover, markets in Taiwan, China and Hong Kong are closed for the Dragon Boat Festival.

Back home, auto stocks are trading under pressure amid report that ICRA expects the domestic CV industry’s uptrend to be arrested in FY2025, with a decline of 4-7% in wholesale volumes. This follows a muted YoY growth of 1% and 3% for wholesale and retail sales, respectively, in FY2024. In stock specific development, KEC International zoomed on order win. The company has secured new orders worth Rs 1,061 crore across various sectors, taking the total year-to-date order intake to Rs 3,000 crore.

The BSE Sensex is currently trading at 76591.48, down by 101.88 points or 0.13% after trading in a range of 76501.46 and 77079.04. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.39%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Utilities up by 1.90%, Power up by 1.20%, Telecom up by 1.13%, Realty up by 1.03% and PSU up by 0.81%, while IT down by 1.45%, TECK down by 1.01%, Metal down by 0.35% and Auto down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.65%, Ultratech Cement up by 2.42%, Axis Bank up by 1.39%, NTPC up by 1.28% and Nestle up by 0.71%. On the flip side, Tech Mahindra down by 2.61%, Wipro down by 1.89%, Infosys down by 1.85%, HCL Technologies down by 1.82% and Titan Company down by 1.33% were the top losers.

Meanwhile, Commerce Secretary Sunil Barthwal has said that as India's growth rate continues to outpace other emerging markets, a notable trend of 'reverse flipping' has emerged. He added startups that once relocated abroad for better capital and tax incentives are now finding fertile ground back home. He highlighted that the digital economy and emerging technologies, such as AI and data centers, are cornerstone factors propelling India's future growth. 

The commerce ministry organized an event in Singapore in conjunction with the Indo-Pacific Economic Framework for Prosperity (IPEF) Clean Economy Investor Forum, underscored India's investment potential. The event drew over 60 participants from a global pool of investors and financial institutions, eager to explore opportunities in India's dynamic market.

Meanwhile, the ministry reported that India's economy grew by 8.2 percent in the fiscal year ending March 2024, solidifying its status as the fastest-growing major economy. In the previous 2022-23 fiscal year, the economy grew 7 per cent.

The CNX Nifty is currently trading at 23279.80, down by 10.35 points or 0.04% after trading in a range of 23241.35 and 23411.90. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.65%, Ultratech Cement up by 2.86%, Cipla up by 2.45%, NTPC up by 1.61% and Axis Bank up by 1.50%. On the flip side, Tech Mahindra down by 2.52%, Infosys down by 1.90%, Wipro down by 1.84%, HCL Technologies down by 1.84% and LTIMindtree down by 1.52% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 219.42 points or 0.56% to 38,903.35 and Jakarta Composite gained 22.01 points or 0.32% to 6,919.96. 

On the other hand, KOSPI fell 15.27 points or 0.56% to 2,707.40 and Straits Times was down by 9.77 points or 0.29% to 3,321.00.