The benchmark indices were moving on a flatline on Thursday after the gross domestic product (GDP) data showed growth declined to 6.1% in the January-March quarter, with India losing the tag of being the world's fastest growing major economy to China.
At 9:17 am, the S&P BSE Sensex was trading at 31,121, down 24 points, while the broader Nifty50 was ruling at 9,612, down 8 points.
In the broader market, the S&P BSE Midcap and the S&P BSE Smallcap indices outperformed to gain 0.1% and 0.2%, respectively.
"We expect the consolidation to continue as the market has now entered a strong resistance zone of 9,620-9,720 levels. At this juncture, traders should look to
use intraday dips as a buying opportunity around the support levels and look to lighten up near the resistance zone. For the coming session, 9,581-9,547 remains to be an immediate support zone for the index," said brokerage Angel Broking in a technical note.
GDP growth enters slow lane
The GDP growth hit at least a four-quarter low in Q4, primarily because of demonetisation adversely affecting economic activity. The sectors worst affected were construction and financial services.
Without indirect taxes, growth figures would be more dismal. Gross value added (GVA), the difference between gross domestic product (GDP) and net indirect taxes, grew by only 5.6 per cent in Q4 — the lowest in at least eight quarters, according to official figures released on Wednesday. CLICK HERE FOR THE FULL REPORT
“The sharp slowdown in Q4 continues to reiterate the fact that demonetisation has taken a toll on FY17 growth, and this conforms with the already tepid high frequency data. While the slowdown in the economy was already visible before demonetisation, it became more pronounced in the second half of the financial year. Going ahead, we expect the consumption-led story to continue and it will remain the key catalyst of growth aided by easing financial conditions, higher rural wages and boost from impending salary hikes for state, with exports providing further support. Slow growth along with a sharply lower than expected inflation trajectory is likely to keep RBI on the softer side of the fence," said Upasna Bhardwaj, senior economist at Kotak Mahindra Bank
Global markets
Asian stocks were mostly lower. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.2% and looked set for its fifth straight session of losses as investors took profits after stocks hit a two-year high last week.
Japan's Nikkei advanced 0.8% after data showing recurring first-quarter corporate profits were the highest on record for the January to March period.
Australian stocks retreated 0.2%. South Korea's KOSPI fell 0.3% and the Korean won weakened 0.2% to trade at 1,121 won to the dollar after data showed factory activity in May shrank for the 10th straight month.
Overnight, Wall Street closed slightly lower as financials lost ground after JPMorgan and Bank of America warned of revenue weakness in the current quarter, but gains in defensive plays offset the decline.
All three major US indexes ended May in positive territory.
(With inputs from Reuters)