Indian equity benchmarks extended their previous session losses with negative start on Wednesday mirroring weakness in the global markets. Domestic indices are trading lower with cut of over half a percent each in early deals on account of selling in Bankex, Energy and IT stocks. Investors are eyeing the key economic data on industrial output and inflation to be released later in the day for further direction. Worries over economic growth also weighted down on the sentiments. Rating agency Moody’s has cut India’s gross domestic product (GDP) forecast for FY22 to 9.3 per cent from the earlier projection of 13.7 per cent and has ruled out a sovereign rating upgrade - at least for now. Traders took note of the United Nations’ statement that India is forecast to grow at 10.1 per cent in 2022, becoming the fastest-growing major economy in the world, but cautioned that the growth outlook of 2021 was highly fragile as the country was the new hotbed of the pandemic. Though, downside remained limited as active Covid cases declined for the third straight day and the fresh Covid cases remained below the 3.5 lakh mark for the second day in a row at 3,48,371. Also, Commerce and Industry Minister Piyush Goyal said a sharp rise in exports in April is giving a hope that the ambitious target of $400 billion merchandise shipments can be achieved this year.
On the global front, Asian markets were trading lower following the negative cues overnight from Wall Street, reflecting concerns about acceleration in the rate of inflation and potential monetary policy tightening by the U.S. Federal Reserve. Traders are also cautious and refraining from making major moves amid the continued surge in coronavirus cases in most markets in the region, particularly in India and Japan. Stock market in Indonesia is closed for Eid al-Fitr. Back home, telecom stocks were in focus as TRAI data showed Reliance Jio added 4.2 million mobile subscribers, Bharti Airtel added 3.7 million users, while Vodafone Idea added 6.5 lakh users in February. In scrip specific developments, Asian Paints and Lupin were in limelight ahead of their earnings results. Siemens soared after it posted an over 90 percent year-on-year (Y-o-Y) rise in consolidated net profit for the March quarter.
The BSE Sensex is currently trading at 48837.44, down by 324.37 points or 0.66% after trading in a range of 48746.58 and 49171.28. There were 9 stocks advancing against 21 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index gained 0.01%, while Small cap index was up by 0.31%.
The top gaining sectoral indices on the BSE were Power up by 1.49%, Utilities up by 1.21%, Realty up by 1.17%, Capital Goods up by 1.10%, PSU up by 0.92%, while Bankex down by 0.84%, Energy down by 0.73%, IT down by 0.48%, TECK down by 0.44%, Consumer Durables down by 0.40% were the top losing indices on BSE.
The top gainers on the Sensex were Power Grid up by 2.64%, NTPC up by 2.53%, Larsen & Toubro up by 1.80%, ONGC up by 0.89% and SBI up by 0.64%. On the flip side, HDFC down by 2.04%, Mahindra & Mahindra down by 1.73%, Hindustan Unilever down by 1.68%, Kotak Mahindra Bank down by 1.44% and Nestle down by 1.31% were the top losers.
Meanwhile, rating agency Moody’s has cut India’s gross domestic product (GDP) forecast for FY22 to 9.3 per cent from the earlier projection of 13.7 per cent. It also pointed out that a sovereign rating upgrade is unlikely in the near future. This is due to the rating agency believing that the quality of India’s growth has also declined, alongside a marked slowdown in the rate of economic expansion in recent years. Also, it has pointed out that India’s credit profile is increasingly constrained by obstacles to economic growth.
It said a high debt burden and a weak financial system remain among the primary obstacles to economic growth, with risks being exacerbated by the coronavirus pandemic. Policymaking institutions have struggled to tackle and contain these risks.
The latest cut in projections came in the wake of a severe health crisis nationwide, brought on by the second wave of the pandemic. Daily cases have remained above the 3-lakh-mark for the past 17 days in a row. However, it has raised its forecast for real GDP in FY23 to 7.9 percent as compared to 6.2 percent earlier. The long term real GDP growth has been pegged at about 6 percent.
The CNX Nifty is currently trading at 14768.90, down by 81.85 points or 0.55% after trading in a range of 14728.15 and 14824.05. There were 19 stocks advancing against 31 stocks declining on the index.
The top gainers on Nifty were Power Grid up by 2.64%, NTPC up by 2.48%, Tata Motors up by 1.90%, Larsen & Toubro up by 1.76% and Coal India up by 1.03%. On the flip side, HDFC down by 2.10%, Mahindra & Mahindra down by 1.75%, Hindustan Unilever down by 1.68%, Shree Cement down by 1.61% and Kotak Mahindra Bank down by 1.44% were the top losers.
Asian markets were trading in red; Nikkei 225 plunged 582.80 points or 2.04% to 28,025.79, Straits Times fell 20.45 points or 0.65% to 3,123.82, Hang Seng declined 110.28 points or 0.39% to 27,903.53, Taiwan Weighted slipped 948.08 points or 5.72% to 15,635.05, KOSPI dropped 66.89 points or 2.08% to 3,142.54 and Shanghai Composite was down by 0.43 points or 0.01% to 3,441.42.