What is eating into D-Street's investor confidence?

Welcome to ETMarkets Watch, the show about stocks, market trends and money-making ideas. I am Bhaskar Dutta and here are the top headlines at this hour.

-Passenger vehicle sales dip in March
-March trade deficit at $18.51 billion
-Uber, Ola hike fares in major cities
-Banks ask RBI to allow cloud adoption
-US, India vow to step up defence ties
-Private sector capex cycle to see revival, says Chief Economic Secretary

Let’s take a quick glance at what happened on Dalal Street today.

After starting off on a strong footing, domestic equity markets surrendered gains to end the day lower as soaring inflationary pressures, both global and domestic, hurt risk appetite.

Stock markets had shown firm momentum in early trade, led by buying in index heavyweights Reliance, Infosys and selective financials.
However, with data released Tuesday showing India’s headline retail inflation at a 17-month high of 6.95 per cent, speculation of swift rate hike by the RBI strengthened.

Adding to the market’s worries was a 40-year high inflation reading in the US, which makes a stronger case for the Federal Reserve to aggressively raise interest rates.

Higher rates in the US generally lead to global funds making their way out of emerging markets to the world’s largest economy.

The BSE barometer Sensex swung in a band of 713 points before settling 237 points lower at 58,338.93. The index, which had briefly topped 59,000 during the day, has given up 696 points over the last five trading days.

Its broader peer, the Nifty50, moved in a range of 206 points; going on to close 55 points lower at 17,475.65. The headline index has shed 164 points over the last five days.

Broader markets were mixed, with the BSE midcap index losing 0.2 per cent, while the smallcap index gained 0.3 per cent. Fear gauge India VIX fell 2 per cent to end at 17.79.

20 of the 30 stocks on the BSE Sensex fell, with HDFC losing 2 per cent, followed by HDFC Bank and Maruti, which slid 1.9 per cent each. Dr Reddy’s and Asian Paints shed over 1.5 per cent each.

ITC gained the most, with a 1.9 per cent rise followed by Sun Pharma, which rose 1.7 per cent. HUL and SBI gained a per cent each, while NTPC rose 0.8 per cent.

8 stocks hit upper circuits during the session, while only 3 tested their lower circuit limits. 96 stocks tested their 52-week highs during the session, while 4 stocks tested their 52-week lows.

We have Vikas Jain from Reliance Securities to share his views on the action and the road ahead. Welcome to the show sir:
1. Markets surrendered gains by the end of trade today. What is eating into the market’s confidence?
2. Which are the sectors that are best protected against rising inflation and higher interest rates?

We also caught up with Brijesh Bhatia of Equitymaster to decode the technical charts for you.
1. The Nifty50 settled below the 17,500 mark today. What do the technical charts suggest about it?
2. Nifty Bank fared worse than the headline index. Ahead of earnings announcements, what is your outlook?

Asian markets mostly settled with gains for the day. Major European markets were mixed in the first few hours of trade. Meanwhile, US stock futures were up, signalling a firm start to US equities later in the day.

That’s all for now. Do check out ETMarkets.com for all the news, market analysis, investment strategies and dozens of stock recommendations. Enjoy your evening. Bye Bye!