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Markets likely to open in green following gains in Asian counterparts
May-25-2022

Indian markets failed to hold on to the green for yet another day on Tuesday amid volatile trade on Dalal Street. Losses in IT and FMCG shares pulled the headline indices lower. Today, markets are likely to open in green following gains in Asian counterparts. Sentiments will get a boost with a report that the country's exports rose by 21.1 percent to $23.7 billion during May 1-21, on account of healthy growth in various sectors, such as petroleum products, engineering, and electronic goods. During the second week of this month (May 15-21), the exports grew by about 24 percent to $8.03 billion. Traders may take note of report that pitching India as one of the best investment destinations globally, Union Minister Piyush Goyal asked global business leaders at the World Economic Forum Annual Meeting to come to India and grow with India. Besides, the commerce and industry ministry said as many as 853 foreign direct investment proposals have been disposed of through the foreign investment facilitation portal in the last five years. However, some cautiousness may come as Former World Bank chief economist Kaushik Basu said that even though the fundamentals of the Indian economy are strong, the rise in divisiveness and polarisation in the country is damaging the foundations of the nation’s growth. Basu further said India’s big challenge is unemployment and joblessness as youth unemployment in India is over 24 per cent, which is among the highest in the world. Meanwhile, stressing on the need to focus more on services sector exports, Union Minister Piyush Goyal said it can help boost the country’s overall exports further and called for the government and the businesses to support each other. There will be some buzz in edible oil industry stocks as the government scrapped customs duty and agriculture infrastructure development cess on the import of crude soyabean oil and crude sunflower oil for 20 lakh metric tonnes each per year to ease local prices. Coal industry stocks will be in focus as the government said to meet the rising power demand, coal production increased to 34 million tonnes (MT) in the first half of May, adding that total coal production increased to 33.94 MT, achieving a growth of 36.23 per cent over the production of 24.91 MT during the same period last year. There will be some reaction in sugar sector stocks as the government imposed restrictions on sugar exports from June 1, a move aimed at increasing availability of the commodity in the domestic market and curbing price rise. In the primary market, Aether Industries’ IPO received a 33 per cent subscription on the first day of booking. Investors awaited the last leg of earnings reports from India Inc for cues.

The US markets settled mostly lower on Tuesday as worries that aggressive moves to curb decades-high inflation might tip the US economy into recession dampened investors' risk appetite. Asian markets are trading mostly in green on Wednesday shrugging off a mixed session on Wall Street overnight, though global growth concerns and weak US data keep investors on the back foot.

Back home, Indian equity benchmarks ended volatile session in red on Tuesday. After a cautious start, markets traded volatile, as ICRA Ratings said the economic growth may have slowed to 3.5 per cent in fourth quarter of 2021-22 from 5.4 per cent in the previous three-month period due to the impact of higher commodity prices on margins, decline in wheat yields and on higher base. The agency said the hiccups in the recovery of the contact-intensive services attributable to the third wave of COVID-19 in the country may have also affected the economic growth in the quarter. In early afternoon deals, key indices managed to trade in green terrain for a little time. Domestic sentiments were positive, as capital markets regulator Sebi allowed mutual funds to launch passively managed Equity-Linked Savings Schemes (ELSS). But again, markets came back in red in the last hours of the trade to end on a lower note, amid a private report stating that the Centre's decision to cut excise duty on petrol and diesel will put pressure on the fiscal deficit which has been estimated at 6.4 per cent of GDP for the current financial year. Besides, metal stocks remained in focus as Icra reacting to the duty-related measures taken by the government said the domestic steel sector has been hit by a moving train. Besides, infra sector stock were also in focus, as Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral outlook for the overall infrastructure sector for FY23, amid likelihood of a stable operating performance for majority of the projects, long-term visibility of revenue under concession agreements and power purchase agreements, and expected improved cargo and traffic volumes. Finally, the BSE Sensex fell 236.00 points or 0.43% to 54052.61 and the CNX Nifty was down by 89.55 points or 0.55% to 16125.15. 

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