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Benchmarks extend losing run to third consecutive day
May-25-2022

Extending the losing run to the third consecutive day, Indian equity benchmarks ended with losses of over half percent on Wednesday, dragged by heavy selling pressure in IT, Realty and Industrials stocks. Benchmark indices opened in green as traders took some support with Union Minister for Commerce and Industry Piyush Goyal’s statement that India's exports rose to a record high of $421.8 billion during the financial year ended March 2022 despite the COVID-19 pandemic and global supply chain disruption and the shipment may surge to $1 trillion by 2030. However, key gauges failed to hold on to the gains and slipped into red terrain in late morning session, as traders turned cautious with Former World Bank chief economist Kaushik Basu’s statement 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.

Markets extended losses in late afternoon deals, as some pessimism also came in with report that India was ranked at the 54th place in a global travel and tourism development index, down from 46th in 2019, but still remained on the top within South Asia. Traders also took a note EEPC India stating that export of engineering goods to CIS countries including Russia and Ukraine fell the most year-on-year during April 2022, while that to North America registered the highest growth during this period. As per the region-wise data, exports to CIS countries slumped to $25.1 million in April 2022 from $90 million in the same month last year. Also, surging global crude prices and persistent foreign capital outflows weighed on investor’ mood. Foreign Institutional Investors (FIIs) remained net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,393.45 crore, exchange data showed.

On the global front, European markets were trading higher after a measure of German consumer sentiment edged up from an all-time low in May. Market research group GfK said its forward-looking consumer sentiment index rose to -26.0 in June from a revised -26.6 in May. Asian markets ended mostly higher on Wednesday despite the mostly negative cues from Wall Street, as traders cautiously await the release the US Fed's minutes from its latest monetary policy meeting, which may shed additional light on the outlook for interest rates. U.S. President Joe Biden's remarks that he might drop trade tariffs on China also resulted in improved risk sentiment.

Back home, sugar sector stocks were in focus 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. Coal industry stocks were in watch 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.

Finally, the BSE Sensex fell 303.35 points or 0.56% to 53,749.26 and the CNX Nifty was down by 99.35 points or 0.62% to 16,025.80. 

The BSE Sensex touched high and low of 54,379.59 and 53,683.16, respectively. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 1.93%, while Small cap index was down by 2.94%.

The only gaining sectoral index on the BSE was Bankex up by 0.21%, while IT down by 3.19%, Realty down by 3.02%, Industrials down by 2.66%, Consumer discretionary down by 2.47% and Capital Goods down by 2.44% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.84%, Kotak Mahindra Bank up by 1.42%, Bharti Airtel up by 1.41%, HDFC up by 1.35% and Nestle up by 1.02%. On the flip side, Asian Paints down by 8.04%, TCS down by 3.69%, Tech Mahindra down by 3.53%, Wipro down by 3.30% and Larsen & Toubro down by 3.09% were the top losers.

Meanwhile, Union Minister Piyush Goyal has said that there is need to focus more on services sector exports and added that it can help boost the country's overall exports further. He also called for the government and the businesses to support each other. He also said the presence of India has been very very noticeable this time in Davos. Referring to the challenges posed by the COVID pandemic, He said that ‘despite supply chains having been strained amid global challenges, we have done exceedingly well in terms of exports and other parameters’.

According to him, a record level of $250 billion of exports came without hospitality and some other key sectors and an extra focus on services sector can help improve the export growth much more. He added that India now needs to look at value-added exports. It is important to bring jobs to the country. He said ‘logistics is one cost where the government is very seriously looking at and if there are any other concerns, the industry may have, we are open to look at each of those’.

He further said ‘we are willing to dedicate senior government officials to oversee large projects. In the larger scheme of things, we all need to support each other to bring scale to the country’. Urging foreign companies to invest in India, he said ‘India has got not only the demographic dividend, a young population, but also a huge talent pool’.

The CNX Nifty traded in a range of 16,223.35 and 16,006.95. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were NTPC up by 3.88%, HDFC Life Insurance up by 2.91%, SBI Life Insurance up by 1.92%, Bharti Airtel up by 1.47% and ONGC up by 1.43%. On the flip side, Asian Paints down by 8.03%, Adani Ports down by 5.60%, Divi's Lab down by 4.09%, UPL down by 3.98% and Tech Mahindra down by 3.13% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 47.22 points or 0.63% to 7,531.57, France’s CAC increased 15.51 points or 0.25% to 6,268.65 and Germany’s DAX increased 37.13 points or 0.27% to 13,956.88.

Asian markets ended mostly higher on Wednesday even as the investors were cautiously awaiting for further cues ahead of the US Fed's minutes from its latest monetary policy meeting. US President Jeo Biden's remarks that he might drop trade tariffs on China supported market sentiments. Chinese shares gained with expectations that growth would likely strengthen in the second half of 2022 in response to the stimulus measures that China has introduced into the economy. While, Shanghai authorities plan to keep most restrictions in place this month, before a more complete lifting of the two-month-old lockdown from June 1. China's central bank and banking regulator urged lenders to boost loans in the latest effort to shore up Covid-battered economy. However, Japanese shares settled slightly down tracking declines on Wall Street overnight.

Asian Indices

Last Trade           

Change in Points

Change in %

Shanghai Composite

3,107.4636.531.19

Hang Seng

20,171.2759.170.29

Jakarta Composite

6,883.50-30.64-0.44

KLSE Composite

1,535.564.260.28

Nikkei 225

26,677.80-70.34-0.26

Straits Times

3,187.39-7.65-0.24

KOSPI Composite

2,617.2211.350.44

Taiwan Weighted

16,104.03140.400.88
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