Post Session: Quick Review

Indian equity benchmarks ended lethargic day of trade near intra-day low points amid gloominess across global markets as worries persisted about aggressive policy tightening by the Fed. Local equities markets made gap- down opening, as traders were cautious after fourth round of the Quarterly Employment Survey (QES) released by the Labour Ministry showed that employment generation in nine non-farm sectors slowed down in the March quarter of FY22, possibly under the impact of Omicron variant of Covid-19, with additional job creation dipping to 350,000 during the quarter, from 390,000 in the preceding December quarter of the financial year. However, markets pared some of their losses to trade near neutral lines, as traders took some support with a drop in oil and commodity prices, investment in the Indian capital markets through participatory notes rose to Rs 84,810 crore at the end of August, after three consecutive monthly declines.

Traders took note of private report that interest rate hikes in the United States and the resultant pressure on the rupee is likely to give the Reserve Bank of India (RBI) reason to deliver a 50-basis-point rate hike on Friday even as it tries to protect a recovery in growth. The RBI’s monetary policy committee (MPC) has already hiked the key policy rate by 140 bps since May to 5.4%. Since the last policy meet, retail inflation has risen above 7% again and the rupee has weakened 9.5% on-year, with pressure on the currency accelerating after the U.S. Federal Reserve’s meeting last week. But, markets witnessed sharp selloff in afternoon session and ended near lowest points of day as sentiments on the street weakened after rupee depreciated 40 paise to an all-time low of 81.93 against the US dollar as the strengthening of the American currency. 

On the global front, European markets were trading lower as investors fretted after a series of unusual leaks on two natural gas pipelines running from Russia under the Baltic Sea to Germany triggered concerns about sabotage and Britain's radical tax cuts to spur growth. Back home, Foreign Institutional Investors (FIIs) were stood sellers (net) in the capital market on Tuesday as they offloaded shares worth Rs 2,823.96 crore, exchange data showed. Besides, Investors are eyeing the Reserve Bank's rate-setting panel to start its 3-day deliberations today amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed.

The BSE Sensex ended at 56,598.28, down by 509.24 points or 0.89% after trading in a range of 56,485.67 and 57,213.33. There were 11 stocks advancing against 19 stocks declining on the index (provisional).

The broader indices ended in red; the BSE Mid cap index declined 0.47%, while Small cap index was down by 0.43% (provisional).

The few gaining sectoral indices on the BSE were Healthcare up by 0.46%, IT up by 0.28%, TECK up by 0.25% and Auto was up by 0.08%, while Metal down by 2.32%, Bankex down by 1.52%, Energy down by 1.09%, PSU down by 1.09% and Utilities was down by 1.08% were the top losing indices on BSE (provisional).

The top gainers on the Sensex were Asian Paints up by 2.87%, Sun Pharma up by 2.21%, Dr. Reddy's Lab up by 1.79%, Nestle up by 1.23% and Power Grid up by 1.20%. On the flip side, Axis Bank down by 3.23%, ITC down by 2.94%, Reliance Industries down by 2.69%, Tata Steel down by 2.41% and SBI down by 2.29% were the top losers (provisional).

Meanwhile, Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta has said that the net direct tax collection has increased 23 per cent to Rs 7.04 lakh crore so far in FY23. He said the income and corporate tax collections were at a record high of Rs 14.09 lakh crore in 2021-22.

Gupta said the I-T e-filing portal has stabilised and it has facilitated 5.83 crore tax return filing as of July 31. A record 72 lakh returns were filed on the portal on a single day. July 31 was the last date for filing ITRs for salaried individuals for income earned in the 2021-22 fiscal.

He further said I-T refunds worth Rs 1.41 lakh crore have been issued so far this fiscal, which is an increase of 83 per cent over the same period last year.

The CNX Nifty ended at 16,858.60, down by 148.80 points or 0.87% after trading in a range of 16,820.40 and 17,037.60. There were 18 stocks advancing against 32 stocks declining on the index (provisional).

The top gainers on Nifty were Asian Paints up by 2.88%, Sun Pharma up by 2.31%, Dr. Reddy's Lab up by 2.11%, Eicher Motors up by 1.62% and Power Grid up by 1.39%. On the flip side, Hindalco down by 3.44%, JSW Steel down by 3.22%, ITC down by 2.96%, Axis Bank down by 2.85% and Reliance Industries down by 2.66% were the top losers (provisional).

European markets were trading lower, UK’s FTSE 100 decreased 123.45 points or 1.77% to 6,861.14, France’s CAC decreased 83.90 points or 1.46% to 5,669.92 and Germany’s DAX was down by 241.67 points or 1.99% to 11,898.01.

Asian markets settled down on Wednesday on persistent worries over global recession in the wake of aggressive monetary tightening in major economies, while concerns of Europe's energy crisis, United Kingdom’s tax cutting plans and hawkish comments from Federal Reserve officials have also made investors nervous. Chicago Fed President Charles Evans, St. Louis Fed President James Bullard and Minneapolis Federal Reserve Bank President Neel Kashkari all said they need to keep raising interest rates to restore price stability. Seoul shares dropped as the Korean won hit a 13-year low. Chinese shares declined sharply as the yuan hit a record low, while Hong Kong shares plunged ahead of China's Communist Party Congress in October. Japanese shares fell as investors fretted about the inflationary impact of the yen's recent sharp moves.

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