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Indian equity benchmarks ended the disappointing day of trade in red terrain with Sensex and Nifty settling below their crucial 48,700 and 14,700 levels, respectively. Sentiments remain dampened since beginning of the trade as traders remain worried over economic growth. 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 also 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. 

Markets traded continuously in red throughout the day as domestic rating agency Care Ratings revised its GDP growth forecast for the current fiscal to 9.2 per cent from 10.2 per cent it had estimated earlier. This is the fourth revision by the rating agency in its GDP growth forecast for FY2021-22 since March this year. On March 24 this year, it had projected GDP growth for FY22 at 11-11.2 per cent but revised downwards forecast to 10.7 per cent on April 5 and further to 10.2 per cent on April 21. Sentiments also weighed down on reports that overall job postings declined by 4 per cent (year-on-year) as of April and openings for entry-level roles declined by 5 per cent (month-on-month), according to latest data provided by the company. Industries like travel and tourism, education and engineering, cement, construction, iron/steel continue to show decline in job postings. The employment index by online job search platform Monster saw a decline in job posting activity in April compared to March by 3 per cent.

On the global front, European markets were trading mostly in green after their worst selloff this year as strong earnings reports and signs of a speedy economic recovery offset concerns about a rapid rise in prices. Asian markets settled mostly lower on Wednesday, even after Malaysia's economy contracted at a slower pace in the first quarter underpinned by the improvement in domestic demand and exports. Gross domestic product declined 0.5 percent annually in the first quarter, but slower than the 3.4 percent decrease seen in the fourth quarter, Bank Negara Malaysia reported. The economic activity gradually picked up as the restrictions related to the COVID-19 were relaxed in February and March.

Back home, 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 sectoral front, telecom stocks remained 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. Auto industry also remained in focus, as auto industry body, the Society of Indian Automobile Manufacturers (SIAM) in its latest report has showed that passenger vehicle wholesales in India declined by 10 per cent to 2,61,633 units last month as compared to 2,90,939 units in March 2021, as COVID-19-led restrictions across various states impacted demand.

Finally, the BSE Sensex declined 471.01 points or 0.96% to 48,690.80, while the CNX Nifty was down by 154.25 points or 1.04% to 14,696.50.

The BSE Sensex touched high and low of 49,304.47 and 48,550.72, respectively and there were 7 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.90%, while Small cap index was down by 0.62%.

The lone gaining sectoral index on the BSE was Auto up by 0.26%, while Metal down by 3.22%, Basic Materials down by 1.62%, Bankex down by 1.44%, Oil & Gas down by 1.22%, Energy down by 1.15% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.31%, Maruti Suzuki up by 1.21%, Power Grid Corporation up by 1.05%, SBI up by 0.93% and NTPC up by 0.53%. On the flip side, Indusind Bank down by 3.35%, Hindustan Unilever down by 3.07%, ONGC down by 2.54%, ICICI Bank down by 2.43% and Axis Bank down by 2.23% were the top losers.

Meanwhile, amid the second wave of the COVID-19 pandemic, domestic rating agency Care Ratings in its latest report has revised downward its gross domestic product (GDP) growth forecast for the current fiscal to 9.2 per cent from 10.2 per cent it had estimated earlier.

This is the fourth revision by the rating agency in its GDP growth forecast for FY2021-22 since March this year. On March 24 this year, it had projected GDP growth for FY22 at 11-11.2 per cent but revised downwards forecast to 10.7 per cent on April 5 and further to 10.2 per cent on April 21.

Care Ratings further noted that the GDP in FY21 was Rs 134.08 lakh crore that was to increase to Rs 148.83-149.10 lakh crore as per its March forecast, but the GDP level in real terms will be Rs 146.42 lakh crore based on 9.2 per cent growth. It further said that the lower growth in GDP compared to initial estimate of 11.2 per cent would mean a loss of Rs 2.68 lakh crore in real terms or Rs 3.89 lakh crore in nominal terms.

The CNX Nifty traded in a range of 14,649.70 and 14,824.05 and there were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.31%, Titan Company up by 1.37%, Maruti Suzuki up by 1.20%, Power Grid Corporation up by 1.14% and UPL up by 1.07%. On the flip side, Tata Steel down by 4.44%, JSW Steel down by 3.59%, Hindalco down by 3.39%, Indusind Bank down by 3.39% and Hindustan Unilever down by 3.05% were the top losers.

European markets were trading mostly in green, UK’s FTSE 100 increased 37.11 points or 0.53% to 6,985.10 and Germany’s DAX increased 15.42 points or 0.1% to 15,135.17. On the flip side, France’s CAC was down by 2.12 points or 0.03% to 6,265.27.

Asian markets settled mostly lower on Wednesday ahead of the much-awaited US consumer inflation data due out later in the day. Further, dip in Wall Street overnight with worries about accelerating US inflation and possibly earlier rate hikes too adding pressure on market sentiments. Positive data on US job openings also added to concerns about inflation. Seoul shares declined even as data showing that unemployment in South Korea dropped to an eight-month low in April and the number of people employed rose at the sharpest pace in nearly seven years as the economic recovery continues. Japanese shares fell sharply on concerns over accelerating daily corona-virus infection rates in the Japanese country. Although, Chinese shares ended higher after a quarterly report by China’s central bank downplayed inflationary concerns, while at the same time the United States government has agreed to remove Xiaomi from a Trump administration blacklist that would have barred Americans from investing in the Chinese smartphone maker also supporting Chinese stock markets.

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