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Indian equity benchmarks gave up initial gains and edged lower on Wednesday as investors kept an eye on rising crude oil prices. Brent crude futures traded near the $117 a barrel mark on global supply concerns amid the ongoing Russia-Ukraine conflict. The benchmarks staged a gap up opening, as traders took encouragement with a periodic labour force survey by the National Statistical Office (NSO) showed that unemployment rate for persons of age 15 years and above in urban areas dipped to 9.8 per cent in July-September 2021 from 13.2 per cent in the same quarter of the previous year. Some optimism also came as the Organization for Economic Cooperation and Development (OECD) retained the outlook for India’s real gross domestic product (GDP) at 5.5% in FY24. Traders took a note of report that NITI Aayog sought to dispel the fear that India is favouring a closed economy by promoting Atmanirbhar mission, and said the country can achieve better results for its people by having a deeper engagement with the global supply and value chain.

However, profit booking at higher levels led to benchmarks erase intraday gains a day ahead of weekly expiry of index futures and option contracts. Traders also got anxious with IMF Managing Director Kristalina Georgieva said that new International Monetary Fund forecasts due in April will show that the war in Ukraine will slow global economic growth, but will not cause a global recession. Meanwhile, the Standing Committee on Food, Consumer Affairs and Public Distribution has appreciated the government's efforts to cut the Bill on food subsidy during 2021-22 in comparison to 2020-21. However, the Committee feels that food subsidy is still very high and there is still scope to reduce it further. It noted that allocation of funds - in respect of food subsidy during 2021-22 is Rs 2,90,573.11 crore but actual expenditure as on February 11, 2022, is Rs 2,20,445.61 crore only i.e. 76 per cent of allocation.

On the global front, Asian markets settled mostly higher on Wednesday following the broadly positive cues from Wall Street, extending mostly solid momentum with support from the technology stocks, largely shrugging off US Federal Reserve Chair Jerome Powell's comments a day earlier suggesting the central bank may raise interest rates more aggressively. European markets were trading mostly in red, as the escalation in the Russia-Ukraine conflict and stringent sanctions imposed on Russia by the Western countries rendered the mood cautious. Back home, oil & gas sector stocks were in focus as the Ministry of Petroleum and Natural Gas released its monthly production report for February 2022 showed that crude oil production failed to meet target while also lower in terms of year-on-year (YoY) data for the period; while natural gas production was higher in YoY terms, but still lower than the monthly target. Stocks related to power industry too were in watch as Power Minister RK Singh stated that total outstanding dues owed by electricity distribution companies (discoms) to power producers stood at Rs 1 lakh crore at the end of February 2022. The outstanding amount of the discoms becomes overdue after 45 days of raising the bill for supply of power by gencos. 

Finally, the BSE Sensex fell 304.48 points or 0.53% to 57,684.82 and the CNX Nifty was down by 69.85 points or 0.40% to 17,245.65.     

The BSE Sensex touched high and low of 58,416.56 and 57,568.59, respectively. There were 13 stocks advancing against 17 stocks declining on the index. 

The broader indices were trading mixed; the BSE Mid cap index rose 0.39%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were Metal up by 1.53%, Utilities up by 1.36%, Power up by 1.30%, Basic Materials up by 0.54%, Oil & Gas up by 0.35% while, Bankex down by 0.81%, Finance down by 0.74%, Auto down by 0.72%, Capital Goods down by 0.59% and Industrials down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 2.31%, Tata Steel up by 2.15%, ITC up by 0.86%, Power Grid Corporation up by 0.65% and NTPC up by 0.45%. On the flip side, HDFC down by 2.36%, Kotak Mahindra Bank down by 2.25%, Bharti Airtel down by 1.97%, Sun Pharma down by 1.65% and Maruti Suzuki down by 1.54% were the top losers.

Meanwhile, NITI Aayog Vice-Chairman Rajiv Kumar has sought to dispel the fear that India is favouring a closed economy by promoting ‘Atmanirbhar’ mission, and said the country can achieve better results for its people by having a deeper engagement with the global supply and value chain. Kumar said India remains very deeply committed to greater integration with global flows and the regional network. He said ‘We would want the Japanese companies to come and make India an export hub to the rest of the world under the PLI scheme. I think the environment is there to develop it because on the Indian side we have done, and we will continue to do whatever is required to attract Japanese investment into India.’

Kumar said ‘I do want to take this opportunity to dispel any fear at all that the production linked incentive scheme for the Atmanirbhar, the self-reliant India- a call given by the prime minister as a response to the Covid situation and for our economy to come out of it- I want to dispel the fear that it is in any sense leading us towards a closed economy’. He said there is no question at all for India to move back from its engagement with the global economy, trade, services, financial and technological aspects among others.

He added ‘We are convinced that it is only by a deeper integration for India that we will achieve better results for our people as we go forward.’ Talking about the transition towards green mobility by promoting clean energy, he said Japan has already taken a lead in this field and it can help the Indian companies by inviting them to supply green ammonia- a key input in making hydrogen fuel.

The CNX Nifty traded in a range of 17,442.40 and 17,199.60. There were 21 stocks advancing against 29 stocks declining on the index. 

The top gainers on Nifty were Divi's Lab up by 2.51%, Hindalco up by 2.50%, Tata Steel up by 2.04%, Dr. Reddy's Lab up by 1.98% and UPL up by 1.77%. On the flip side, Kotak Mahindra Bank down by 2.61%, HDFC down by 2.42%, Britannia Industries down by 2.07%, Bharti Airtel down by 1.87% and Sun Pharma down by 1.77% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 14.34 points or 0.22% to 6,645.07 and Germany’s DAX decreased 38.04 points or 0.26% to 14,435.16, while UK’s FTSE 100 increased 15.55 points or 0.21% to 7,492.27.

Asian markets settled mostly higher on Wednesday, despite concerns about the Ukraine war and inflation. Market sentiments improved by tracking strong rebound on Wall Street overnight with optimism that the Fed’s plan to hike interest rates will help bring inflation under control. Meanwhile, investors are awaiting Fed Chair Jerome Powell's speech, a NATO meeting and the upcoming EU Summit Thursday in Europe. Japanese shares ended higher as a cheaper yen helped lift export-reliant sectors such as electronics and automobiles.

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