IGI Logo

Indian equity benchmarks ended lower by over half percent on Monday following the downtrend in global equities. Markets opened in the negative territory and stayed in red for whole day, as traders were concerned with a private report that foreign funds' ownership in domestic equities fell to pre-COVID lows and hit a multi-year low of 19.5 per cent in March this year in NSE500 companies valued at $619 billion. Investors were also cautious ahead of crucial macro-economic data such as industrial output and retail inflation reading to be out later this week. However, markets erased most of their initial losses in late afternoon deals, taking support from a periodic labour force survey by the National Statistical Office (NSO) showing that the unemployment rate for persons of 15 years and above in urban areas slipped to 8.7 per cent in October-December 2021 from 10.3 per cent in the year-ago quarter. Some solace also came with Finance Minister Nirmala Sitharaman’s statement that the recent interest rate hike by the Reserve Bank was not surprising for her but the timing was, asserting that the rising cost of funds will not impact the government's planned infrastructure investments. Meanwhile, a private report stated that with the e-way bills generated for inter-state trade in goods under the Goods and Services Tax (GST) regime in April turning out to be the second highest so far, the monthly GST collections may hit Rs 1.5 trillion benchmark again in May (April transactions).

On the global front, Asian markets ended mostly lower on Monday, while European markets were trading lower on fears of an economic recession later this year as a result of rising inflation, higher interest rates and the ongoing severe lockdown restrictions in China's Shanghai to contain the spread of COVID-19. China's export growth slowed to the weakest in almost two years and imports were barely changed in April, adding to concerns over the economic outlook.

Back home, power stocks were in focus as total outstanding dues of electricity distribution companies to power producers rose by 4.04 per cent year-on-year to Rs 1,21,765 crore (Rs 1.21 trillion) in May 2022. There were some reaction in insurance industry stocks with report that the government may infuse Rs 3,000-5,000 crore additional capital in the three public sector general insurance companies based on their performance and requirement during the year. Paper industry stocks were in limelight as industry body IPMA said that paper consumption in India is likely to witness 6 to 7 per cent annual growth and will reach 30 million tonnes by FY 2026-27, largely driven by emphasis on education and literacy coupled with growth in organised retail.

Finally, the BSE Sensex fell 364.91 points or 0.67% to 54,470.67 and the CNX Nifty was down by 109.40 points or 0.67% to 16,301.85.  

The BSE Sensex touched high and low of 54,795.47 and 53,918.02, respectively. There were 13 stocks advancing against 17 stocks declining on the index.               

The broader indices ended in red; the BSE Mid cap index fell 1.89%, while Small cap index was down by 1.67%.

The top gaining sectoral indices on the BSE were Telecom up by 0.45%, TECK up by 0.45% and IT up by 0.09%, while Power down by 2.47%, Utilities down by 2.46%, Energy down by 2.27%, Oil & Gas down by 2.03%, Metal down by 1.98% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.83%, HCL Technologies up by 2.44%, Infosys up by 1.73%, Maruti Suzuki up by 1.32% and Bajaj Finserv up by 1.25%. On the flip side, Reliance Industries down by 3.97%, Indusind Bank down by 2.97%, Nestle down by 2.88%, Tata Steel down by 2.48% and Tech Mahindra down by 2.33% were the top losers.

Meanwhile, a periodic labour force survey by the National Statistical Office (NSO) showed that the unemployment rate for persons of 15 years and above in urban areas slipped to 8.7 per cent in October-December 2021 from 10.3 per cent in the year-ago quarter. It said joblessness was high in October-December in 2020 mainly due to the staggering impact of the lockdown restrictions in the country, which were imposed to curb the spread of the deadly coronavirus.

According to the survey, the unemployment rate for persons of age 15 years and above in July-September 2021 was 9.8 per cent in urban areas. It also showed that the unemployment rate among females (aged 15 years and above) in urban areas also declined to 10.5 per cent in October-December 2021 from 13.1 per cent a year ago. It was 11.6 per cent in July-September 2021. Among males, the unemployment rate in urban areas also dipped to 8.3 per cent in October-December 2021 compared to 9.5 per cent a year ago. It was 9.3 per cent in July-September 2021.

It further stated that labour force participation rate in CWS (current weekly status) in urban areas for persons 15 years of age and above remained unchanged at 47.3 per cent in the October-December quarter of 2021, compared to the same period a year ago. It was 46.9 per cent in July-September 2021. Labour force refers to the part of the population which supplies or offers to supply labour for pursuing economic activities for the production of goods and services and therefore, includes both employed and unemployed persons.

The CNX Nifty traded in a range of 16,403.70 and 16,142.10. There were 18 stocks advancing against 31 stocks declining, while 1 stock remain unchanged on the index.       

The top gainers on Nifty were Power Grid Corporation up by 3.12%, HCL Technologies up by 3.11%, Infosys up by 1.96%, Bajaj Auto up by 1.94% and Divi's Lab up by 1.67%. On the flip side, Reliance Industries down by 4.30%, Nestle down by 2.85%, Hero MotoCorp down by 2.67%, Indusind Bank down by 2.65% and Tata Steel down by 2.53% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 132.14 points or 1.79% to 7,255.80, France’s CAC decreased 124.58 points or 1.99% to 6,133.78 and Germany’s DAX decreased 229.89 points or 1.68% to 13,444.40.

Asian markets ended mostly lower on Monday tracking weakness in Wall Street over the weekend. Increasing anxiety that the US Fed may further tighten monetary policy to fight high inflation also added pressure on market sentiments. Further, a tightening lockdown in Shanghai also stoked concerns about global economic growth and possible recession. Moreover, speculation that Russian President Vladimir Putin might declare war on Ukraine during his speech at Victory Day celebrations also weighed on sentiments. Chinese shares ended on a flat note after data showed China's export growth slumped in April to its lowest level in almost two years. However, Japan's services sector activity expanded for the first time in four months in April, a survey showed earlier in the day. Meanwhile, Hong Kong's stock exchange is closed today in honor of the celebration of Buddha’s birthday on May 8.

Above views are of the author and not of the website kindly read disclaimer