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Indian benchmark indices failed to hold on to their early upsurge and simply lost track to end marginally lower on Monday, dragged by heavy losses in Metal, Basic Materials and Oil & Gas stocks. After making cautious start markets soon traded higher, as traders found some solace with the commerce and industry ministry stating that total foreign direct investment into India rose 2 per cent to the highest ever $83.57 billion in 2021-22 on account of various measures like policy reforms and ease of doing business taken by the government. Sentiments got up-beat with private report stated that India Inc seems to be optimistic about opening of new vacancies amid steady hiring trends during the current financial year as the country's economy is on a growth trajectory. It said at least 72 per cent organisations which participated in a survey believed that there will be more hiring's for new positions during this fiscal. Some support also came as retirement fund body EPFO has added 15.32 lakh subscribers in March 2022, over 19 percent more than 12.85 lakh enrolled in February this year.

Domestic sentiments remained optimistic in afternoon deals, amid a private report stating that the Union government’s move to cut excise duty on petrol and diesel by Rs 8 and Rs 6 a litre, respectively, is likely to ease the retail inflation rate by up to 25 basis points (bps) from June onwards. If the move’s indirect impact on other items, including food prices, is also considered, the average inflation rate may reduce by 40 basis points during the current fiscal year. However, key gauges erased all of their gains to end lower as traders tuned cautious with report that the outflow of funds from domestic markets has continued as Foreign Portfolio Investors (FPI) remain net sellers. So far in the month of May, FPIs have pulled out Rs 37,216 crore as headwinds such as tighter monetary policy and rising inflation force investors towards safer havens. Some concern also came as RBI data showed the country's foreign exchange reserves declined by $2.676 billion to stand at $593.279 billion in the week ended May 13, 2022.

On the global front, European markets were trading higher despite lingering concerns about inflation and its impact on global growth. Asian markets finished mixed on Monday amid lingering concerns that inflation and rising interest rates would hamper the global economic outlook. Market participants await the latest FOMC minutes and U.S. personal consumption expenditure price, a key gauge of inflation used by the Fed, this week for more clues on the pace of future rate hikes. Back home, metals stocks were in focus as the government waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices. Fertilizer industry stocks were in focus as to insulate farmers from the sharp increases in the prices, the Centre announced a doubling of fertiliser subsidy to Rs 2.15 trillion from the budgeted level for FY23.

Finally, the BSE Sensex fell 37.78 points or 0.07% to 54,288.61 and the CNX Nifty was down by 51.45 points or 0.32% to 16,214.70.  

The BSE Sensex touched high and low of 54,931.30 and 54,191.55, respectively. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.26%, while Small cap index was down by 0.64%.

The top gaining sectoral indices on the BSE were Auto up by 1.90%, Capital Goods up by 0.91%, IT up by 0.79%, Consumer Discretionary up by 0.78% and Consumer Durables up by 0.73%, while Metal down by 8.33%, Basic Materials down by 4.08%, Oil & Gas down by 1.74%, Energy down by 1.47% and PSU down by 1.18% were the top losing indices on BSE. 

The top gainers on the Sensex were Mahindra & Mahindra up by 4.14%, Maruti Suzuki up by 4.07%, Hindustan Unilever up by 2.35%, Larsen & Toubro up by 2.21% and Asian Paints up by 2.07%. On the flip side, Tata Steel down by 12.53%, Ultratech Cement down by 3.33%, ITC down by 1.93%, Power Grid Corporation down by 1.72% and HDFC down by 1.40% were the top losers.

Meanwhile, the commerce and industry ministry has said that total foreign direct investment (FDI) into India rose 2 per cent to the ‘highest ever’ $83.57 billion in 2021-22 on account of various measures like policy reforms and ease of doing business taken by the government. Total FDI comprises equity inflows, reinvested earnings and other capital. In 2020-21, the inflow stood at $81.97 billion. It was $74.39 billion in 2019-20 and $62 billion in 2018-19. It said that the foreign inflows are increasing despite challenges like a military operation in Ukraine and COVID-19 pandemic.

It added that these inflows have increased 20-fold since 2003-04 when the inflows were $4.3 billion only. It also informed that FDI equity inflow in manufacturing sectors has increased by 76 per cent in 2021-22 ($21.34 billion) compared to 2020-21 ($12.09 billion). FDI equity inflows stood at $58.77 billion in 2021-22 against $59.64 billion in 2020-21. It said that in terms of top investor countries, Singapore is at the top with a 27 per cent share, followed by the US (18 per cent) and Mauritius (16 per cent) during the last fiscal.

The ministry added these trends ‘are an endorsement of its status as a preferred investment destination amongst global investors’. Among sectors, computer software and hardware attracted maximum inflows. It was followed by the services sector and automobile industry. Karnataka is the top recipient state with a 38 per cent share of the total FDI equity inflow reported during 2021-22 followed by Maharashtra (26 per cent) and Delhi (14 per cent).

The CNX Nifty traded in a range of 16,414.70 and 16,185.75. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.12%, Maruti Suzuki up by 4.01%, Hindustan Unilever up by 2.32%, Larsen & Toubro up by 1.92% and Wipro up by 1.61%. On the flip side, JSW Steel down by 13.21%, Tata Steel down by 12.32%, Divi's Lab down by 9.59%, ONGC down by 4.20% and Hindalco down by 3.41% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 78.52 points or 1.06% to 7,468.50, France’s CAC increased 17.10 points or 0.27% to 6,302.34 and Germany’s DAX increased 114.05 points or 0.82% to 14,095.96.

Asian markets finished mixed on Monday, as the market sentiments got dampened after China imposed lockdown again in the wake of rise in covid cases in most of the cities. Additionally, lingering concerns over peaking inflationary pressure, existing supply chain chaos,  and looming aggressive interest rate hikes also pressured investments. Meanwhile, some investors side-lined on caution ahead to the impending FOMC minutes and US personal consumption expenditure price data, for more cues on Fed monetary policy measures. Meanwhile, International Labour Organization (ILO) reports uncertainty over global job market recovery to the pre-covid period, due to the extended Chinese lockdown, and persisting Ukraine war. As per reports, China accounted for 86% of the dip in working hours due to containment measures to stop the spread of COVID-19.

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