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Indian equity benchmarks extended their fall for the fourth straight session amid choppy trade on Wednesday, as participants waited IIP (Index of Industrial Production) and CPI (Consumer Price Inflation) data, due to be released tomorrow.  The indices started higher but soon gave up all of their respective gains, as traders turned worried as data released by the RBI showed that India's outward foreign direct investment (OFDI) nearly halved to $3.39 billion in April on an annual basis. The OFDI stood at $6.71 billion in April 2021. Some cautiousness came in with a private report that the goods and services tax (GST) council is mulling a 28 per cent tax on crypto currencies, at par with the current GST on casinos, betting and lottery. Traders also took a note of ICRA Ratings’ report that in spite of a sharp 40 per cent decline in bond issuances, states have been forced to pay more for their market borrowings as the weighted average interest rate touched a record 7.69 per cent at the latest auctions of state government securities.

Benchmarks extended losses in afternoon deals, as sentiments were fragile as foreign investors have sold Indian equities worth $1.82 billion so far this month, shedding stocks worth $374 million in the fourth straight day of net selling on May 10. Traders were also cautious after private report stated that a majority of the Indian consumers are bullish about their financial situation in the next one year, but have raised concerns over rising cost of goods and services, which is affecting their purchasing decisions. Moreover, uncertainty around managing rising living costs is driving over 80 per cent in India to save more money. However, key gauges managed to pare some losses in final minutes of trade, taking support from Union Minister Anupriya Patel stating that India was expected to conclude free trade agreements with the United Kingdom, Canada, and the European Union before this year-end.

On the global front, Asian markets ended mixed on Wednesday as some traders looked to pick up stocks at reduced levels after the recent sell-off in global markets. Investors awaited the release of U.S. consumer price inflation data later in the day for any signs that inflation is beginning to cool from a 40-year high. European markets were trading higher as virus cases fell in China and the country's securities regulator pledged action to shore up region's worst-performing stock market. Back home, tyre industry’s stocks were in watch as CRISIL report stated that the capital expenditure of tyre makers is expected to increase to around Rs 5,000 crore this fiscal on the back of improving demand, as against around Rs 3,700 crore annually in the preceding two fiscals. Power stocks were in focus with ICRA’s report that the government measures to ease power supply constraints through higher coal imports are likely to increase cost of supply for discoms by 4.5-5.0 per cent in 2022-23.

Finally, the BSE Sensex fell 276.46 points or 0.51% to 54,088.39 and the CNX Nifty was down by 72.95 points or 0.45% to 16,167.10.  

The BSE Sensex touched high and low of 54,598.55 and 53,519.30, respectively. There were 10 stocks advancing against 20 stocks declining on the index.                

The broader indices ended in red; the BSE Mid cap index fell 0.46%, while Small cap index was down by 2.23%.

The top gaining sectoral indices on the BSE were Realty up by 0.92%, Bankex up by 0.68% and Oil & Gas up by 0.07%, while Capital Goods down by 1.63%, IT down by 1.50%, Industrials down by 1.39%, Telecom down by 1.22% and TECK down by 1.07% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.92%, Indusind Bank up by 1.37%, HDFC up by 0.92%, Kotak Mahindra Bank up by 0.73% and HDFC Bank up by 0.50%. On the flip side, Larsen & Toubro down by 2.34%, Bajaj Finserv down by 2.26%, Bajaj Finance down by 2.08%, Power Grid Corporation down by 1.99% and NTPC down by 1.71% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its latest report showed that India's outward foreign direct investment (OFDI) nearly halved to $3398.92 million in April on an annual basis. The OFDI stood at $6714.89 million in April 2021.

On sequential basis too, the outward investment from India in April was lower compared to $3446.01 million in March 2022. Of the $3398.92 million OFDI, the equity component was $544.87 million and loans amounted to $764.25 million.

Indian companies issued guarantees worth $2089.80 million in April 2022, as compared to $3643.56 million in April 2021. The Reserve Bank of India further said the data is provisional and subject to change based on online reporting by banks.

The CNX Nifty traded in a range of 16,318.75 and 15,992.60. There were 22 stocks advancing against 28 stocks declining on the index.         

The top gainers on Nifty were ONGC up by 3.11%, Axis Bank up by 2.46%, Indusind Bank up by 1.66%, Cipla up by 1.28% and HDFC up by 1.17%. On the flip side, Shree Cement down by 3.30%, Bajaj Finserv down by 2.20%, Larsen & Toubro down by 2.13%, NTPC down by 1.96% and BPCL down by 1.84% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 74.04 points or 1.02% to 7,317.26, France’s CAC increased 97.59 points or 1.6% to 6,214.50 and Germany’s DAX increased 119.34 points or 0.88% to 13,654.08.

Asian markets ended mixed on Wednesday, tracking mixed cues overnight from Wall Street ahead of US inflation data due later in the day. Reports showing that China's consumer inflation rose more-than-expected in April, while factory inflation eased to the slowest in a year. Chinese and Hong Kong shares gained after China's securities watchdog pledged a variety of measures to shore up confidence in the region's worst-performing stock market, while signs of declining virus cases on the mainland also boosted sentiments.

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