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Indian equity benchmarks pared all of their intraday gains to end lower on Friday due to fag-end selling in heavyweights Axis Bank, Power Grid Corporation and Wipro. Key gauges made optimistic start and stayed in green for most part of the day, as traders found some support with the third quarterly employment survey (QES) by the labour ministry showed that employment in nine select non-farm sectors stood at 31.45 million in the October-December 2021 quarter, 0.39 million more than the July-September period and 0.65 million higher than April-June, 2021. Some optimism also came with stock exchange data showed foreign institutional investors turned net buyers after their continuous selling spree for the past many days, as they bought shares worth Rs 743.22 crore on Thursday. Additionally, with an aim to reduce imports of the country, the commerce ministry has made a case for encouraging domestic manufacturing of 102 items like chemicals, electronic products and insulin injection as their share in the country’s total imports are high. 

However, key indices reversed the trend and turned sharply lower in the last hour of trade, as traders got cautious with rating agency ICRA stating that capacity utilisation in India is expected to dip in the first quarter of current fiscal and is expected to gradually rise by the third quarter, and indicated that the economic recovery will be hurt by the Russia Ukraine tensions, however it will see recovery by the end of the year. Meanwhile, the Reserve Bank of India (RBI) has modified norms for banks to claim the amount of interest subvention provided to farmers under the short-term crop loan scheme through Kisan Credit Card (KCC) during 2021-22. Pending claims for the 2021-22 financial year can be submitted by June 30, 2023, and those have to be duly certified by the statutory auditors ‘as true and correct’.

On the global font, Asian markets settled higher on Friday tracking the Wall Street's tech-led gains that shrugged off the surprise contraction in the U.S. economy in the first quarter of 2022. The good showing was also attributed to optimism over likely policy support from Beijing to support the economy, amidst the severe Covid curbs. European markets were trading higher even as data from European Union statistics agency Eurostat showed inflation in the eurozone hit a new record this month while growth slowed during the first quarter of the year, as the war in Ukraine takes a toll on the European region’s economy. Spurred by skyrocketing energy prices, annual inflation soared by 7.5 percent in April. 

Back home, fertilizer industry stocks were in focus with report that India’s fertiliser subsidy bill is likely to shoot up by 55 per cent to record Rs 2.5 lakh crore this fiscal as the government will provide additional funds to make up for the spike in cost from higher import price. Power stocks were in watch with report that India's peak power demand met or the highest supply in a day touched the all-time high of 204.65 GW amid ongoing heatwave sweeping through vast swathes of the country increasing demand for electricity.

Finally, the BSE Sensex fell 460.19 points or 0.80% to 57,060.87 and the CNX Nifty was down by 142.50 points or 0.83% to 17,102.55.         

The BSE Sensex touched high and low of 57,975.48 and 56,902.30, respectively. There were 8 stocks advancing against 22 stocks declining on the index.      

The broader indices ended in red; the BSE Mid cap index fell 0.81%, while Small cap index was down by 0.58%.

The top losing sectoral indices on the BSE were Oil & Gas down by 2.58%, Energy down by 2.45%, Power down by 1.92%, Utilities down by 1.74% and Capital Goods down by 1.34%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.44%, HDFC Bank up by 1.00%, Sun Pharma up by 0.94%, Tata Steel up by 0.84% and Dr. Reddy's Lab up by 0.28%. On the flip side, Axis Bank down by 6.57%, Power Grid Corporation down by 3.42%, Wipro down by 2.59%, SBI down by 2.08% and Maruti Suzuki down by 1.97% were the top losers.

Meanwhile, with an aim to reduce imports of the country, the commerce ministry has made a case for encouraging domestic manufacturing of 102 items like chemicals, electronic products and insulin injection as their share in the country’s total imports are high. According to an analysis of imports by the ministry, the 102 items are in huge demand in the country and are imported because domestic supplies are not adequate.

It said ‘Based on the study results, it is suggested that items showing high growth and/or high share i.e. a total of 102 items with share of 57.66 per cent in total import may be prioritised for immediate interventions for domestic production opportunities’. It has recommended that industry associations, manufacturers and business leaders may consider exploring domestic capacity expansion in these items with a view to meet the domestic demand, which in turn will fuel economic growth and create employment opportunities.

The study was conducted to identify items which are consistently being imported, and have significant share in value of imports. The objective is to enhance their domestic production capacity and reduce import dependence. As many as 88 items such as gold, natural gas, crude palm oil, integrated circuits, parts of telephonic/telegraphic apparatus and personal computer have shown increase in imports in the short, medium and long run. India’s imports have touched $611.89 billion in 2021-22 as against $394.44 billion in 2020-21.

The CNX Nifty traded in a range of 17,377.65 and 17,053.25. There were 12 stocks advancing against 38 stocks declining on the index.       

The top gainers on Nifty were HDFC Life Insurance up by 1.79%, Tata Consumer Product up by 1.56%, Kotak Mahindra Bank up by 1.36%, Sun Pharma up by 0.98% and HDFC Bank up by 0.78%. On the flip side, Axis Bank down by 6.39%, Coal India down by 3.89%, Adani Ports &SEZ down by 3.42%, Wipro by 2.78% and ONGC down by 2.70% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 13.26 points or 0.18% to 7,522.45, France’s CAC increased 35.68 points or 0.55% to 6,543.82 and Germany’s DAX increased 105.11 points or 0.75% to 14,084.95.

Asian markets settled higher on Friday tracking strong gains on Wall Street overnight, despite surprise contraction in the US economy. Data showed that the American economy contracting at an annualized 1.4% on quarter in the first quarter of 2022 against market expectations of 1.1% growth. Further, crude prices remained choppy as traders grappled with the supply issues stemming from the Ukraine war as well as the demand impact of lockdowns in China. Chinese shares gained after authorities in China vowed to step up policy support to stabilize the economy hit by domestic Covid-19 outbreaks and rising geopolitical risks. Meanwhile, Japanese market was closed for Showa Day holiday. Jakarta Stock Exchange was closed on account of Eid al-Fitr.

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