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Indian equity benchmarks trimmed some of their losses in noon session, but continue to trade below the neutral lines with Sensex and Nifty trading below at 51400 and 15300 respectively. Traders were worried as referring to economic crisis in Sri Lanka, a Reserve Bank article said states are showing warning signs of building stress, and the 5 most indebted ones -- Punjab, Rajasthan, Bihar, Kerala and West Bengal -- need to take corrective measures by cutting down expenditure on non-merit goods. However, downfall remain capped with Economic Affairs Secretary Ajay Seth’s statement that the government does not see any adverse impact on the Indian economy post the US Federal Reserve's decision to raise interest rates by 75 basis points. On the global front, Asian markets were trading mostly lower as central bank interest rates hikes to counter soaring inflation fan fears of a recession.

The BSE Sensex is currently trading at 51342.97, down by 152.82 points or 0.30% after trading in a range of 50921.22 and 51634.15. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.83%, while Small cap index was down by 1.20%.

The only gaining sectoral indices on the BSE were Bankex up by 0.27% and Metal was up by 0.12%, while Consumer Durables down by 2.59%, IT down by 2.43%, TECK down by 2.26%, Oil & Gas down by 1.85%, Consumer Discretionary was down by 1.60% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.75%, Reliance Industries up by 1.19%, ICICI Bank up by 0.97%, Bajaj Finance up by 0.94% and ITC was up by 0.82%. On the flip side, Titan Co down by 5.75%, Wipro down by 4.46%, TCS down by 3.64%, Dr. Reddy's Lab down by 2.76% and Tech Mahindra was down by 2.47% were the top losers.

Meanwhile, RBI article on the state of the economy has said that India is better placed than many competing countries to avoid the risks of a potential stagflation amid an increasingly hostile external environment. It noted that global economic conditions continue to deteriorate as ratcheting up of commodity prices and financial market volatility have led to heightened uncertainty. It stated that stagflation is the combination of slow economic growth along with high unemployment and high inflation.

The article said with most constituents of GDP surpassing pre-pandemic levels, domestic economic activity is gaining strength and the inflation print for May has brought some relief as it recorded a decline after seven months of continuous rise. With a growth rate of 8.7 per cent in 2021-22, India's gross domestic product (GDP) surpassed its pre-pandemic (2019-20) level by 1.5 per cent and the recovery remains robust in 2022-23 so far.

It further said the recovery remained broadly on track. This demonstrates the resilience of the economy in the face of multiple shocks and the innate strength of macro fundamentals as India strives to regain a sustainable high growth trajectory. It added that the recent actions by the Reserve Bank which demonstrated its commitment to price stability while supporting growth augurs well in this milieu. However, the central bank added that the opinions expressed in the article are those of the authors and do not necessarily represent the views of the Reserve Bank of India (RBI).

The CNX Nifty is currently trading at 15292.65, down by 67.95 points or 0.44% after trading in a range of 15183.40 and 15400.40. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.01%, Coal India up by 1.64%, JSW Steel up by 1.41%, Reliance Industries up by 1.30% and Bajaj Finance was up by 1.15%. On the flip side, Titan Co down by 5.71%, Wipro down by 4.36%, TCS down by 3.38%, HDFC Life Insurance down by 2.97% and Dr. Reddy's Lab was down by 2.48% were the top losers.

Asian markets were trading mostly in red; KOSPI fell 10.48 points or 0.43% to 2,440.93, Nikkei 225 slipped 468.20 points or 1.77% to 25,963.00, Jakarta Composite lost 136.85 points or 1.94% to 6,913.48, Straits Times trembled 20.53 points or 0.66% to 3,076.90 and Taiwan Weighted was down by 197.35 points or 1.25% to 15,641.26.

On the flip side, Hang Seng increased 211.55 points or 1.01% to 21,056.98 and Shanghai Composite was up by 27.86 points or 0.85% to 3,313.24.

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