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Indian equity benchmarks recouped losses to end flat for second straight day on Wednesday, amid a mixed trend in global markets. For most part of the day, benchmarks traded with a negative bias, as traders were concerned with report that the second Covid wave has led to a sudden spike in India’s unemployment rate - it rose to 11.9% in May from 7.97% in the previous month. The rate had last reached double digits in June last year, when it was 10.18%. According to the Centre for Monitoring Indian Economy (CMIE) data, barring April, May and June last year, the monthly unemployment had never breached the double-digit mark at least since January, 2016. Sentiments remained subdued with Moody’s Investors Service pegged India’s GDP growth at 9.3 percent in the current fiscal ending March 2022 and 7.9 percent in FY23. The re-imposition of lockdown measures along with behavioural changes on fear of contagion will curb economic activity, it said, adding that it does not expect the impact to be as severe as during the first wave. Some concerns also came amid report stating that India reported 133,228 fresh Covid-19 infections, taking the caseload to 28,306,883. With 3,205 new fatalities, the death toll is now at 335,114, Worldometer showed. India continues to be the second worst-hit nation.

However, fag-end buying in power, energy and auto stocks helped domestic benchmark indices erase most of the day's losses. Traders took some support after India’s exports grew by 67.39 per cent to $32.21 billion in May driven by healthy growth in sectors such as engineering, pharmaceuticals, petroleum products and chemicals. Exports in May last year stood at $19.24 billion and in May 2019 it was at $29.85 billion. Meanwhile, underlining the importance of the agriculture, the Minister of Agriculture and Farmers Welfare Narendra Singh Tomar has said that the dream of a self-reliant and digital India will only be realized by taking along the agriculture sector.

On the global front, Asian markets ended mostly higher on Wednesday ahead of the release of the U.S. Labor Department's closely watched monthly jobs report on Friday for further clues on the outlook for the world's biggest economy. European markets were trading higher helped by energy and consumer stocks, while strong economic data from U.S. and Europe buoyed investor sentiment. Back home, NBFCs and HFCs stocks were in focus with ICRA’s report that restrictions in movements imposed by various states are likely to impact collections of non-banking financial companies (NBFCs) and housing finance companies (HFCs), which may see NPAs rising to 4.5 - 5 per cent by March 2022. There was some reaction in aviation stocks with a private report that airlines are slashing salaries and re-negotiating vendor contracts as drastic fall in passengers has hurt revenue. Besides, steel industry’s stocks were also in watch as the Indian Stainless Steel Development Association (ISSDA) said India may lose the tag of the world's second largest stainless steel producer to Indonesia in 2021. It also said the surplus production in Indonesia is likely to be pushed into the Indian market.

Finally, the BSE Sensex fell 85.40 points or 0.16% to 51,849.48, while the CNX Nifty was up by 1.35 points or 0.01% to 15,576.20.       

The BSE Sensex touched high and low of 51,913.92 and 51,450.58, respectively and there were 12 stocks advancing against 18 stocks declining on the index.   

The broader indices ended in green; the BSE Mid cap index rose 1.75%, while Small cap index was up by 1.29%. 

The top gaining sectoral indices on the BSE were Power up by 1.80%, Energy up by 1.76%, Auto up by 1.66%, Realty up by 1.52% and Utilities up by 1.51%, while TECK down by 0.56%, IT down by 0.54%, FMCG down by 0.46%, Bankex down by 0.16% and Telecom down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.81%, Power Grid up by 1.58%, Reliance Industries up by 1.52%, Bajaj Auto up by 1.41% and Maruti Suzuki up by 1.30%. On the flip side, ITC down by 2.88%, Tech Mahindra down by 1.20%, Axis Bank down by 1.08%, Asian Paints down by 0.95% and Kotak Mahindra Bank down by 0.84% were the top losers.

Meanwhile, Moody’s Investors Service has pegged India’s Gross domestic product (GDP) growth at 9.3 percent in the current fiscal ending March 2022 (FY22) and 7.9 percent in FY23. It said ‘the reimposition of lockdown measures along with behavioural changes on fear of contagion will curb economic activity, but we do not expect the impact to be as severe as during the first wave.’

It mentioned ‘We expect a decline in economic activity in the April-June quarter, followed by a rebound, resulting in real, inflation-adjusted GDP growth of 9.3 percent in the fiscal year ending March 2022 and 7.9 percent in fiscal 2022-23.’ India’s economy contracted by 7.3 percent in fiscal 2020-21.

It said the pandemic will leave new economic scars and deepen pre-pandemic constraints. Over the longer term, it expects real GDP growth to average around 6 percent.

The CNX Nifty traded in a range of 15,597.45 and 15,459.85 and there were 27 stocks advancing against 23 stocks declining on the index.       

The top gainers on Nifty were UPL up by 2.78%, Tata Steel up by 2.60%, Hindalco Industries up by 1.86%, JSW Steel up by 1.80% and Reliance Industries up by 1.76%. On the flip side, ITC down by 2.88%, Tech Mahindra down by 1.23%, Axis Bank down by 1.02%, Asian Paints down by 0.85% and HDFC down by 0.71% were the top losers.  

European markets were trading higher; UK’s FTSE 100 increased 3.97 points or 0.06% to 7,084.43, France’s CAC rose 12.06 points or 0.19% to 6,501.46 and Germany’s DAX was up by 18.52 points or 0.12% to 15,585.88.

Asian markets ended mostly higher on Wednesday after US manufacturing data showed a stronger-than-expected pickup in activity, which signals a continued rebound in the world’s largest economy. While unfinished work piled up in the US because of shortages of raw materials and labour. Investors will be eyeing US jobs data due Friday for clues to the Fed's plans for policy in the coming weeks and months. Japanese shares rose with economic reopening hopes. However, Chinese shares ended lower as healthcare firms dropped a day after the sector was lifted by China’s recent three-child policy.

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