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Indian equity benchmarks erased gains to end Tuesday's volatile session flat dragged by power, energy and banking stocks. Tracking solid global cues, the domestic equity indices opened gap-up and stayed in green for most part of the day. Fall in fresh coronavirus cases in the country aided the sentiments in the markets. India continued to record steady decline in the number of fresh coronavirus cases with the daily toll slipping below the 200,000-mark. India's fresh Covid cases stood at 1.95 lakh. It is the lowest level of cases in the last 41 days. Some optimism also came as the commerce and industry ministry said that foreign direct investment (FDI) equity inflow into the country grew 19 per cent to $59.64 billion during 2020-21 on account of measures taken by the government on the fronts of policy reforms, investment facilitation and ease of doing business. Traders took note of report that a Reserve Bank of India (RBI) study has advocated a mix of fiscal and monetary policies to mitigate economic downturn, saying demand side channel needs to be complemented with a conducive monetary transmission mechanism from the supply side.

However, benchmarks erased all the gains to turn negative in late afternoon session after private report cut India’s FY22 GDP growth estimate by a sharp 0.80 per cent to 9.2 per cent, saying the economic impact of the second wave of infections has been deeper than initially expected. It also mentioned that the slow pace of vaccinations in the country and the rolling lockdowns across many states for the estimate. Besides, domestic ratings agency ICRA has forecasted a 2 percent Gross domestic product (GDP) growth in the fourth quarter of 2020-21 and a 7.3 percent contraction for the full fiscal year. Traders ignored report that India and Israel are implementing the ‘INDO-ISRAEL Agricultural Project Centres of Excellence” and “INDO-ISRAEL Villages of Excellence’. The work program will aim to grow existing Centres of Excellence, establish new centers, increase CoE’s value chain, bring the Centres of Excellence into the self-sufficient mode, and encourage private sector companies and collaboration. 

On the global front, Asian markets ended higher on Tuesday as dovish comments from a series of Fed officials helped quell concerns about inflation and fears of monetary tightening. Investors now keenly await inflation data due in the United States later this week for more clues about when the central bank might start tapering its bond purchases. European markets were trading higher as several markets resume trading after the Whit Monday public holiday. Back home, on the sectoral front, banking stocks were buzzing as the Reserve Bank said it will consider amalgamation of District Central Co-operative Banks (DCCBs) with State Cooperative Banks (StCBs) subject to various conditions, including that a proposal should be made by the state government concerned. Aviation stocks were in limelight in focus with ICRA’s report that the second wave of the coronavirus pandemic is likely to delay recovery in air passenger traffic with an 80-85 per cent growth year-on-year this fiscal against the earlier estimate of 130-135 per cent. There was some reaction in jewellery industry stocks as the Centre further extended the deadline for mandatory hallmarking of gold jewellery and artefacts by a fortnight till June 15 in view of the COVID-19 pandemic.

Finally, the BSE Sensex fell 14.37 points or 0.03% to 50,637.53, while the CNX Nifty was up by 10.75 points or 0.07% to 15,208.45.      

The BSE Sensex touched high and low of 50,961.35 and 50,474.34, respectively and there were 21 stocks advancing against 9 stocks declining on the index.    

The broader indices ended mixed; the BSE Mid cap index fell 0.31%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.53%, Consumer Discretionary up by 1.19%, IT up by 0.98%, TECK up by 0.88% and Metal up by 0.87%, while Power down by 0.88%, Energy down by 0.78%, Bankex down by 0.70%, Capital Goods down by 0.26%, Utilities down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 3.38%, Titan Company up by 3.22%, Bajaj Finserv up by 1.87%, ONGC up by 1.42% and TCS up by 1.04%. On the flip side, HDFC Bank down by 2.02%, Axis Bank down by 1.26%, Reliance Industries down by 1.06%, Indusind Bank down by 0.82% and HDFC down by 0.45% were the top losers.

Meanwhile, the commerce and industry ministry has said that foreign direct investment (FDI) equity inflow into the country (India) grew by 19 per cent to $59.64 billion during 2020-21 (FY21) as compared to $49.98 billion in 2019-20 on account of measures taken by the government on the fronts of policy reforms, investment facilitation and ease of doing business. Total FDI, including equity, re-invested earnings and capital, rose 10 per cent to the highest ever of $81.72 billion during 2020-21 as against $74.39 billion in 2019-20. 

In terms of top investor countries, Singapore is at the top with 29 per cent share. It was followed by the US (23 per cent) and Mauritius (9 per cent) during the last fiscal. It added that the inflows are an endorsement of India's status as a preferred investment destination among global investors.

The computer software and hardware sector attracted the highest inflows with around 44 per cent share of the total FDI equity inflows. It was followed by construction (infrastructure) activities (13 per cent) and services sector (8 per cent), respectively. Gujarat is the top recipient state during 2020-21 with 37 per cent share of the total FDI equity inflows, followed by Maharashtra (27 per cent) and Karnataka (13 per cent).

The CNX Nifty traded in a range of 15,293.85 and 15,163.40 and there were 38 stocks advancing against 11 stocks declining, while 1 stock remain unchanged on the index.    

The top gainers on Nifty were Asian Paints up by 3.51%, Titan Company up by 3.31%, JSW Steel up by 3.02%, Eicher Motors up by 2.93% and Britannia Industries up by 2.21%. On the flip side, HDFC Bank down by 1.92%, HDFC Life Insurance down by 1.37%, Axis Bank down by 1.18%, Reliance Industries down by 1.09% and Coal India down by 0.94% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 2.68 points or 0.04% to 7,054.27, France’s CAC increased 5.16 points or 0.08% to 6,413.65 and Germany’s DAX increased 114.38 points or 0.74% to 15,551.89.

Asian markets ended higher on Tuesday, tracking Wall Street gains overnight after pullback in US Treasury yields along with easing fears about inflation as well as monetary tightening. Meanwhile, investors are keenly awaiting inflation data due in the United States later this week for more clues about when the central bank might start tapering its bond purchases. Chinese shares settled higher, supported by China’s efforts to temper commodity prices that helped ease investor concerns about inflation. Moreover, Japanese shares finished higher, even after reports suggested that Japan was leaning towards extending the emergency measures beyond May 31.

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