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Indian equity benchmarks took a breather after two days of solid rally and ended Wednesday’s volatile session with over half percent losses amid selling in the domestic equity market. Weak global cues also dented the sentiments on Dalal Street. Markets made negative start but soon wiped-out losses to trade in green, as traders took some support with report that Union Finance Ministry, on the recommendation of the Panchayati Raj Ministry, released Rs 8,923.8 crore to 25 states for providing grant to rural local bodies. The spread of COVID-19 pandemic in different parts of the country has recently assumed serious proportions. The vulnerabilities of the rural communities need to be especially addressed.

But, buying proved short-lived as key gauges once again entered into red terrain in morning deals, as traders were cautious, as smaller non-banking finance companies (NBFCs) have written to the Reserve Bank requesting liquidity support as they continue to face challenges in raising funds. In a letter addressed to RBI Governor Shaktikanta Das, Finance Industry Development Council (FIDC), a representative body of NBFCs, said the announcements made on May 5 by the central bank have addressed liquidity needs of small microfinance institutions MFIs, but NBFCs have missed out. Local equity markets have extended their losses in late afternoon deals and hovered near the lowest point of the day, even as UN data stated that India, China and South Africa have fared ‘relatively better’ than other major economies in imports and exports in the first quarter of this year as global trade recovery from the COVID-19 crisis hit a record high during in the same period.

On the global front, Asian markets settled lower on Wednesday as inflation worries persisted and investors awaited the Fed meeting minutes to figure out officials' view on the economic recovery and inflation. European markets were trading lower as Eurostat reported that Euro zone inflation accelerated as expected in April because of a sharp rise in the costs of energy and services. Consumer prices in the 19 countries sharing the euro rose 0.6 percent sequentially and 1.6 percent from a year earlier, up from the 1.3 percent annual increase in March.

Back home, on the sectoral front, aviation stocks were in limelight reacting to the Indian aviation regulator DGCA’s data showing that around 57.25 lakh domestic passengers travelled by air in April, which is 26.8 per cent lower than 78.22 lakh who travelled in March. There was some buzz in tractor industry stocks as rating agency Crisil said growth in the domestic tractor sales volume is likely to be at 3-5 per cent this fiscal, given the strong second wave of COVID-19 and rising cases in the hinterland. Cement industry’s stocks too were in watch with Fitch Ratings’ statement that the recent price increases by Indian cement companies will counter higher energy costs while the impact on profitability from a resurgence of coronavirus is likely to be limited.

Finally, the BSE Sensex lost 290.69 points or 0.58% to 49,902.64, while the CNX Nifty was down by 77.95 points or 0.52% to 15,030.15. 

The BSE Sensex touched high and low of 50,279.01 and 49,831.40, respectively and there were 9 stocks advancing against 21 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.53%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Realty up by 2.22%, Power up by 1.23%, Healthcare up by 1.22%, Utilities up by 0.60% and Energy up by 0.38%, while Telecom down by 1.16%, Metal down by 0.84%, Auto down by 0.76%, Bankex down by 0.71% and Basic Materials down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.82%, Nestle up by 1.45%, Tech Mahindra up by 0.97%, Bajaj Auto up by 0.79% and Axis Bank up by 0.67%. On the flip side, Bajaj Finserv down by 1.68%, HDFC down by 1.68%, Mahindra & Mahindra down by 1.66%, Bharti Airtel down by 1.49% and Ultratech Cement down by 1.41% were the top losers.

Meanwhile, the Union Finance Ministry, on the recommendation of the Panchayati Raj Ministry, has released Rs 8,923.8 crore to 25 states for providing grant to rural local bodies. The spread of COVID-19 pandemic in different parts of the country has recently assumed serious proportions. The vulnerabilities of the rural communities need to be especially addressed. The amount released is the first installment of the Basic (Untied) Grants and may be utilized among other things for various prevention and mitigation measures needed to combat the Covid pandemic. The Ministry has also issued advisory for the guidance of Panchayats as regards the action for combating the COVID-19 pandemic, which inter alia includes the following areas.

Intensive communication campaign for the awareness of rural communities on the nature of the COVID-19 infection, and preventive and mitigative measures, in accordance with the advice of Ministry of Health and Family Welfare (MoHFW), doctors and medical institutions etc, while especially taking care to dispel false notions and beliefs. The background material and creatives for this awareness campaign may be drawn suitably from the digital repository of health ministry. Providing suitable facilities with necessary protective equipment like finger oxy-meters, N-95 masks, infrared thermal scanning instruments, sanitisers etc.

Display of the information on availability of testing/vaccination centers, doctors, hospital beds etc on real-time basis to facilitate effective utilization of available infrastructure by the rural citizens. To leverage the available IT infrastructure in the Panchayat offices, Schools, Common Service Centers etc. may be leveraged for tracking and information display. To activate the Panchayats to provide the necessary institutional village level support catering to their respective locations. Wherever possible, they may improvise households as home quarantine locations, where maximum of the asymptomatic Covid positive cases can be managed. Additionally they may also set up specific quarantine/isolation centers for the needy and returning migrant labourers. In consultation with the Health Dept, the Panchayats may be designated to facilitate vaccination drives to ensure maximum coverage of eligible population.

The CNX Nifty traded in a range of 15,133.40 and 15,008.85 and there were 22 stocks advancing against 27 stocks declining, while 1 stock remains unchanged on the index.

The top gainers on Nifty were Coal India up by 3.45%, Cipla up by 2.05%, Sun Pharma up by 1.90%, UPL up by 1.64% and Nestle up by 1.46%. On the flip side, Tata Motors down by 5.52%, Bajaj Finserv down by 1.77%, Mahindra & Mahindra down by 1.76%, HDFC down by 1.67% and JSW Steel down by 1.62% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 76.28 points or 1.08% to 6,957.96, France’s CAC fell 65.59 points or 1.03% to 6,288.08 and Germany’s DAX was down by 201.30 points or 1.31% to 15,185.28.

Asian markets settled lower on Wednesday tracking Wall Street's weak finish overnight amid renewed inflation fears, while investors also awaited the Federal Reserve’s meeting minutes to figure out officials' view on US economy. Japanese shares declined as a top medical organization threw its weight behind calls to cancel this year’s Tokyo Olympics and saying that hospitals in Japan are already overwhelmed as the country battles a surge in Covid-19 infections less than three months from the start of the Games. Moreover, Chinese shares finished lower amid increased Sino-US tensions after a US warship again sailed through the sensitive waterway that separates Taiwan from China. Meanwhile, markets in South Korea and Hong Kong were closed for Buddha's birthday and National Day, respectively.

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