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Indian equity benchmarks failed to hold up their early gains as rally fizzled out in last leg of trade after traders opted to book profits amid worries of high inflation and prospects of more rate cuts that will slow growth going ahead. Markets made an optimistic start as sentiments remained upbeat in reaction to the US Fed meeting outcome, which came in line with the market expectations. Sentiments got a boost with the commerce ministry’s statement that India’s services exports set a new record of $254.4 billion (about Rs 19 lakh crore) in 2021-2022. It said the exports also hit an all-time monthly high of $26.9 billion in March. Adding more optimism, Reserve Bank Governor Shaktikanta Das said recent trade agreements and geopolitical conditions open up potential market opportunities for India. Traders took note of Chief Economic Adviser V Anantha Nageswaran’s statement that India’s growth is expected to be in the range of 7-8.5 per cent given the global uncertainties. Also, firm opening in Indian rupee aided the market sentiments.

Markets traded in fine fettle for most part of the day as activity in India's dominant services sector grew at its fastest pace in five months in April on strong demand, prompting firms to add jobs for the first time since November, a private survey showed, but sky-rocketing inflation remained a major concern. The S&P Global India Services Purchasing Managers' Index rose to 57.9 in April from 53.6 in March. Adding more comfort among traders, SBI chairman Dinesh Khara said that the surprise rate hike by RBI accompanied with tightening of the cash reserve ratio illustrates the flexibility with which the central bank operates, and the move will support the markets. However, sell off in last leg of trade played spoil sports for the markets and dragged them near neutral lines as traders are now focusing towards earnings and upcoming macroeconomic data. Another factor is investors are pulling out funds from secondary markets and infusing in the ongoing LIC IPO.

On the global front, European markets were trading higher after the U.S. Federal Reserve raised interest rates by 50 basis points, as widely expected, but struck a less hawkish tone than some had feared, saying inflation will ‘flatten out’ over the coming months. Asian markets settled mostly lower, even after the private sector in Hong Kong moved back into expansion territory in April, the latest survey from S&P Global showed on Thursday with a PMI score of 51.7. That's up from 42.0 in March, and it moves above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, Crisil in its latest report has said that states have done off-balance-sheet borrowings through various entities in FY22, resulting in a 1 percentage point increase in such hidden loans to 4.5 per cent of Gross State Domestic Product (GSDP). On the sectoral front, auto stocks remained in focus after automobile dealers’ body FADA’s statement that the increase in repo rate will ‘apply certain amount of brakes’ on the industry's growth, especially the two-wheeler segment which is already reeling under a severe slowdown.

Finally, the BSE Sensex rose 33.20 points or 0.06% to 55,702.23 and the CNX Nifty was up by 5.05 points or 0.03% to 16,682.65.

The BSE Sensex touched high and low of 56,566.80 and 55,613.82, respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index slipped 0.21%, while Small cap index was down by 0.32%.

The top gaining sectoral indices on the BSE were Power up by 1.94%, IT up by 1.86%, TECK up by 1.81%, Utilities up by 1.51% and Capital Goods up by 0.96%, while Realty down by 1.57%, Healthcare down by 0.56%, FMCG down by 0.51%, Energy down by 0.43%, Basic Materials down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 4.07%, Infosys up by 3.21%, HCL Tech up by 2.76%, Wipro up by 1.87% and Tata Steel up by 1.83%. On the flip side, Indusind Bank down by 4.32%, Nestle down by 2.76%, Ultratech Cement down by 2.58%, Sun Pharma down by 2.54% and Reliance Industries down by 1.95% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) V Anantha Nageswaran has said India's growth is expected to be in the range of 7-8.5 per cent given the global uncertainties. Nageswaran stated ‘the range of outcomes is fairly wide. Wider than it could ever be and that makes decision making all the more hazardous. Lots of luck is needed to get it right.’

As per the Economic Survey, India's economy is expected to grow by 8-8.5 per cent in the fiscal beginning April 1. The CEA said he had a conversation with Fitch Ratings which has projected a growth rate of 8.5 per cent for India. He added although they have a negative outlook on India with BBB minus rating, they do have a forecast of 8.5 per cent real GDP growth for 2022-23.

He mentioned ‘So, the reality may in fact somewhere between this range of 7-8.5 per cent. We will take that in the current circumstances because the uncertainty as to how long this current conflict in Europe with last and the impact it would have not only on the price of hydrocarbon fuel, but also on fertiliser prices, food prices, etc is quite difficult to guess at this point.’ He said there are spillover effects likely to come from the monetary policy tightening by central banks in the advanced countries as well.

The CNX Nifty traded in a range of 16,651.85 and 16,945.70. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 4.17%, Hero MotoCorp up by 3.82%, Infosys up by 3.23%, HCL Tech up by 2.59% and Wipro up by 1.91%. On the flip side, Indusind Bank down by 4.24%, Tata Consumer Product down by 3.35%, Britannia Industries down by 3.20%, Nestle down by 2.68% and Ultratech Cement down by 2.55% were the top losers.

European markets were trading higher, UK’s FTSE 100 surged 86.97 points or 1.16% to 7,580.42, France’s CAC soared 121.95 points or 1.91% to 6,517.63 and Germany’s DAX increased 220.20 points or 1.58% to 14,191.02.

Asian markets settled mostly lower on Thursday, despite Wall Street gains overnight after the US Federal Reserve raised interest rates by 50 basis points as widely expected. Meanwhile, trading was thin with Japanese, South Korean and Indonesia markets closed for public holidays. Hong Kong shares declined amid concerns over the impact of China's lockdowns in Shanghai. However, Chinese shares gained as mainland markets resumed trade following a three-day holiday and investors shrugged off data that showed China's services sector activity contracted at the second-steepest rate on record in April.

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