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Indian markets ended sharply lower on Friday, snapping a two-day rally after U.S. Federal Reserve Chairman Jerome Powell toughened his stance on inflation and Shanghai extended the Covid-19 lockdown to April 26. Today, the markets are likely to get gap-down opening of new week amid weak global sentiment and concerns around steeper rate hikes by the US Fed. Traders will be concerned as India's crude oil import bill nearly doubled to $119 billion in the fiscal year that ended on March 31, as energy prices soared globally following the return of demand and war in Ukraine. According to data from the oil ministry's Petroleum Planning & Analysis Cell (PPAC), India, the world's third biggest oil consuming and importing nation, spent $119.2 billion in 2021-22 (April 2021 to March 2022), up from $62.2 billion in the previous fiscal year. There will be some cautiousness as the Centre for Monitoring of Indian Economy stated that India’s labour force fell by 38 lakhs in the month of March to the lowest level in the last eight months, comprising a decline in the count of both employed and unemployed. Labour force participation rate fell to 39.5 percent, lower than 39.9 percent in February and 39.6 percent in June last year. Also, a private report cut India's 2022-23 economic growth forecast by 70 basis points to 7 percent, citing slowing global growth due to high commodity prices, and weak local demand because of energy price hikes, inflationary pressures and a struggling labour market. However, some respite may come later in the day as Indian Finance Minister Nirmala Sitharaman said nation’s economy appeared, sound and expressed confidence that quickening inflation will be controlled. Meanwhile, the Reserve Bank said it has launched the next round of the quarterly Industrial Outlook Survey (IOS) to assesses business sentiment for the current quarter and expectations for the ensuing three-month period. There will be some buzz in ceramics and glassware products related sector stocks as the commerce ministry said exports of ceramics and glassware products touched a record $3.5 billion in 2021-22. It said the exports rose because of increase in shipments of ceramic tiles and sanitaryware products. There will be some reaction in power stocks with report that the current power crisis is mainly on account of sharp decline in electricity generation from different fuel sources and not due to non-availability of domestic coal. Besides, the Q4 earning will be crucial to watch.

The US markets ended deeply in red on Friday as surprise earnings news and increased certainty around aggressive near-term rate increases took a toll on investors. Asian markets are trading lower on Monday as concerns persist about aggressive rate hikes after the Fed's hawkish commentary last week.

Back home, Friday’s session turned-out to be a dismal day of trade for Indian equity benchmarks, where frontline gauges ended the day with a cut of over a percent, breaching their crucial 57,200 (Sensex) and 17,200 (Nifty) levels, dragged down by losses in all the sectors after US Fed chief's hawkish comments soured global sentiments. Markets started the session on negative note and stayed in red for whole day, as traders got anxious with report stated that investments in the Indian capital markets through participatory notes (P-notes) dropped to Rs 87,979 crore as of March-end, with experts believing that foreign investors will continue to adopt a cautious stance. Traders remained pessimistic as foreign institutional investors (FII) net sold Indian shares worth Rs 713.7 crore -- a tenth straight day of outflow for the Street. However, key gauges managed to cut some losses in late morning deals, taking support from the International Monetary Fund’s (IMF’s) Mission Chief for India Nada Choueiri’s statement that the successful macroeconomic management of the Covid-19 pandemic has resulted in a strong recovery of India’s economy because of which the country is in a better position to face the economic fallout of the current Ukrainian crisis. But, equity markets failed to hold recovery and widened their losses in late afternoon session, as traders were cautious, as amid concerns over minorities being targeted in India, former Reserve Bank governor Raghuram Rajan cautioned that an 'anti-minority' image for the country can lead to loss of market for Indian products and may also result in foreign governments perceiving the nation as an unreliable partner. Sentiments remained down-beat as private report stated that UBS has downgraded its GDP growth forecast for India for the current financial year from 7.7 to 7.0 percent, adding that the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) risks failing to meet its inflation mandate. According to UBS, high global commodity prices, slower global growth, hit to domestic demand from the income shock of high fuel prices and elevated inflation, and the risk of the central government diverting money from capital expenditure towards subsidies will cause the Indian economy to grow at a slower clip this year than previously expected. Finally, the BSE Sensex fell 714.53 points or 1.23% to 57,197.15 and the CNX Nifty was down by 220.65 points or 1.27% to 17,171.95.

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