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Markets extend losses for 3rd straight day amid global selloff
Apr-16-2024

Indian equity benchmarks continued their decline for the third consecutive session on Tuesday, tracking losses in Asian markets due to escalation in the Israel-Iran conflict. Heavy selling in IT and TECK stocks also dented investors' sentiment. Key gauges made a negative start and remained under pressure for whole day as traders were anxious with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 3,268 crore on April 15, 2024. Traders were concerned with report that India’s merchandise exports dipped marginally in March to $41.69 billion, and by 3.11 per cent during the last fiscal year to $437.06 billion mainly due to continued geopolitical turmoil, and depressed global trade. Imports, too, declined in March as well during the entire 2023-24. Traders took a note of former Reserve Bank Governor D Subbarao’s statement that even after becoming the third largest economy in the world by 2029 as envisaged by Prime Minister Narendra Modi, India may still be a poor country and therefore there is no reason for celebration. 

Key gauges extended losses in afternoon session amid a private report stating that interest rate cuts in India are off the table in fiscal year 2024/25 given the change in the Federal Reserve's policy path and strong growth in the South Asian nation. Adding some worries, the Indian government has announced an increase in windfall tax on petroleum crude from Rs 6,800 to Rs 9,600 per metric ton. This change will come into effect on April 16, as part of the government's fortnightly revision of the tax. But, diesel and aviation turbine fuel will remain unaffected and will continue to have a zero windfall tax rate. However, markets managed to trim some losses in final hour of trade, as traders took some support with India Meteorological Department’s (IMD) statement that India is likely to experience above-normal cumulative rainfall in the 2024 monsoon season with La Nina conditions likely to set in by August-September. IMD predicts 2024 southwest monsoon season (June to September) rainfall over the country as a whole to be above normal (>104% of the Long Period Average (LPA)). Seasonal rainfall is likely to be 106% of LPA with a model error of ± 5%. LPA of monsoon rainfall (1971-2020) is 87 cm.

On the global front, European markets were trading lower amid signs of escalating tensions in the Middle East and uncertainty over the Fed's rate trajectory. Asian markets settled down on Tuesday on growing bets that the Federal Reserve will delay interest rate cuts. Ongoing concerns about geopolitical tensions in the Middle East and signs of feeble demand in China also weighed on markets. 

Finally, the BSE Sensex fell 456.10 points or 0.62% to 72,943.68 and the CNX Nifty was down by 124.60 points or 0.56% points to 22,147.90.   

The BSE Sensex touched high and low of 73,135.43 and 72,685.03 respectively. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.70%, Consumer Durables up by 0.62%, Energy up by 0.54%, FMCG up by 0.43% and Power up by 0.37%, while IT down by 2.32%, TECK down by 2.09%, Bankex down by 0.50%, Telecom down by 0.40% and Metal down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.26%, Hindustan Unilever up by 1.20%, HDFC Bank up by 0.97%, Maruti Suzuki up by 0.62% and Power Grid Corporation up by 0.07%. On the flip side, Infosys down by 3.65%, Indusind Bank down by 3.12%, Wipro down by 2.32%, Bajaj Finserv down by 2.31% and HCL Technologies down by 1.94% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest data on ‘Overseas Direct Investment’ has showed that India’s outward foreign direct investment (OFDI) commitments rose 48.68% to $3919.84 million in March 2024 as against $2636.42 million in March 2023. Sequentially, OFDI commitments were also up from $3,671.94 million in February 2024.

According to the report, the equity commitments surged 168.43% to $2035.30 million in March 2024 from $758.22 million a year ago. It was also higher than $616.46 million recorded in February 2024. Loan commitments increased 101.81% to $1045.36 million in March 2024 from $517.98 million in March 2023. It was also higher than $ 254.2481 million in February 2024.

The report further noted that guarantees for overseas units however declined 38.31% to $839.1683 million in March 2024 as compared to $1360.22 million in March 2023. They were also lower compared to $2,801.24 million in February 2024.

The CNX Nifty traded in a range of 22,213.75 and 22,079.45. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.05%, Hindustan Unilever up by 1.65%, ONGC up by 1.55%, Titan Company up by 1.40% and Divi's Lab up by 1.30%. On the flip side, Infosys down by 3.61%, LTIMindtree down by 3.05%, Indusind Bank down by 2.97%, Bajaj Finserv down by 2.32% and Wipro down by 2.25% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 121.42 points or 1.55% to 7,844.11, France’s CAC fell 106.49 points or 1.34% to 7,938.62 and Germany’s DAX lost 258.85 points or 1.46% to 17,767.73.

Asian markets settled down on Tuesday tracking Wall Street’s overnight fall after robust US retail sales data for March fuelled concerns about the outlook for US interest rates. Meanwhile, San Francisco Federal Reserve Bank President Mary Daly said there was no urgency for the Fed to cut interest rates. Moreover, rising oil prices and persisting Middle East tensions have also added more pressure on market sentiments. Investors were also awaiting Israel's response to Iran's first-ever direct attack on the country. Seoul shares declined amid heavy selling pressure with speculation that the Bank of Korea will not rush to lower borrowing costs. Chinese shares fell even after data showed China's GDP grew 5.3% in January-March from the year earlier, beating expectations for a 4.6% increase. Moreover, Japanese shares dropped after a jump in US Treasury yields.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,007.07

-50.31

-1.67

Hang Seng

16,248.97

-351.49

-2.16

Jakarta Composite

7,164.81

-122.07

-1.70

KLSE Composite

1,535.00

-7.53

-0.49

Nikkei 225

38,471.20

-761.60

-1.98

Straits Times

3,144.76

-38.85

-1.24

KOSPI Composite

2,609.63

-60.80

-2.33

Taiwan Weighted

19,901.96

-547.81

-2.75
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