Benchmark equity indices Sensex and Nifty on Monday failed to hold on to early gains and ended marginally lower, while the Indian rupee rebounded over 15 paise from its life-time low hit in the previous session as the government and the RBI came out with measures to rein in inflation.
Global crude oil prices again moved northwards and the gold prices advanced on Monday after witnessing some moderation in the previous week.
In the domestic equity market, the BSE benchmark Sensex settled 37.78 points or 0.07 per cent lower at 54,288.61. During the session, it hit a high of 54,931.30 and a low of 54,191.55. The broader NSE Nifty declined 51.45 points or 0.32 per cent to end at 16,214.70.
On the Sensex chart, Tata Steel was the top lower shedding 12.53 per cent, followed by UltraTech Cement, ITC, Power Grid, HDFC, HDFC Bank, HCL Technologies and Reliance Industries. Of the Sensex constituents, 20 shares closed in the green and 10 ended in the red. M&M, Maruti, Hindustan Unilever, Larsen & Toubro, Asian Paints and Kotak Mahindra Bank were among the gainers.
Nifty midcap and Nifty smallcap fell 0.4 percent and 0.8 percent, respectively. Most sectoral indices ended in red except Nifty Auto (+1.8%) and Nifty IT (+1%). Nifty Auto performed well following cut in Petrol and Diesel prices.
The Centre is now looking at fiscal deficit at 6.9 percent for FY23 from 6.4 percent projected earlier. Nifty Metal witnessed a massive 8.1 percent fall as the government announced its decision to levy duty on steel exports.
Nifty Pharma and Nifty Reality were down 1.4 percent and 1.1 percent, respectively. Investors remain wary of the policy decision by the central bank to tackle inflation in the near-term. The prolonged Russia-Ukraine crisis and surging COVID cases in China, continue to be in focus.
“The government and RBI are making persistent efforts to moderate future inflation. Government fiscal measures like a hike in custom duty on steel and similar steps on other products in the future will help to control inflation. However, the hawkish monetary and fiscal measures adopted by RBI & Government will have a cascading effect on market & economy in the short to medium-term,” said Vinod Nair, Head of Research at Geojit Financial Services.
Foreign institutional investors remained net sellers in the capital market on Friday as they offloaded shares worth Rs 1,265.41 crore, as per stock exchange data.
Here are some of the key highlights from the financial markets:
Global shares tumble:
Asian bourses saw selloffs as investors continued to fret over inflation and the global economic outlook.MSCI’s broadest index of Asia-Pacific shares outside Japan was flat.
US equities ended lower for the week with S&P 500 posted its longest weekly losing streak since the dot-com burst, due to rising concerns over tighter monetary policy and the resilience of the economy due to inflation. For the week, the S&P 500 fell 3 percent, the Nasdaq lost 3.8 percent, while the Dow Jones declined 2.9 percent.
Indian rupee recovers on government measures:
Rupee recovered from record lows and was 15 paise higher against the US dollar at 77.55 on Monday, after the government and the Reserve Bank came out with a slew of measures to rein in inflation. The Indian unit was also supported by a weak greenback overseas.
At the interbank forex market, the domestic unit opened at 77.69 against the US dollar. It moved in a range of 77.51 to 77.69 during the session.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 1 per cent lower at 102.12.
Gold prices advance:
Gold price of highest standard (24 carat) surged by Rs 240 to Rs 51,250 per 10 grams and 22-carat gold was sold Rs 210 higher at Rs 46,940 per 10 grams, as per the rates published by the India Bullion and Jewellers Association (IBJA). Silver was quoted at Rs 61,760 per kg, down by Rs 95.
Internationally, gold prices rose over 1 percent on Monday, boosted by a slide in US dollar to its lowest in a month, while growth concerns in the economy kept bullion’s safe-haven demand intact.
Spot gold rose 0.8 percent to USD 1,860.34 per ounce. Prices hit their highest since May 9 at USD 1,865.29 earlier in the session. US gold futures gained 1 percent to USD 1,860.00.
Oil prices firm up again:
Oil prices gained on Monday with US fuel demand, tight supply and a slightly weaker US dollar sup-porting the market, as Shanghai prepares to reopen after a two-month lockdown that fueled worries about a sharp slowdown in growth.
Brent crude futures rose USD 1.12 or 1 percent to USD 113.67 a barrel, while US West Texas Intermediate (WTI) crude futures climbed 96 cents, or 0.9 percent, to USD 111.24 a barrel, adding to last week’s small gains for both contracts.
