Benchmarks turn negative; Nifty holds 15,400

The benchmark indices reversed gains and slipped into the negative terrain in afternoon trade. A weak opening in European shares and losses in US index futures dented sentiment. The Nifty was trading near the 15400 level, reversing from the day's high of 15,628.45 hit in early afternoon trade. Auto shares were in demand while banks and oil & gas stocks declined.

At 13:30 IST, the barometer index, the S&P BSE Sensex, was down 85.31 points or 0.16% to 51,737.22. The Nifty 50 index fell 10.20 points or 0.07% to 15,403.10.

In the broader market, the S&P BSE Mid-Cap index gained 0.42% while the S&P BSE Small-Cap index rose 0.28%.

The market breadth was positive. On the BSE, 1688 shares rose and 1489 shares fell. A total of 144 shares were unchanged.

Investors digested U.S. Federal Reserve Chair Jerome Powell's comments on central bank's aim to slow down the inflation. Powell told Congress on Wednesday that the central bank is "strongly committed" to bringing down inflation after the rate hit a 40-year high in the United States. He also noted that a recession is a "possibility" a fear that has continued to weigh on investors sentiment.

Eicher Motors (up 4.16%), Hero MotoCorp (up 4.06%), Maruti Suzuki India (up 3.99%) and Asian Paints (up 2.35%) were top Nifty gainers.

Bajaj Auto rose 2.05%. A meeting of the board of directors of the company is scheduled to be held on Monday, 27 June 2022, to further deliberate on the proposal for buyback of fully paid-up equity shares of the company.

Coal India (down 2.23%), Reliance Industries (down 2.17%), Power Grid Corporation of India (down 1.95%), Grasim Industries (down 1.85%) and Hindalco Industries (down 1.44%) were major Nifty losers.

Economy:

India's current account deficit (CAD) decreased to $13.4 billion (1.5% of GDP) in Q4 2021-22 from $22.2 billion (2.6% of GDP) in Q3 2021-22. The sequential decline in CAD in Q4 2021-22 was mainly on account of a moderation in trade deficit and lower net outgo of primary income.

In the financial account, net foreign direct investment (FDI) at $13.8 billion was higher than $2.7 billion in Q4 2020-21. Net foreign portfolio investment (FPI) recorded an outflow of $15.2 billion - mainly from the equity market. Net external commercial borrowings (ECBs) to India were lower at $3.3 billion in Q4 2021-22 as compared with $6.1 billion a year ago. There was a drawdown of $16.0 billion in the foreign exchange reserves (on a BoP basis) as against an accretion of $3.4 billion in Q4 2020-21

Global Markets:

The Dow Jones index futures were down 160 points, indicating a negative opening in the US stocks today.

European shares fell across the board while most Asian stocks advanced on Thursday, amid fears over surging inflation and slowing economic growth.

Chinese President Xi Jinping chaired a top-level meeting on Wednesday that approved a plan for the healthy development of China's large payment firms and fintech sector.

US stocks fell slightly Wednesday in choppy trading as markets struggled to sustain a rebound from earlier in the day. Traders also weighed comments from Federal Reserve Chair Jerome Powell, who reiterated the central bank's stance to fight inflation.

The Federal Reserve is not trying to engineer a recession to stop inflation but is fully committed to bringing prices under control even if doing so risks an economic downturn, U.S. central bank chief Jerome Powell said on Wednesday. Powell said at a hearing before the U.S. Senate Banking Committee that a recession was "certainly a possibility" and events in the last few months around the world had made it more difficult to reduce inflation without causing one.

On Wednesday, Powell reiterated that ongoing increases in the Fed's policy rate would be appropriate, with the exact pace dependent on the economic outlook.

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