Indian Equities Snap 2-day Rally; Sensex Slips 110 Pts

Indian equities shed their early gains in Wednesday’s volatile trading session and ended in red as sectors such as realty, telecom and IT were under selling pressure. The dip in markets was witnessed even as Wall Street recorded gains in the overnight session. Although, Asian stocks struggled due to inflationary pressures and weak economic outlook. Earlier in the day, S&P cut India’s growth forecast to 7.3 per cent.

The 30-share Sensex slipped 109.94 pts or 0.20 per cent, to close at 54,208.53. Its broader peer Nifty50 slipped 19 points to settle at 16,240.30.

"The sharp rally in the previous session failed to add fizz in today's trades, as the market did not capitalise on the firm start and rather turned range-bound to end marginally lower. The rampant FII selling has been weighing on investors' minds, and worries about subdued growth going ahead due to rising interest rates is hurting the sentiment," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

On the Sensex, Hindustan Unilever stood out as the star of the day as it surged 2.02 per cent. Other top gainers include UltraTech Cement (1.98 per cent), Asian Paints (1.65 per cent), Sun Pharmaceuticals Industries (0.78 per cent) and ITC (0.72%). Power Grid Corporation of India was the top loser on the Sensex as it ended 4.55 per cent lower. Other top losers include Tech Mahindra (2.14 per cent), State Bank of India (2.01 per cent), Larsen & Toubro (1.92 per cent) and Bajaj Finserv (1.66 per cent).

Bharti Airtel also slipped 1.63 per cent even as it registered strong March quarter numbers. The results on Tuesday showed that its net profit surged 164 per cent y-o-y.

On the Nifty50, Tata Consumer Products was the star as it surged 2.73 per cent. Bloomberg on Wednesday reported that Tata Consumer Products was mulling an acquisition spree to bolster its position in India's competitive consumer goods sections and is in discussion with up to five brands.

"Nifty struggled to extend yesterday’s spectacular rebound as market sentiment dwindled amidst key negative catalysts like S&P cutting FY23 India growth forecast to 7.3 per cent on inflation, Ukraine war, Powell warning of further rate hike, odds of ‘hard landing’ for the U.S economy, and wavering Asian and European markets amidst inflation and stagflation fears. The tussle between bulls and bears is likely to intensify amidst optimism about a global recovery in the backdrop of easing Covid-19 related restrictions in China as against stagflation fears," said Prashanth Tapse, Vice President (Research), Mehta Equities.

Federal Reserve Chair Jerome Powell on Tuesday pledged the U.S. central bank would ratchet interest rates as high as needed to kill a surge in inflation.

"On daily charts, the Nifty has formed a small bearish hammer kind of candlestick formation, which indicates a range bound activity in the near future. For day traders, 16200-16150 levels would act as key support zones. Above the same, the index could move up to 16400-16450. On the flip side, below 16150, uptrends could be vulnerable and could retest the level of 16050-16000," added Chouhan.