Sensex ends down 200 points, Nifty below 17,500; auto, banks weigh, oil & gas up

Indian equities ended lower for the third straight day on Wednesday, erasing gains made earlier in the session. Losses were largely led by auto, banks and financials. Oil & gas stocks rose as global crude oil prices climbed back above $100 a barrel.

Global peers fared no better. European equities fell as traders weighed the start of the corporate earnings season against the risks from surging inflation.

The Stoxx Europe 600 was down 0.4% at 10:49 a.m. in London, weighed down most by travel and leisure shares.

Back home, the benchmark Sensex fell 237.44 points to end the day at 58,338.93, while Nifty finished 54.60 points lower at 17,475.70. About 1,811 shares advanced, 1,494 declined, and 136 were unchanged.

Banks, financials and auto indices ended lower, while the mid-caps and small-caps ended with minor cuts.

Global oil demand will be slightly lower than forecast this year in the wake of strict Covid lockdowns in China, the world's biggest importer of crude, the International Energy Agency said Wednesday.

Russian oil supply, meanwhile, is expected to continue to fall in April by 1.5 million barrels per day amid its invasion of Ukraine, according to the IEA, which advises developed countries on their energy policies.

But increased output from the OPEC group of oil producing countries and stock releases from the United States and other IEA members "should prevent a sharp deficit from developing," said the agency in a monthly report.

Rich countries have agreed to tap an additional 120 million barrels of oil from emergency reserves, with half from the United States, in a bid to calm crude prices that have soared following Russia's February 24 invasion of Ukraine.

European shares retreated for a third straight session on Wednesday as anxiety about elevated inflation and its potential impact on upcoming earnings season dampened risk appetite.

The pan-European STOXX 600 index fell 0.2%, with retail and technology stocks offsetting gains in miners.

Total production of passenger vehicles, three-wheelers, two-wheelers and quadricycle in March 2022 was 1,960,398 units: SIAM

351,241 units of two-wheelers were exported in March 2022: SIAM

279,501 units of passenger vehicles were sold in March 2022

The Indian steel industry's earnings during FY23 are expected to remain healthy, despite input cost pressures leading to some moderation in earnings over the high watermark of FY22, ratings agency Icra said in a report on Wednesday.

With rising steel prices partly absorbing the increase in coal and energy costs, the ratings agency has maintained a positive outlook for the steel industry. Capacity utilisation levels will be around 80% in FY23 after a gap of eight years and buoyed by prospects of large infrastructure spending. Domestic steelmakers have announced sizeable capacity expansions accumulating to 34 million tonne per annum (mtpa) to be commissioned by FY26, the report noted.

Historically, at the lowest end of spectrum, the spread between the Repo and G-sec hovers around 250 basis points. In an interest rate hardening cycle, the spread vaults up to 350 points. 10-year Benchmark yields should thus move towards 7.50%, even with the current repo rate at 4%. We now expect a 25 basis point rate hike each in June and August, with a cumulative rate hike of 75 basis points in the cycle. Given that the spread between G-sec yields and repo rate jumps in an increasing interest rate cycle, G-sec yields could touch 7.75% by September. We believe, RBI will keep the G-sec yields capped at 7.5% through unconventional policy measures.

Oil prices edged higher on Wednesday after Moscow said that peace talks with Ukraine had hit a dead end, fuelling supply worries, while weak economic data from China and Japan kept a lid on gains.

Brent crude rose by 48 cents, or 0.5%, to $105.12 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 28 cents to $100.88. Both benchmarks had surged by more than 6% on Tuesday.

Jindal Stainless Ltd's total sales volume for FY22 stood at 1,011,292 MT, up by 23% as compared to FY21. During Q4FY22, sales volume stood at 269,168 metric tonnes (MT), registering an uptick of 9% on QoQ and 6% on YoY basis.

The sales volume was backed by JSL’s agile supply chain and a flexible product mix with a focus on value added product segments. Despite volatility and global disruptions in raw material supply and logistics, JSL effectively upped its exports. Company’s exports sales proportion doubled to 32% of sales volumes in Q4FY22 as compared to 16% Q4FY21.

ICICI Bank and GIFT SEZ have signed a Memorandum of Understanding (MoU) to promote GIFT SEZ to Indian as well as global businesses including IT / ITeS and financial services. GIFT SEZ is the country’s first International Financial Services Centre (IFSC) which is being developed as a global financial services hub.

As per the MoU, ICICI Bank and GIFT SEZ will jointly work towards attracting global investors and capital market firms to set up operations in GIFT SEZ. Further, both the organisations will promote GIFT SEZ among Indian and foreign MNCs as the preferred location for availing cross-border trade finance. GIFT SEZ and ICICI Bank aim to promote development of GIFT SEZ as fintech hub of India and will make concerted efforts to support start-ups and fintech firms

Leaf Round, an alternative investments platform has raised $300K in a pre-seed funding from micro VC firm Upsparks, Superb Capital and senior business leaders from McKinsey, Bain, Barclays and Adobe. Leaf Round will use the funds to further its product building efforts and create market awareness about the company and its offerings. It will also be double downing its efforts in hiring the right talent, building a highly scalable tech stack and focusing on content driven marketing to enhance the understanding of the product.

Leaf Round is a fintech start-up that offers asset renting as an alternative investment product and has witnessed strong traction from its early users since its launch in April 2022.

Zydus Lifesciences on Wednesday said it will supply Caffeine Citrate Oral Solution from its Gujarat-based manufacturing plant to Sagent Pharmaceuticals, Inc.

The company will be manufacturing and supplying Caffeine Citrate Oral Solution in the strengths of 60 mg per 3 ml (20 mg per ml) single-dose vial from its injectables facility at Jarod in Gujarat, Zydus Lifesciences said in a statement.

Zydus said it has received Prior Approval Supplement (PAS) approval from the US Food and Drug Administration (USFDA), which allows for a site transfer and manufacturing of the drug at Jarod.

Indian Oil Corp, the country's top refiner, has purchased a total of 7 million barrels of crude via tenders for May and June loading, traders said on Wednesday.

The refiner bought 4 million barrels of Murban crude and another 3 million of West African crude, they added.

Oil majors Total, Shell and BP sold the Murban cargoes, the sources said.

India's merchandise trade deficit in March touched $18.51 billion, data released by the government showed on Wednesday.

India's merchandise exports rose nearly 20% to $42.22 billion, while imports rose 24% to $60.74 billion.

Big Indian crypto exchanges CoinSwitch Kuber and WazirX have disabled rupee deposits for the purchase of cryptocurrency using a widely-used state-backed transfer system, spurring users to voice concern on social media.

India has spent years on a law to ban or regulate cryptocurrencies, with its central bank backing a ban over their threat to financial stability, but a recent decision to tax income from them suggests acceptance by authorities.

Oil prices surged sharply amid concerns over supply disruption following the Ukraine-Russia conflict during Q4FY22. Brent crude oil prices peaked at $139/bbl in March. Subsequently, average crude oil prices rose $20.1/bbl QoQ to $99.5/bbl. On a closing basis, crude oil prices increased $29.1/bbl QoQ to $106.6/bbl. Gas realisation was up 62% YoY as domestic APM gas prices were revised upwards from October. Similarly, ceiling price for gas from deepwater fields was also higher by 51% YoY in Q4FY22. Hence, net realisations of upstream companies are estimated to improve YoY as well as QoQ.

Top picks: IOC, BPCL, RIL

Gold prices edged higher on Wednesday as concerns of an escalation in the Russia-Ukraine conflict increased safe-haven bids for the precious metal, although a firmer U.S. dollar capped bullion's gains.

Spot gold was up 0.2% at $1,969.61 per ounce, after hitting a near one-month peak of $1,978.21 on Tuesday. U.S. gold futures were down 0.1% at $1,973.70.

PhonePe currently processes over 2.5 billion transactions a month at an Annual TPV run rate of $780 billion.

The app has seen digital transactions from over 19,000 pin codes, constituting more than 99% of the country. 

Oil prices eased on Wednesday, giving up earlier gains, after China and Japan reported weak economic data, fuelling concerns about growth and oil demand in the world's top consumers.

Brent crude futures was down 34 cents, or 0.3%, to $104.30 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell by 46 cents, or 0.5%, to $100.14 a barrel. Both contracts had surged more than 6% in the previous session.

China's export growth held up well in March, although analysts say the momentum could soon peter out with the world's second-largest economy set to slow sharply due to the Ukraine war and domestic COVID-19 lockdowns.

Imports, on the other hand, unexpectedly fell as domestic consumption weakened amid widespread lockdowns to stop the spread of record COVID cases.

Outbound shipments rose 14.7% in March from a year earlier, official data showed on Wednesday, beating analyst expectations for a 13% rise, but slowed from a 16.3% gain in January-February period.

The ₹130-crore Initial Public Offering (IPO) of Hariom Pipe Industries was subscribed 7.93 times on the final day of bidding on the back of a strong support from retail investors.

The public issue received bids for 6.74 crore shares as against the 85 lakh on offer, translating into a subscription of 7.93 times.

The IPO price band was set at ₹144- ₹153 a share.

Oil prices climbed on Wednesday on worries that sliding output in sanctions-hit Russia, the world's second-biggest oil exporter, will tighten supply after Moscow said peace talks to resolve its invasion of Ukraine had come to a dead end.

Brent crude futures rose 59 cents, or 0.6%, to $105.23 a barrel, while U.S. West Texas Intermediate (WTI) crude futures jumped 60 cents, or 0.6%, to $101.20 a barrel. Both contracts surged more than 6% in the previous session.

The April global fund manager survey is not as bearish as war-impacted March was, yet the picture is of little hope and a lot of despair.

To begin with, fears of faster-than-anticipated tightening by US Federal Reserve have weighed heavily on fund managers' optimism global growth. The April survey by BofA Securities showed that global growth expectations plunged to their lowest level ever with net of 71% of respondents being pessimistic on outlook for global growth. (Read here)

Infosys Ltd, India’s second-largest IT exporter by revenue, will announce its fourth-quarter earnings on Wednesday, a day after its larger peer Tata Consultancy Services (TCS) Ltd released its result. 

Infosys's revenue growth guidance for FY23 will be a key monitorable even as analysts expect some moderation in growth in Q4. (Read here)

India’s industrial activity mildly recovered to a four-month high in February, even as lingering geo-political risks and cost pressures dash sharp recovery prospects in the near term.

The mild revival in February could largely be attributed to the withdrawal of the Omicron wave that peaked in January.

Index of industrial production (IIP) growth edged up to 1.7% in February from 1.46% in January on a year-on-year basis, data released by the National Statistical Office showed on Tuesday.

India’s retail inflation raced to a 17-month high in March, led by a sharper-than-expected spike in food and manufactured goods prices, official data released on Tuesday showed.

Inflation based on the Consumer Price Index (CPI) quickened to 6.95% in March from 6.07% in the previous month, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI). Since January, retail inflation has stayed above 6%, the upper end of the Reserve Bank of India’s inflation target band. (Read here)

The Telecom Regulatory Authority of India (Trai) should cut base prices for 5G airwaves by at least 90% to bring them in line with global peers and revise its recommendations as they run contrary to the relief provided by the government through the reforms in 2021, the telecom industry said. Sector analysts concurred and highlighted that telcos would have to pay more to buy airwaves at base prices for 30 years. (Read here)

Shares of Infosys, Tata Steel, Union Bank of India, TVS Motor, among others, will be in focus today.

Infosys, Den Networks, and Lesha Industries are scheduled to announce their fiscal fourth quarter earnings on 13 April

Looking at recent developments, 17500 is expected to act as the immediate support zone, followed by the unfilled gap of 17350 odd zones. On the contrary, 17650 could be seen as immediate resistance, followed by the sturdy wall of the 17900-18000. The momentum is likely to be seen only when the major hurdle of the 18000 mark is crossed decisively. Till then, traders are advised to remain cautious and have a stock-centric approach to trading opportunities.

Nifty futures on the Singapore Exchange traded 9.50 points, or 0.05%, higher at 17,574.50.

On Tuesday, Sensex fell 388 points to close at 58,576.37, led by losses in index-majors Tata Steel, Wipro and Reliance Industries. The Nifty finished the day 144.65 points lower at 17,530.30.

Asian stocks were mixed Wednesday as investors weigh economic risks from inflation amid a jump in crude oil back to the $100 a barrel level.

Japan shares gained but Hong Kong and China fell. Signals from equity futures were muddy: S&P 500 and Nasdaq 100 contracts rose but Europe’s dipped.

The U.S. session Tuesday was shaped by inflation data, which came in at 8.5% for the headline number -- the highest in four decades -- but was better-than-expected at the core level, which excludes volatile food and energy prices. The S&P 500 fell 0.3% after having been up 1.3% earlier in the day. The Dow Jones Industrial Average and the Nasdaq composite each fell 0.3% after shedding early gains.

On the geopolitical front, Putin said peace talks with Ukraine are stalled and vowed to continue his “military operation” there even as he called the conflict “a tragedy.” Ukrainian President Volodymyr Zelenskiy again called for further European Union sanctions on Russia to include oil as well as all banks.