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Stock market indices plunge on weak global cues: Sensex down over 400 points, Nifty below 17,600

FPJ Web Desk | Updated on: Tuesday, April 12, 2022, 09:25 AM IST

Among major losers on the Nifty at the opening bell were Infosys, Kotak Mahindra Bank, HDFC Bank, SBI Life Insurance and HDFC.
/Representative image | ANI Photo
Among major losers on the Nifty at the opening bell were Infosys, Kotak Mahindra Bank, HDFC Bank, SBI Life Insurance and HDFC. /Representative image | ANI Photo
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The benchmark indices opened in the red on April 12. At 09:16 AM, the Sensex was down 419.18 points or 0.71 percent at 58545.39. The Nifty was down 123.00 points or 0.70 percent at 17,552. About 1162 shares have advanced, 1031 shares declined, and 109 shares are unchanged.

Among major losers on the Nifty were Hindalco, Grasim, Tech Mahindra, Wipro and Tata Motors while Cipla, Dr Reddy's Labs, ONGC, NTPC and Sun Pharma were among major gainers.

Asian stocks down

Stocks in Asia dipped on Tuesday and bonds extended a selloff -- leaving the 10-year Treasury yield at the highest since 2018 -- as economic threats from high inflation, tightening monetary policy and China’s Covid lockdowns ripple across markets.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.3 percent, after U.S. stocks ended the previous session with mild losses. Australian shares were down 0.65 percent, while Japan's Nikkei stock index slid 1.5 percent.

Early in the Asian session, the yield on benchmark 10-year Treasury notes rose to 2.8107 percent compared with its US close of 2.782 percent on Monday. The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 2.5242 percent compared with a US close of 2.508 percent.

US stocks decline

Dow industrials and the S&P 500 index book their biggest one-day declines since March on Monday, with energy, tech and other growth names bearing the brunt, as Treasury yields soared and investors braced for the next inflation reading and the kickoff of earnings season.

The yield on the 10-year US Treasury rose 6.6 basis points to 2.78 percent, its highest level since January 18, 2019. Rising bond yields are acting as a headwind for stocks, particularly tech and other growth stocks in which valuations are based on expected profit and cash flow far into the future. Higher yields on risk-free Treasurys mean those future flows are less valuable in present terms.

The next major test for markets looms later Tuesday, when the US is expected to unveil an inflation print for March of more than 8 percent. While that could mark the peak, there are fears that price pressures will remain elevated. The Labor Department’s previous report — which showed prices rising at a dramatic rate in February — failed to include the majority of the jump in oil and gas costs caused by the Kremlin’s unprovoked invasion.

Oil futures retreat

Oil futures retreated, with West Texas Intermediate crude for May delivery down $3.97, or 4%, to settle at $94.29.

TCS revenues up for seventh straight quarter

Tata Consultancy Services Ltd.’s revenue rose for the seventh straight quarter on order wins as clients continued to spend on digital services. Revenue of India’s largest software services provider rose 3.5 percent t over the preceding quarter to Rs 50,591 crore in the three months ended March. Net profit rose 1.6 percent to Rs 9,926 crore, compared with the Rs 10,067-crore forecast. Attrition inched up to 17.4 percent from 15.3 percent t as of December.

Crude up

Oil futures rose early on Tuesday, reversing sharp losses from the prior day, as the market weighed the potential for more sanctions on Russia`s energy sector and OPEC warned it would be impossible to increase output enough to offset lost supply.

On Monday, oil prices dropped by $4 a barrel, with Brent crude tumbling below $100 on plans to release record volumes of crude oil from strategic stocks and on continuing coronavirus lockdowns in China. WTI crude settled at $94.29 per barrel and Brent settled at $99.27 per barrel. Domestic markets were also settled on a weaker note at Rs7,176 per barrel, down by 2.76 percent.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "We expect crude oil prices may show some recovery from yesterday's fall in today’s session but gains will cap by strong dollar and the US bond yields. Crude oil is having support at $93.20-$91.50 and resistance is at $98.20–100.50, In INR terms crude oil has support at Rs 7,040-6,920; while resistance is at Rs7,380–7,550.

Bullion outlook

Gold and silver prices are posting moderate gains in midday on Monday, but prices have backed well down from their early-session highs on some profit taking by the shorter-term futures traders. Gold and Silver prices rose amid rising bond yields and a sell off in the crude oil market. Gold prices hit a four-week high early on today. Still, the metals are seeing some safe-haven demand on worries about inflation becoming even more problematic in the coming months.

The Russia-Ukraine war is in its seventh week amid no signs of any ceasefire. The Covid pandemic continues to surge in China, which has once again clouded the growth outlook for the world’s second-largest economy and inflation worries all are supporting gold silver prices.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said, Today, all eyes will be on the U.S. consumer price index report for March, which is expected to come in hot at up 8.4 percent year-on-year.

Gold has support at $1938-1922, while resistance at $1965-1980. Silver has support at $24.72- 24.55, while resistance is at $25.25-25.48. In INR terms gold has support at Rs51,880–51,650, while resistance is at Rs52,440–52,610. Silver has support at Rs 67570- 67,210 while resistance is at Rs 68,690–69070.

Currency outlook

USDINR 27April futures contract unable to sustain above 76.0600 and slipped again. On the weekly technical chart, a pair is trading above its resistance level of 75.8000. As per the weekly technical chart, we observed that a pair is sustaining above 75.8000 levels and technical indicators are showing positive momentum in the pair. Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "Looking at the technical set-up, if a pair cross and sustain above 76.0600; could show further strength towards 76.3500-76.5500 in the upcoming sessions. We suggest for closely watching the level of 76.0600 in today’s session for taking any positions in the pair."

Quarterly results today

The following companies will release quarterly results today: Anand Rathi Wealth, GM Breweries, Hathway Cable & Datacom, Tinplate Company of India, Evexia Lifecare, and Gayatri Bioorganics.

Stocks under F&O ban

Delta Corp and RBL Bank are under the F&O ban for April 12.

(With inputs from Reuters)

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Published on: Tuesday, April 12, 2022, 09:22 AM IST