Domestic equity benchmarks ended lower for the second consecutive session as elevated crude oil prices and mixed May auto sales numbers weighed on sentiment. Investors also looked concerned over slowing economic growth.
Crude oil prices remained elevated as European Union leaders agreed to a partial and phased ban on Russian oil while the demand scenario improved as China ended its COVID-19 lockdown in Shanghai. Rupee, however, rose nearly 11 paise to end at 77.53 per dollar.
India's economy grew by 4.1 percent in the fourth quarter of 2021-22, pushing up the annual growth rate to 8.7 percent. The slowdown in India's gross domestic product (GDP) growth for the March quarter was at a 4-quarter low mainly on the account of the Russia-Ukraine crisis, high commodity prices and the third wave of Covid-19.
Most experts believe that while the current GDP numbers indicate only a gradual recovery, global macro conditions remain uncertain which is likely to impact the growth going forward.
Brokerage firm Emkay Global Financial Services believes India's GDP may slow to nearly 7 percent primarily due to the uncertainty around geopolitical tensions and sharp gains in energy prices.
"We now see India’s growth slowing to nearly 7 percent in FY23 from 7.3 percent. We still see that the next lever of secular growth is missing, implying a consistent need for policy support. Private economic agents are unlikely to lead the growth story," said Emkay Global.
Meanwhile, Goods and Services Tax (GST) collections in India fell to ₹ ₹1.40 lakh crore in May, down 16 percent from April's all-time high of ₹ ₹1.68 lakh crore.
Sensex rose some 225 points in intraday trade but failed to hold gains and ended 185 points, or 0.33 percent, at 55,381.17. Nifty50 settled at 16,522.75, down 62 points, or 0.37 percent. BSE Midcap index slipped 0.10 percent while the smallcap index rose 0.62 percent.
As many as 20 stocks ended in the red in the Sensex index while 10 stocks settled with gains.
"Continuous rise in crude oil prices due to EU’s decision to partially ban Russian oil hindered global market. The Indian economy registered a growth of 8.7 percent in FY22 but is expected to slow down in FY23 to 7.2 percent, as per the latest RBI forecast. Auto sales data, posted by major manufacturers, witnessed growth in passenger and commercial vehicle segments due to pick up in the construction sector however two-wheeler and tractor segments continued to remain under pressure," said Vinod Nair, Head of Research at Geojit Financial Services.
Shares of Mahindra & Mahindra, HDFC, Kotak Mahindra Bank, Tata Steel, HDFC Bank and ITC ended as the top gainers in the Sensex index.
On the flip side, Nestle, Tech Mahindra, Bajaj Finserv, Sun Pharma, HCL Tech and Hindustan Unilever ended up as the top laggards in the Sensex kitty of stocks.
Among the sectoral indices, BSE Power, Realty, Teck, Utilities, IT and Healthcare fell more than one percent each.
Technicals
As per Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities, Nifty trades with series support placed at 16,500.
Agrawal advised maintaining positive bias above this level with resistance seen at 16,800-17,000. "Breach of 16,500 is expected to invite some selling pressure. Overall medium term trend remains positive above 15,500. Infra and banking expected to do well while IT and metals expected to consolidate,” he said.
Rupak De, Senior Technical Analyst at LKP Securities observed Nifty remained choppy for the day as the benchmark index ended without a directional move.
"On the higher end, 50-day exponential moving average (EMA) has been acting as a crucial resistance. However, the Nifty slipped not very far from the previous close. The trend remains sideward for the near term. Support is visible at 16,400, whereas on the higher end, resistance is likely to remain intact at 16,700," said De.
Disclaimer: The views and recommendations made above are those of individual analysts and not of MintGenie.
