Sensex drops 525 pts; Nifty holds 17,800 level

The benchmark indices were trading with modest losses during afternoon trade amid negative global cues. IT, financial services and bank scrips dragged. The Nifty index managed to hover a tad above 17,800 level.

At 13:30 IST, the barometer index, S&P BSE Sensex fell 524.91 points or 0.87% at 59,651.59. The Nifty 50 index shed 145.65 points or 0.81% at 17,811.75.

The broader market was trading higher. The S&P BSE Mid-Cap index rose 0.15% and the S&P BSE Small-Cap index gained 0.32%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, shares 2,127 rose and 1,203 shares fell. A total of 116 shares were unchanged.

The RBI Governor-headed rate setting panel -- Monetary Policy Committee (MPC) -- started its first meeting of the 2022-23 fiscal today, 6 April. The outcome will be announced on 8 April. In the previous meeting, MPC left the key policy rates unchanged.

Economy:

The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 53.6 in March 2022 from 51.8 in February 2022.

The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.

The latest number pointed to the strongest rate of expansion since last December. The upturn stemmed from new business wins, strengthening demand conditions and greater consumer footfall due to the relaxation of COVID-19 restrictions.

Meanwhile, the S&P Global India Composite PMI Output Index stood at 54.3 in March, up from 53.5 in February. The number highlighted the strongest rate of expansion in 2022 so far.

Manufacturers signalled a sharper increase than service providers, but growth slowed among the former and accelerated at the latter.

Gainers & Losers:

Coal India (up 3.65%), NTPC (up 3.52%), Tata Steel (up 1.68%), UPL (up 1.59%) and Power Grid Corporation of India (up 1.37%) were major Nifty gainers.

HDFC Bank (down 2.77%), Housing Development Finance Corporation (HDFC) (down 2.71%), HDFC Life Insurance Company (down 2.49%), Tech Mahindra (down 1.76%) and HCL Technologies (down 1.67%) were major Nifty losers.

Stocks in Spotlight:

RBL Bank declined 2.33%. RBL Bank`s total deposits stood at Rs 79,005 crore as of 31 March 2022, recording a growth of 8% over Rs 73,121 crore as of 31 March 2021 and a rise of 7% over Rs 73,639 crore as of 31 December 2021. The bank reported a 13% growth in Retail LCR deposits to Rs 30,681 crore as of 31 March 2022 as against Rs 27,236 crore as of 31 March 2021 and 10% increase from Rs 27,889 crore as compared to 31 December 2021. CASA was at Rs 27,878 crore as of 31 March 2022, recording a growth of 20% over Rs 23,264 crore as of 31 March 2021 and a growth of 10% over Rs 25,318 crore as of 31 December 2021. CASA ratio stood at 35.3% in Q4 FY2022 as compared to 31.8% in Q4 FY2021 and 34.4% in Q3 FY2022. Liquidity Coverage Ratio (LCR) ratio was at 140% in Q4 FY2022 as compared to 154% in Q4 FY2021 and 146% in Q3 FY2022.

Coastal Corporation jumped 6.36%. The company announced that it will soon commence operations at its new plant (Unit III) at Kakinada SEZ in Andhra Pradesh. Coastal Corporation said that it invested Rs 70 crore in Unit III. The facility is a completely integrated and has production capacity of 35 MTPD. The trial production at the facility was conducted on 5 April 2022 and the commercial production will start in the next 10 to 15 days. The Unit III will augment the company`s value-added supply to various parts of the Globe. It will serve as an important base for expanding global sales in the future, the firm said in a statement.

Global Markets:

Shares in Europe and Asia declined on Wednesday, against a backdrop of hawkish comments from U.S. Federal Reserve officials and further sanctions against Russia. Global investors also await the details of fresh international sanctions against Russia after allegations emerged of civilian killings in Ukrainian towns now recaptured from Russian forces. The European Commission on Tuesday proposed banning Russian coal as part of its next round of sanctions.

China`s Caixin Services Purchasing Managers` Index declined to 42.0 in March, well below February`s reading of 50.2 as well as the 50 mark that separates growth from contraction on a monthly basis. Wednesday`s reading was also the lowest since February 2020.

Wall Street`s main indices fell on Tuesday, dragged by weakness in tech and other growth stocks, after comments from Federal Reserve Governor Lael Brainard spooked investors about potential aggressive actions by the central bank to control inflation.

Brainard, who is typically considered one of the more dovish Fed members, said the central bank needs to shrink its balance sheet �rapidly� to drive down inflation. �Inflation is much too high and is subject to upside risks,� she said, noting the Fed needed a steady pace of rate hikes as well.

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