Metals drag Sensex down by 337 points, Nifty ends near 14,900

Benchmark Indian equity indices extended morning losses in afternoon trades and ended in the red for the second consecutive day amid mixed global cues and selling was witnessed in Metal, Telecom and Oil & Gas stocks. At close, the Sensex slipped 337 points or 0.68% at 49,564, and the Nifty ended at 14,906 tanking 124 points or 0.83%.

Gainers & losers:

Tata Steel, Hindalco Industries, Coal India, Britannia Industries and ONGC were among the top losers on the Nifty. Gainers included M&M, Cipla, BPCL, IndusInd Bank and Titan Company.

“Indian markets opened positive but soon started trading in negative following mixed Asian markets as minutes showed some Federal Reserve officials contemplating a wind-down of its vast monetary easing measures, while optimism remained buoyed by the outlook for the economic recovery,” said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers.

Traders were also worried as private reports stated that the government’s strategic divestment plans for the fiscal year 2021-22 has slowed down due to the second wave of COVID-19, added Solanki.

Sectorally, the Nifty Metal index sunk over 3 per cent with Tata Steel, Steel Authority of India (SAIL), and Jindal Steel and Power (JSPL) sliding 5% each. Likewise, the Nifty Bank and Nifty FMCG indices slipped nearly 1%. On the contrary, the Nifty Realty index ended with gains of over 1%.

The broader market outperformed benchmark indices as the BSE SmallCap index ended at 22,980 gaining 0.22% after hitting a record high of 23,093 on an intra-day basis. BSE MidCap index closed with a marginal loss of 0.12%.

Economy:

The Global Trade Update by the United Nations Conference on Trade and Development (UNCTAD) on Wednesday said that in Q1 2021, the value of global trade in goods and services grew by about 4% quarter-over-quarter and by about 10% year-over-year.

UNCTAD said that India, China and South Africa fared ‘relatively better’ than other major economies during the first quarter of 2021 even as global trade recovery from the COVID-19 impact reached a new high.

The data for India said that import of goods grew 45% in Q1 2021 relative to the 2020 average while services imports were up 14%. Export of goods for India grew 26% for the period under review while services exports grew 2%.

Global markets:

European shares were trading higher while Asian stocks were mixed on Thursday, 20 May 2021. Japan’s exports grew the most since 2010 in April, supported by a favourable comparison with the sharp plunge seen during the pandemic last year. Data out on Thursday showed exports rose 38% in April from a year earlier, compared with a 16.1% rise in March.

China’s benchmark lending rate was kept unchanged in May, with the one-year loan prime rate (LPR) sitting at 3.85%. The five-year LPR was also held steady at 4.65%.

Wall Street’s main indexes closed lower on Wednesday after minutes from an April Federal Reserve meeting showed participants agreed the U.S. economy remained far from the central bank’s goals, with some considering discussions on tapering its bond-buying program.

The Fed’s minutes said a strong pickup in economic activity would warrant discussions about tightening monetary policy in the coming months.

A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases, according to minutes from the April 27-28 Federal Open Market Committee meeting published Wednesday.

In a press conference following last month’s meeting, Chair Jerome Powell had said that it was premature to start talking about tapering.