Sensex slips for 2nd day as hawkish Fed looms; HDFC shines after Q4 show

Equities remained under pressure for the second session running on Monday as investors stayed on the sidelines ahead of a crucial meeting of the US Federal Reserve this week where it is expected to go for an aggressive rate hike to tame runaway inflation.

A weak rupee and persistent foreign fund outflows further weighed on bourses, though encouraging domestic macroeconomic data like all-time high GST collections and strong manufacturing PMI cushioned the fall.

After plunging over 600 points in intra-day trade, the 30-share BSE Sensex recouped most losses to end 84.88 points or 0.15 per cent lower at 56,975.99.

On similar lines, the broader NSE Nifty shed 33.45 points or 0.20 per cent to close at 17,069.10.

Titan was the biggest laggard in the Sensex pack, tumbling 2.95 per cent, followed by Wipro, Tech Mahindra, Infosys, Asian Paints, Maruti, SBI and Kotak Bank.

In contrast, IndusInd Bank, NTPC, PowerGrid, Tata Steel, HDFC and ITC were among the prominent gainers, jumping as much as 4.17 per cent.

HDFC advanced 1.55 per cent after the country's largest mortgage lender reported a 16 per cent rise in standalone net profit to Rs 3,700 crore for the March 2022 quarter. HDFC Bank too rose 1.33 per cent.

The market breadth was negative, with 19 declines and 11 advances.

"The recent hawkish turn by Fed has made investors extra cautious ahead of the upcoming Fed meeting triggering high volatility in the market. The rising dollar index, FII selling spree and elevated commodity prices further hammered the risk sentiment.

"On the other hand, domestic numbers like GST collection, auto sales numbers and manufacturing PMI for the month of April gave a sense of an improving economic outlook," said Vinod Nair, Head of Research at Geojit Financial Services.

The GST collection in April touched the highest-ever level of about Rs 1.68 lakh crore, up 20 per cent from the year-ago period, on improved compliance and recovery in business activity.

India's manufacturing sector activities witnessed faster growth in April amid quicker increases in production as well as factory orders, and renewed expansion in international sales.

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) rose from 54.0 in March to 54.7 in April, as a retreat of COVID-19 restrictions continued to support demand.

In the broader market, the BSE smallcap gauge declined 0.87 per cent, while the midcap index dipped 0.47 per cent.

Among BSE sectoral indices, consumer durables tumbled 2.37 per cent, followed by telecom (1.68 per cent), IT (1.47 per cent) and auto (1.19 per cent). Among the gainers, metal jumped 0.77 per cent, basic materials 0.28 per cent and power 0.22 per cent.

World markets were subdued in holiday-thinned trading ahead of the Fed policy meeting on Wednesday.

Elsewhere in Asia, markets in Seoul and Tokyo settled lower, while Shanghai and Hong Kong were closed for holidays.

Bourses in Europe were also trading lower in the afternoon session.

Stocks in the US had ended significantly lower on Friday.

Meanwhile, international oil benchmark Brent crude declined 2.61 per cent to USD 104.3 per barrel.

The rupee pared initial gains to settle almost flat at 76.51 per US dollar on Monday as subdued domestic equities offset the impact of a sharp decline in global crude oil prices.

Foreign institutional investors offloaded shares worth a net Rs 3,648.30 crore on Friday, after turning net buyers in the previous session, according to stock exchange data.

Equity markets will remain closed on Tuesday for Eid-Ul-Fitr.