Broader market outperforms; IT stocks decline

Key indices traded sideways with modest losses in mid morning trade. The Nifty briefly slipped below the 17,800 mark but quickly regained that level. IT, banking and financial shares declined while media, pharmaceutical and oil & gas stocks saw demand.

At 11:24 IST, the S&P BSE Sensex declined 481.21 points or 0.8% to 59,695.2. The Nifty 50 index shed 124.85 points or 0.69% at 17,832.1.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.34% while the S&P BSE Small-Cap index gained 0.58%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, shares 2079 rose and 1149 shares fell. A total of 122 shares were unchanged.

RBI MPC meet:

The Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) will be holding its first meeting of the fiscal year 2022-23 fiscal from 6 April to 8 April. MPC's interest rate decision will be announced on 8 April 2022. In the previous meeting, MPC kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 4%.

Buzzing Index:

The Nifty IT index declined 1.47% to 35,929.25, snapping its three day rising streak. All components in IT index edged lower.

HCL Technologies (down 2%), Mphasis (down 1.89%), Tech Mahindra (down 1.86%), Infosys (down 1.61%) and TCS (down 1.57%) were top losers in IT space.

Stocks in Spotlight:

Larsen & Toubro rose 0.7%. The Buildings & Factories business of the EPC major secured significant contracts from multiple clients. As per L&T's classification, the value of the significant project is Rs 1,000 crore to Rs 2,500 crore.

Angel One gained 1.16% to Rs 1,680.7 after the brokerage said that its client base rose 5.2% to 9.21 million in March 2022 as against 8.76 million in February 2022. The company's client base surged 123.7% YoY as against 4.12 million in March 2021. Gross client acquisition was 0.48 million in March 2022 compared with 0.45 million in February 2022 (up 6%) and 0.38 million in March 2021 (up 26.4%).

Global Markets:

Asian markets were trading lower on Wednesday, mirroring losses seen among their peers on Wall Street following an overnight surge in the U.S. 10-year Treasury yield.

Chinese services sector activity saw a sharp contraction in March, a private survey showed Wednesday. The 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.

After opening the day slightly positive, stocks fell and rates hit their highs after 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.

Investors will continue to monitor moves in U.S. Treasurys. The 10-year Treasury rose to its highest level since May 2019 on Tuesday, hitting a high of 2.562% before settling at 2.55%. The yield on the benchmark 10-year Treasury note last sat at 2.6011%, well above the 2-year Treasury note's yield of 2.5751%.

The 10-year Treasury yield jumped overnight after comments from U.S. Federal Reserve Governor Lael Brainard suggested an aggressive approach to shrinking the central bank's balance sheet.

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