Weak trade persists over Dalal Street

Weak trade continued over the Dalal Street in noon deals, despite firm cues from other Asian markets. Heavy selling in Consumer Durables and Banking sectors kept the markets below neutral lines. Traders failed to take any senses of relief from former union minister Suresh Prabhu’s statement that focusing on district level growth in post-COVID period will help creating huge employment opportunities, contain migration from villages and push India's GDP. He said that increasing district level growth by additional 3 per cent will help increase the national GDP.

On the global front, Asian markets were trading in green, as China's exports expanded in April despite the global outbreak of coronavirus, or covid-19, pandemic hurting global demand. The data from the General Administration of Customs revealed that in dollar terms, exports grew 3.5 percent on a yearly basis in April, confounding expectations for a decline of 12.1 percent. Shipments had declined 6.6 percent in March.

The BSE Sensex is currently trading at 31476.00, down by 209.75 points or 0.66% after trading in a range of 31362.96 and 31705.25. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.09%, while Small cap index was up by 0.06%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.42%, Realty up by 0.34%, Metal up by 0.12%, IT up by 0.10% and Energy up by 0.08%, while Consumer Durables down by 1.65%, Bankex down by 1.27%, Power down by 1.22%, Utilities down by 1.16% and PSU down by 1.13% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.62%, Sun Pharma up by 1.59%, Mahindra & Mahindra up by 1.41%, Tech Mahindra up by 1.28% and Axis Bank up by 0.61%. On the flip side, ONGC down by 3.60%, Kotak Mahindra Bank down by 3.12%, Titan Company down by 2.96%, Ultratech Cement down by 2.32% and Power Grid down by 2.24% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that India’s footwear sector is likely to witness a 10-15 percent decline in revenues in the current financial year (FY21), on the back of closure of retail outlets coupled with weak consumer sentiment due to ongoing Covid-19 nationwide lockdown.

Rating agency has noted that while volumes would be considerably impacted, a marginal decline in the average selling price (ASP) is also likely due to the expected discounts owing to the companies' inclination to convert the limited footfalls, post Covid-19 into sales to shore up their cash flows while liquidating the inventory. Further, it said factors like the impact on disposable incomes, consumer sentiment, closure of educational institutes, offices, public spaces and drop in movements, will keep the demand for footwear subdued in FY2021. It added that this apart, due to downtrading by consumers, the impact is expected to be higher on the premium segment as against the value segment.

According to the report, the decline in exports, of leather and leather products, was very sharp 37 percent in March 2020. It pointed out that leather footwear accounts for the largest portion of exports of leather products from India, at 39 per cent in FY2019, followed by leather goods at 25 per cent and finished leather at 13 per cent. Owing to this, it said the capex outgo for the year FY2021, both in terms of addition to the manufacturing capacity of plants as well as addition to the retail store network, is likely to be moderated by the footwear companies to preserve cash. 

The CNX Nifty is currently trading at 9209.10, down by 61.80 points or 0.67% after trading in a range of 9175.90 and 9277.85. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 6.40%, Adani Ports up by 4.53%, Indusind Bank up by 1.76%, Tech Mahindra up by 1.65% and Sun Pharma up by 1.61%. On the flip side, BPCL down by 3.77%, ONGC down by 3.66%, Kotak Mahindra Bank down by 3.29%, Titan Co down by 2.85% and Britannia Inds down by 2.37% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 rose 45.43 points or 0.23% to 19,664.78, Taiwan Weighted surged 96.84 points or 0.90% to 10,871.82, KOSPI increased 7.09 points or 0.37% to 1,935.85 and Shanghai Composite inched up by 0.29 points or 0.01% to 2,878.43, while Hang Seng was down by 134.40 points or 0.56% to 24,003.08.