Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in afternoon session, amid negative signals from other Asian markets. Stocks from Utilities, Oil & Gas and Energy counters were trading lower, while IT, TECK and Healthcare counters were supporting the markets. Sentiments remain dampened with India Ratings and Research’s report stating that the impact of Covid-19 and the associated policy response may result in an additional Rs 1.67 lakh crore of debt from the top 500 debt-heavy private sector borrowers turning delinquent between FY21 and FY22. Traders also took note of Tata Consumer Products’ Chairman N Chandrasekaran’s statement that the current economic scenario in India as well as global markets is challenging but it is also a learning opportunity to closely monitor consumer trends and buying behaviour across markets to effectively adapt business models and product offerings.

On the global front; Asian markets were trading mostly lower, weighed on the intensified worries over spurred covid-19 cases in some US states and other parts of the world. Back on street, on the sectoral front, hotel stocks remain in limelight as Maharashtra government allowed hotels and other entities providing accommodation services outside containment zones to resume operations at 33 per cent of their capacity from July 8.

The BSE Sensex is currently trading at 36381.40, down by 105.88 points or 0.29% after trading in a range of 36271.09 and 36660.35. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.16%, while Small cap index was up by 0.13%.

The few gaining sectoral indices on the BSE were IT up by 0.75%, TECK up by 0.43% and Healthcare was up by 0.08%, while Utilities down by 2.16%, Oil & Gas down by 2.07%, Energy down by 1.60%, PSU down by 1.60% and Power was down by 1.29% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 3.49%, Infosys up by 2.28%, Indusind Bank up by 2.26%, ICICI Bank up by 1.82% and Bajaj Finserv was up by 1.69%. On the flip side, Mahindra & Mahindra down by 2.88%, Power Grid Corporation down by 2.81%, ITC down by 2.48%, Ultratech Cement down by 2.45% and Tata Steel was down by 2.13% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that India’s solar capacity addition is likely to come down further by 15 percent to about 5.5 gigawatts (GW) in the current financial year (FY21), given the continued execution challenges post lockdown restrictions since March 2020, which have resulted in disruption of supply chain along with labour availability issues. It noted that the solar capacity addition was also 15 percent lower at 6.5 GW in FY20 than its previous estimate of around 7-7.5 GW.

According to the report, the domestic solar capacity addition in FY20 has remained lower, mainly on account of the disruption in supply chain and execution disruption in Q4 FY20 due to the COVID-19 pandemic. It also stated that the restrictions and the lack of availability of labourers have added to the woes of the sector that continues to remain plagued by various execution-related issues such as delays in land acquisition, receipt of evacuation approvals, regulatory delays in tariff adoption, and obtaining financial closure in a tight-financing environment.

Further, the report said the announced tender pipeline by Solar Energy Corporation of India (SECI) has been significant. It said strong policy focus and an improved tariff competitiveness keep the solar sector prospects intact in the long run. However, it noted that in the current scenario, with the dip in demand after the lockdown due to the COVID-19 pandemic, revenues and cash flows of the state-owned distribution utilities have been affected leading to increase in the counter-party credit risk for the sector.

The CNX Nifty is currently trading at 10738.75, down by 24.90 points or 0.23% after trading in a range of 10689.70 and 10803.60. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 3.86%, Indusind Bank up by 2.68%, Infosys up by 2.30%, ICICI Bank up by 2.16% and Bajaj Finserv was up by 1.85%. On the flip side, Adani Ports &SEZ down by 4.10%, Power Grid Corporation down by 2.87%, Mahindra & Mahindra down by 2.74%, Grasim Industries down by 2.55% and ITC was down by 2.55% were the top losers.

Most of the Asian markets were trading in red; KOSPI fell 23.76 points or 1.09% to 2,164.17, Jakarta Composite lost 3.61 points or 0.07% to 4,985.26,, Nikkei 225 slipped 99.75 points or 0.44% to 22,614.69, Straits Times trembled 14.64 points or 0.54% to 2,674.97, Taiwan Weighted dropped 23.73 points or 0.2% to 12,092.97 and Hang Seng was down by 166.96 points or 0.63% to 26,172.20.

On the flip side; Shanghai Composite was up by 45.16 points or 1.35% to 3,378.04.