Benchmarks continue lackluster trade slightly in red

Indian equity benchmarks continued their lackluster trade slightly in red in morning session, following a mixed trend in Asian peers as investors await the US Federal Reserve’s interest rate decision. Traders remained cautious as global forecasting firm Oxford Economics expects India's GDP growth to lose momentum from late third quarter (October-December) of the current fiscal as the push from the initial reopening fades. Fast-rising Covid cases also kept sentiments subdued. However, better than expected June quarter earnings capped losses for the benchmark indices. Some optimism also remained among the traders with Union Minister Nitin Gadkari’s statement that the government is making efforts to attract FDI in infrastructure sector to address liquidity crunch faced by the COVID-19-hit economy. On the sectoral front, aviation stocks remained in focus as International Air Transport Association (IATA) has released recovery estimates on Global passenger traffic and said it would take until 2024 for passenger traffic to return to the pre-crisis level.

On the global front, Asian markets were trading mixed, amid U.S.-China tensions and concern a recovery from the coronavirus pandemic might be weakening. Back home, the BSE Sensex is currently trading at 38395.45, down by 97.50 points or 0.25% after trading in a range of 38336.03 and 38617.03. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.84%, while Small cap index was up by 0.84%.

The top gaining sectoral indices on the BSE were Metal up by 1.40%, Capital Goods up by 1.28%, Basic Materials up by 1.24%, Utilities up by 1.13% and Healthcare up by 1.08%, while Energy down by 0.96%, IT down by 0.50%, TECK down by 0.45%, Auto down by 0.22% and Oil & Gas down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.00%, Tata Steel up by 2.86%, Larsen & Toubro up by 2.00%, Ultratech Cement up by 1.91% and Sun Pharma up by 1.55%. On the flip side, Nestle down by 1.82%, HCL Technologies down by 1.41%, Reliance Industries down by 1.23%, Mahindra & Mahindra down by 1.10% and Infosys down by 1.06% were the top losers.

Meanwhile, the Confederation of Indian Industry (CII) has said that high frequency indicators are showing a material improvement as against multi-year low seen in April, and pointing towards a V-shaped recovery after the economy suffered on account of lockdown amid the coronavirus pandemic. It noted that a clutch of indicators including GST collections, railway freight traffic, petrol consumption, peak power demand, electronic toll collections, among others, have all mirrored the incipient signs of recovery.

CII further said although it is not possible to predict the course of the pandemic, a dashboard approach, triggering predictable responses based on the progression of infections, can reduce uncertainty and boost both consumer and industry confidence, which in turn will support demand and investment recovery. Also, it said in order to ensure that the supply chains function seamlessly across state and district boundaries, including the containment zones, the latter should be limited to micro areas instead of a wider area. On its part, the government has played a big role in driving the nascent recovery process by providing direct cash and food transfers to the rural and urban poor. In a significant confidence building measure, it is encouraging to note that the government dues to the industry have started coming in, which are likely to serve as a big and a direct liquidity booster to industry.

The industry body said other marquee schemes announced as a part of the Atmanirbhar stimulus package, such as the Rs 3 lakh crore collateral free loan for MSMEs & other businesses and the Rs 30,000 crore special liquidity scheme for NBFCs/HFCs/MFs have all taken off well. It also said that it is pertinent to note that the recession staring at economy in the current year is different from the previous recorded episodes of recession which were all triggered by a monsoon failure.

The CNX Nifty is currently trading at 11280.85, down by 19.70 points or 0.17% after trading in a range of 11262.65 and 11341.40. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.99%, Tata Steel up by 2.83%, Bharti Infratel up by 2.62%, Grasim Industries up by 2.42% and Larsen & Toubro up by 2.02%. On the flip side, Nestle down by 1.79%, HCL Technologies down by 1.31%, Adani Ports &SEZ down by 1.29%, Reliance Industries down by 1.23% and Mahindra & Mahindra down by 1.08% were the top losers.

Asian markets were trading mixed; Hang Seng increased 29.18 points or 0.12% to 24,801.94, KOSPI rose 2.84 points or 0.13% to 2,259.83, Taiwan Weighted strengthened 0.13 points or 0% to 12,586.86 and Shanghai Composite gained 33.80 points or 1.05% to 3,261.76. On the flip side, Nikkei 225 slipped 236.86 points or 1.05% to 22,420.52, Straits Times trembled 4.09 points or 0.16% to 2,578.88 and Jakarta Composite lost 11.26 points or 0.22% to 5,101.73.