Local indices trade with minor cut in morning deals

Indian benchmark indices erased all of their initial gains and were trading in range with minor losses in morning session, as weak global cues, rising coronavirus cases in the country and concerns about economic recovery weighed on sentiment. Traders turned wary with the Reserve Bank of India’s statement that the contraction in economic activity was likely to continue in the second quarter of the current fiscal as upticks witnessed in May and June appears to have lost strength following re-imposition of lockdowns to contain the coronavirus pandemic. Some concern also came with rating agency ICRA’s report that the economy is expected to contract by 25 per cent each in the first quarter of FY'21 both in terms of GDP (gross domestic product) as well GVA (gross value added). However, downside remains capped as some optimism remained among traders with Union Expenditure Secretary T V Somanathan’s statement that the government may look at introducing a second set of fiscal stimulus measures once the COVID-19 infections abate and the psychological fears in people's minds ebb. On the global front, Asian markets were trading mostly in red, as investors await a speech by Federal Reserve Chairman Jerome Powell for cues on inflation and monetary policy. 

Back home, on the sectoral front, stocks related to oil and gas sectors remained on buyers’ radar as state-owned oil firms plan to spend about Rs 1.2 lakh crore in the fiscal year to March 2021 on oil and gas exploration and production and refineries in a bid to boost economic activity in the nation that has been hit hard by the COVID-19 pandemic. Shipping sector’s stocks too were in focus as rating agency ICRA said the port sector is witnessing early signs of recovery and the rate of cargo decline at major and non-major ports decelerated in July. It noted that the Indian port sector witnessed sharp contraction during the first quarter of 2021 due to the impact of COVID-19 pandemic and containment measures adopted by the government.

The BSE Sensex is currently trading at 38777.45, down by 66.43 points or 0.17% after trading in a range of 38765.09 and 38980.60. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.14%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Auto up by 1.42%, Bankex up by 0.75%, Consumer Disc up by 0.60%, Industrials up by 0.24% and Metal up by 0.22%, while Telecom down by 1.68%, Energy down by 0.79%, Basic Materials down by 0.44%, TECK down by 0.32% and Capital Goods down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.32%, Indusind Bank up by 2.57%, Bajaj Finserv up by 1.95%, Axis Bank up by 1.83% and ONGC up by 1.30%. On the flip side, Bharti Airtel down by 2.01%, Asian Paints down by 1.53%, Ultratech Cement down by 1.15%, TCS down by 1.07% and Tech Mahindra down by 1.06% were the top losers.

Meanwhile, Moody's Investors Service in the August update of Global Macro Outlook 2020-21 has said India, China and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP (Gross Domestic Product) in the second half of 2020. Further, it retained its projection of 3.1 per cent growth contraction for India in 2020.

It mentioned ‘the economic outlook of emerging market countries is more challenging than in advanced economies. In our baseline projections, China, India and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020 and full-year 2021 to end next year above pre-coronavirus levels’.

For 2021 year, it has projected Indian economy to grow 6.9 per cent. The Indian economy grew at the slowest pace in 11 years at 4.2 per cent in 2019-20. It stated an economic recovery is underway, but its continuation will be closely tied to the containment of the virus. Besides, it projected a 4.6 per cent contraction for G-20 economies in 2020, followed by 5.3 per cent growth in 2021.

The CNX Nifty is currently trading at 11466.85, down by 5.40 points or 0.05% after trading in a range of 11461.85 and 11517.55. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 4.89%, Adani Ports &SEZ up by 4.70%, Zee Entertainment up by 4.08%, Bajaj Auto up by 3.48% and Tata Motors up by 3.19%. On the flip side, Britannia down by 2.06%, Bharti Airtel down by 2.03%, Asian Paints down by 1.65%, Grasim Industries down by 1.44% and Ultratech Cement down by 1.29% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 16.39 points or 0.07% to 23,280.38, Jakarta Composite lost 6.36 points or 0.12% to 5,332.53, Straits Times trembled 24.12 points or 0.94% to 2,534.91, KOSPI fell 4.70 points or 0.2% to 2,362.03, Shanghai Composite declined 36.55 points or 1.08% to 3,337.03 and Hang Seng decreased 53.75 points or 0.21% to 25,432.47.

On the flip side, Taiwan Weighted strengthened 25.60 points or 0.2% to 12,783.85.