Bourses under pressure in afternoon trade

Indian bourses remained under pressure in afternoon session with Sensex and Nifty trading down by 144 and 46 points respectively. Stocks from healthcare, basic materials and consumer durables counters were trading lower, while energy and oil and gas counters were supporting the markets. Sentiments remain fragile with private reports that Chinese troops 'carried out provocative military movements in Eastern Ladakh to change the status quo' but they were blocked by Indian soldiers. Adding pessimism, apex exporters body FIEO expressed concerns over freezing of bank accounts of some exporters by the Enforcement Directorate (ED) without giving any warning, hearing or reasons, and has sought Commerce Ministry's intervention in the matter. Meanwhile, trade ministers of India and 10-member ASEAN countries have instructed their officials to start discussions for determining the scope of review of free trade agreement (FTA) at the earliest with a view to make the pact more user-friendly, simple, and trade facilitative for businesses.

On the global front; Asian markets were trading mixed as investors monitor political developments in the country. Back on street; in scrip specific developments, RBL Bank declined as its MD sells shares worth over Rs 38.5 crore, while GVK Power and Infrastructure touched upper circuit after the company along with its subsidiaries GVK Airport Developers and GVK Airport Holdings agreed to cooperate with Adani Airport Holdings, the flagship holding company of Adani Group for its airports business and a subsidiary of Adani Enterprises

The BSE Sensex is currently trading at 39322.40, down by 144.91 points or 0.37% after trading in a range of 39111.05 and 40010.17. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.94%, while Small cap index was down by 2.89%.

The only gaining sectoral indices on the BSE were Energy up by 0.85% and Oil & Gas up by 0.37%, while Healthcare down by 2.58%, Basic Materials down by 2.22%, Consumer Durables down by 2.20%, Realty down by 2.01% and Capital Goods was down by 1.87% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.86%, HDFC Bank up by 1.16%, Reliance Industries up by 1.00%, Infosys up by 0.23% and HDFC was up by 0.19%. On the flip side, Sun Pharma down by 4.11%, Kotak Mahindra Bank down by 2.38%, Indusind Bank down by 2.25%, Bharti Airtel down by 2.09% and SBI was down by 2.09% were the top losers.

Meanwhile, Fitch Ratings in its latest report said that Indian pharmaceutical companies' sales will rise after a gradual easing of the coronavirus pandemic-related lockdown measures that caused disruptions across most markets in Q1 (April-June) of FY21. It said this will underpin profitability in the quarter ending September even after normalisation in costs following cuts in Q1 that helped to support profitability despite the impact of the coronavirus.

According to the report, travel restrictions to contain the pandemic reduced the number of doctor visits and hospitals prioritised Covid-19 treatment over other elective procedures. It noted that these affected prescriptions and drug sales volume, particularly those used to treat acute medical conditions with the monthly volume drop varying from high single digits to mid-double digits across markets. Nonetheless, it said resilient sales in chronic segments and active pharma ingredients (API) -- for companies with in-house manufacturing -- limited the overall impact.

Fitch further said some of the indirect costs like travel and marketing costs that were low due to the lockdown measures are likely to return to normal in line with the gradual easing of restrictions since May and June. Nonetheless, it said the gradual easing has led to a rise in doctor visits and elective procedures since May in key markets. It added that this will benefit sales, particularly in acute therapy areas, and support profitability in Q2, notwithstanding the uncertainty over the duration and impact of the pandemic for the rest of FY21.

The CNX Nifty is currently trading at 11600.90, down by 46.70 points or 0.40% after trading in a range of 11528.95 and 11794.25. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were ONGC up by 4.11%, Bharti Infratel up by 3.67%, Adani Ports & SEZ up by 2.15%, Wipro up by 1.42% and HDFC Bank was up by 1.41%. On the flip side, Sun Pharma down by 3.83%, Indusind Bank down by 3.43%, Grasim Industries down by 2.85%, Cipla down by 2.63% and JSW Steel was down by 2.51% were the top losers.

Asian markets were trading mixed; Straits Times advanced 1.31 points or 0.05% to 2,540.94, Hang Seng increased 55.41 points or 0.22% to 25,477.47, Shanghai Composite gained 8.01 points or 0.24% to 3,411.82 and Nikkei 225 was up by 257.11 points or 1.12% to 23,139.76. On the other side; KOSPI fell 27.63 points or 1.17% to 2,326.17, Taiwan Weighted dropped 137.40 points or 1.08% to 12,591.45 and Jakarta Composite was down by 19.62 points or 0.37% to 5,327.04.