Benchmarks trade lower in early deals

Indian equity benchmarks made weak start on Wednesday amid concerns over India-China tensions and sell-off in the global markets. Domestic indices are trading in red with cut of around 0.40% each in early deals. Selling in Metal, PSU and Oil & Gas counters weighted down on the markets. Rising coronavirus cases in the country also dampened sentiments. India has recorded nearly 90,000 new Covid-19 cases in the past 24 hours. With this, the country's tally has surged past the 4.3 million mark to 4,367,436. Death toll has climbed to 73,923. Traders were concerned with report that the clinical trials for the Covid-19 vaccine candidate developed by the University of Oxford, which was expected to start at PGIMER in Chandigarh, have been delayed by at least a week over safety approvals. Though, markets trimmed some of their early losses taking support with a private report that the Indian economy is expected to climb from a deeper trough in the calendar year 2020 (CY20) and see a stronger rebound in the year 2021.

Global cues remained lackluster with all the Asian markets trading lower following the sharp losses overnight on Wall Street for the third straight session after another strong round of selling in technology stocks. Worries that a coronavirus vaccine candidate being developed by AstraZeneca in partnership with the University of Oxford could be delayed also weighed on the markets. According to reports, AstraZeneca has halted its late-stage COVID-19 vaccine trial due to a potentially unexplained illness in a U.K. volunteer.

Back home, stocks of oil-marketing companies (OMCs), paint, aviation, and tyre companies were in focus as the US crude Tuesday slipped nearly 8 per cent after Saudi Arabia cut its October selling prices and Covid-19 cases rebounded in many countries. In scrip specific development, IRCTC was trading under pressure as the government plans to sell about 15-20 per cent stake in IRCTC via offer for sale (OFS) and would like to complete the transaction in minimum number of tranches.
The BSE Sensex is currently trading at 38219.78, down by 145.57 points or 0.38% after trading in a range of 37980.69 and 38252.67. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.69%, while Small cap index was down by 0.94%.

The top gaining sectoral indices on the BSE were TECK up by 0.18%, Energy up by 0.18%, IT up by 0.17%, Healthcare up by 0.08%, while Metal down by 1.93%, PSU down by 1.84%, Oil & Gas down by 1.21%, Bankex down by 1.18%, Utilities down by 1.18% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.21%, Mahindra & Mahindra up by 0.91%, Reliance Industries up by 0.79%, Bharti Airtel up by 0.48% and TCS up by 0.33%. On the flip side, ONGC down by 3.62%, SBI down by 2.38%, ITC down by 1.67%, Tata Steel down by 1.61% and Bajaj Finserv down by 1.55% were the top losers.

Meanwhile, Fitch Ratings in its latest report has sharply lowered its forecast for India's gross domestic product (GDP) growth for the current fiscal year (FY21) to (-) 10.5 percent from (-) 5 percent estimated earlier. It pointed out that the continued spread of the virus and the imposition of sporadic shutdowns across the country depress sentiment and disrupts economic activity. It further noted that the severe fall in activity has also damaged household and corporate incomes and balance sheets, amid limited fiscal support.

According to the Fitch projections, GDP growth is likely to be (-) 9.6 percent in July-September, (-) 4.8 percent in October-December and 4 percent in January-March quarter this fiscal. For the next fiscal, Fitch estimated Indian economy to grow 11 percent, while for 2022-21 growth would be 6 percent.

The report further stated that a looming deterioration in asset quality in the financial sector will hold back credit provision amid weak bank capital buffers. Furthermore, it said high inflation has added strains to household income and supply-chain disruption and excise duties increases have caused prices to rise. However, it expects inflation to slow amid weak underlying demand, an easing in supply-chain disruptions and a good monsoon.

The CNX Nifty is currently trading at 11266.85, down by 50.50 points or 0.45% after trading in a range of 11207.50 and 11281.75. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Wipro up by 1.95%, HDFC Life Insurance up by 1.18%, Hero MotoCorp up by 1.15%, Asian Paints up by 1.00% and Mahindra & Mahindra up by 0.76%. On the flip side, ONGC down by 3.69%, GAIL India down by 3.01%, SBI down by 2.96%, Coal India down by 2.69% and Hindalco down by 2.30% were the top losers.

Asian markets were trading in red; Nikkei 225 declined 324.13 points or 1.39% to 22,950.00, Straits Times slipped 14.58 points or 0.58% to 2,490.18, Hang Seng fell 242.65 points or 0.99% to 24,381.69, Taiwan Weighted dropped 122.42 points or 0.97% to 12,541.14, KOSPI lost 17.72 points or 0.74% to 2,384.19, Jakarta Composite plunged 66.00 points or 1.26% to 5,178.07 and Shanghai Composite was down by 35.46 points or 1.07% to 3,280.96.