Markets remain in red terrain in morning deals

Indian equity benchmarks trimmed some of their initial losses but remained in red terrain in morning deals, tracking losses in index-heavyweights Maruti Suzuki, ONGC and Power Grid amid negative cues from global markets. Traders remained cautious with a multi-sector survey conducted by CARE Ratings showed that business activity is unlikely to touch pre-COVID-19 levels before March 2021. It added that there is a need for the government to step in and give a ‘push’ to the economy as it has not done enough till now. Traders also took a note of former Niti Aayog vice chairman Arvind Panagariya’s statement that India will need fiscal stimulus, lower interest rates, faster bank recapitalisation and privatisation of some PSUs to return to 7 percent growth rate. Meanwhile, India's imports from China declined by 27.63 percent during April-August this fiscal to $21.58 billion over the same period previous year. Value of imports from China stood at $4.98 billion in August and $5.58 in July.

On the global front, Asian markets were trading mostly in red, on concerns about new pandemic lockdowns in Europe and after reports about financial institutions allegedly moving illicit funds hurt global banking stocks. Back home, on the sectoral front, stocks related to Cement industry remained in watch as India Ratings and Research (Ind-Ra) said cement demand is expected to decline by 10 to 15 percent year-on-year in the second quarter (July to September). It also said rural demand will continue to outperform urban demand and companies having higher individual home builder exposure will remain better placed.

The BSE Sensex is currently trading at 37859.58, down by 174.56 points or 0.46% after trading in a range of 37531.14 and 38209.97. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.35%, while Small cap index was down by 1.93%.

The few gaining sectoral indices on the BSE were Telecom up by 0.79%, Bankex up by 0.26% and TECK up by 0.05%, while Realty down by 2.70%, Industrials down by 1.97%, Oil & Gas down by 1.77%, Capital Goods down by 1.74% and Auto down by 1.72% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.59%, HCL Technologies up by 1.57%, Indusind Bank up by 1.13%, ICICI Bank up by 1.04% and Sun Pharma up by 0.86%. On the flip side, Maruti Suzuki down by 2.63%, ONGC down by 1.76%, Power Grid down by 1.64%, Bajaj Finance down by 1.60% and Reliance Industries down by 1.41% were the top losers.

Meanwhile, Former Niti Aayog vice chairman -- Arvind Panagariya has said India will need fiscal stimulus, lower interest rates, faster bank recapitalisation and privatisation of some PSUs to return to 7 per cent growth rate. Panagariya further said the country lost nearly $125 billion in the April-June period due to the COVID-19 pandemic.

Besides, he pointed out that India's economic growth was slowing down even before COVID-19 hit the country because there was a lot of stress in the financial sector. He emphasised ‘so we need to recapitalise banks now, otherwise NPAs will rise again and it will be difficult for Indian economy to grow at 7-7.5 per cent again. So, we should not commit past mistakes’.

Talking about the farm sector, he said agriculture is important for India because too many people are dependent on it. But, he added agriculture cannot grow more than 4 per cent. So India needs more growth in services and manufacturing sector. India's economy suffered its worst slump on record in April-June, with the gross domestic product (GDP) contracting by 23.9 per cent as the coronavirus-related lockdowns weighed on the already-declining consumer demand and investment. However, agriculture grew by 3.4 per cent during the April -June quarter of the current fiscal.

The CNX Nifty is currently trading at 11204.30, down by 46.25 points or 0.41% after trading in a range of 11084.65 and 11302.20. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.99%, Dr. Reddys Lab up by 1.69%, Bharti Airtel up by 1.69%, HCL Tech. up by 1.31% and ICICI Bank up by 1.28%. On the flip side, Adani Ports &SEZ down by 3.02%, Zee Entertainment down by 2.85%, Maruti Suzuki down by 2.69%, GAIL India down by 2.38% and UPL down by 2.16% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 82.08 points or 0.34% to 23,868.61, Taiwan Weighted dropped 129.04 points or 1.01% to 12,666.08, Shanghai Composite declined 4.06 points or 0.12% to 3,312.88, Jakarta Composite lost 43.37 points or 0.87% to 4,955.99, KOSPI fell 50.91 points or 2.13% to 2,338.48 and Straits Times trembled 16.80 points or 0.68% to 2,468.91.