Markets trade in red in early deals

Indian equity benchmarks made slightly negative start on Wednesday following weakness in global peers. Soon, markets extended their losses and are trading lower with cut of over half a percent each on account of selling in Utilities, PSU and Oil & Gas stocks. Market participants were looking ahead to the WPI inflation data for September to be announced later in the day. Also, they are eyeing the Supreme Court hearing today on a batch of petitions seeking a waiver of interest on loans during the moratorium period and seeking an extension of the moratorium. Investors were worried over the outlook for economic growth after the International Monetary Fund said India is headed for the biggest slump of any major emerging nation. IMF has projected the Indian economy to contract by 10.3% this year, owing to the coronavirus pandemic. However, the IMF also said that India is likely to bounce back with an impressive 8.8% growth in 2021. The 8.8% growth rate would make India as the fastest growing emerging economy in the world.

On the global front, most of the Asian markets were trading in red tracking the negative cues overnight from Wall Street amid uncertainty about a new stimulus bill as House Speaker Nancy Pelosi and the White House struggled to reach an agreement on a broad relief package. Investors’ sentiment was further dampened following reports that US health regulators have paused Eli Lilly's late-stage trial of its antibody treatment for COVID-19 due to potential safety concerns. Earlier, Johnson & Johnson had paused a late-stage trial of its Covid-19 vaccine candidate due to an unexplained illness in a study participant.

Back home, banking stocks were in focus as CARE Rating said Indian banks are likely to restructure around 4-5 percent of the overall bank credit outstanding while the Gross NPA (non-performing assets) ratio is likely to be 11-11.5 percent by end of FY21. In scrip specific development, Wipro slumped after announcing its Q2 results and unveiling a share buyback plan at Rs 400 per share. On the other hand, Sun Pharma Advanced Research Company gained after it reported positive top-line results from its Phase 3 trial for its investigational drug, SDN-037, for the treatment of Inflammation and Pain associated with Ocular Surgery.

The BSE Sensex is currently trading at 40382.44, down by 243.07 points or 0.60% after trading in a range of 40381.00 and 40623.19. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.23%, while Small cap index was down by 0.56%.

The only gaining sectoral indices on the BSE were Telecom up by 0.27%, Consumer Durables up by 0.14%, while Utilities down by 1.75%, PSU down by 1.51%, Oil & Gas down by 1.46%, Power down by 1.32%, Bankex down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 0.72%, Bharti Airtel up by 0.48%, Asian Paints up by 0.46%, Hindustan Unilever up by 0.40% and Bajaj Auto up by 0.37%. On the flip side, NTPC down by 2.90%, ONGC down by 2.90%, Power Grid down by 2.24%, ITC down by 1.44% and HDFC Bank down by 1.43% were the top losers.

Meanwhile, the International Monetary Fund (IMF), in its latest 'World Economic Outlook' report, has said that India’s Gross domestic product (GDP), severely hit by the coronavirus pandemic, is projected to contract by a massive 10.3 percent in 2020. However, it said the country is likely to bounce back with an impressive 8.8 percent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China's projected growth rate of 8.2 percent.

According to the report, India is among those likely to suffer the greatest damage from global warming, reflecting its initially high temperatures. For India, it said the net gains from climate change mitigation-relative to inaction-would be up to 60-80 per cent of GDP by 2100. It noted that while estimates of losses from climate change are somewhat smaller for colder regions (for example, Europe, North America, and east Asia), these are likely underestimations as they do not include a number of damages (for example, rise in sea levels, natural disasters, damage to infrastructure from thawing of permafrost in Russia) and negative global spillovers from large economic disruptions in other parts of the world.

The report further said global growth would contract by 4.4 percent this year and bounce back to 5.2 percent in 2021. America's economy is projected to contract by 5.8 percent in 2020 and grow by 3.9 percent the next year. China is the only country, among the major economies, to show a positive growth rate of 1.9 per cent in 2020.

The CNX Nifty is currently trading at 11843.30, down by 91.20 points or 0.76% after trading in a range of 11839.65 and 11919.80. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.00%, Britannia Industries up by 0.74%, Bajaj Auto up by 0.64%, Tata Steel up by 0.53% and Bajaj Finserv up by 0.33%. On the flip side, Wipro down by 6.20%, Coal India down by 3.29%, ONGC down by 3.11%, NTPC down by 2.96% and Power Grid down by 2.18% were the top losers.

Asian markets were trading mostly in red; Straits Times lost 13.23 points or 0.52% to 2,554.42, Hang Seng declined 66.28 points or 0.27% to 24,583.40, Taiwan Weighted fell 25.29 points or 0.20% to 12,921.84, KOSPI dropped 9.80 points or 0.41% to 2,393.35, Shanghai Composite was down by 18.02 points or 0.54% to 3,341.73, while Nikkei 225 gained 21.82 points or 0.09% to 23,623.60 and Jakarta Composite rose 11.16 points or 0.22% to 5,143.73.