Markets continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, tracking a subdued trend in other Asian markets. Traders remained cautious with RBI Governor Shaktikanta Das’ statement that the risk of a second wave of COVID-19 could put sand in the wheels of the nascent recovery. He also said the decision to cut benchmark repo rate would depend upon the evolving situation with regard to inflation which is currently above the tolerance level of the central bank. Some concern also came with report that  as many as 441 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.35 lakh crore owing to delays and other reasons. However, losses remain capped as the Reserve Bank of India (RBI) encourages investment in sovereign bonds as part of liquidity measures. The RBI is making longer-tenor sovereign bonds attractive again. Meanwhile, the Ministry of Finance has issued operational guidelines for implementation of the interest waiver scheme ahead of the hearing in the matter in the apex court on November 2.

On the global front, Asian markets were trading mostly in red as surging coronavirus cases in Europe and the United states undermined the global outlook, while China's leaders meet to ponder the future of the economic giant. Back home, on the sectoral front, Agriculture sector stocks were in focus as Prime Minister Narendra Modi said his government is taking initiatives to strengthen the agriculture sector in the country so that farmers do not have to face any trouble. Besides, Airline stocks were buzzing as the Directorate General of Civil Aviation (DGCA) has approved 12,983 weekly domestic flights of airlines for the winter schedule that begins on October 25, 2020 and ends on March 27 next year.

The BSE Sensex is currently trading at 40564.31, down by 121.19 points or 0.30% after trading in a range of 40495.45 and 40724.40. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.34%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were Telecom up by 0.25%, Utilities up by 0.24%, FMCG up by 0.20%, Capital Goods up by 0.19% and Industrials up by 0.12%, while Metal down by 1.65%, Energy down by 1.51%, Realty down by 0.91%, Basic Materials down by 0.73% and Consumer Discretionary down by 0.58% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.22%, Nestle up by 2.22%, Power Grid up by 1.15%, Larsen & Toubro up by 0.62% and HCL Technologies up by 0.56%. On the flip side, Tech Mahindra down by 1.92%, Reliance Industries down by 1.86%, Tata Steel down by 1.68%, Asian Paints down by 1.27% and Titan Company down by 1.22% were the top losers.

Meanwhile, PHD Chamber of Commerce and Industry (PHDCCI) has said that it expects India's GDP to contract by 7.9 per cent in the current financial year (FY21) and grow by 7.7 per cent in FY22, assessing that the worst is over and the economy is on the verge of a slow recovery. However, it stated that unemployment remains a key challenge to be addressed by the government. It drew the conclusions based on its analysis of 25 high-frequency economic indicators which point out that there has been a pickup in business normalization.

However, it the unemployment rate still remains a worry as it worsened to 8.3 per cent in August from 7.4 per cent in July. Further, it said India should focus on moving away from imports from China, divert trade towards friendly economies, build domestic capacities and significantly scale-up indigenous production with a thrust to become self-reliant.

Besides, it said that efforts should be made to diversify the portfolio of export products in terms of more countries and also in terms of more products, where India has a core competence. PHDCCI President Sanjay Aggarwal said on the back of various reforms undertaken by the government during the last six months, economic recovery has become visible in the high-frequency indicators.

The CNX Nifty is currently trading at 11897.70, down by 32.65 points or 0.27% after trading in a range of 11877.00 and 11942.85. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.23%, Nestle up by 2.22%, HDFC Life Insurance up by 1.96%, Adani Ports &SEZ up by 1.85% and Power Grid up by 1.18%. On the flip side, JSW Steel down by 3.50%, Hero MotoCorp down by 2.75%, Reliance Industries down by 2.04%, Tech Mahindra down by 1.90% and UPL down by 1.72% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 23.46 points or 0.72% to 3,254.54, Nikkei 225 slipped 23.18 points or 0.1% to 23,493.41, KOSPI fell 11.91 points or 0.5% to 2,348.90 and Straits Times trembled 2.49 points or 0.1% to 2,534.90.

On the flip side, Taiwan Weighted strengthened 24.22 points or 0.19% to 12,923.04 and Jakarta Composite soared 36.39 points or 0.71% to 5,148.58.