Domestic indices trade lower in early deals on global sell-off

Indian equity benchmarks made gap-down opening on Thursday following sell-off in the global markets amid rising coronavirus cases. Domestic markets were trading lower with around half a percent cut in early deals on account of selling in Consumer Durables, Capital Goods and Industrials counters. October series derivative expiry later in the day also impact markets. Sentiments were dampened with report that India has reported a daily jump of nearly 50,000 Covid-19 cases, even as the tally has soared past the 8-million mark. The country's death toll has mounted to 120,563. Meanwhile, the Commerce and Industry Ministry has released the next edition of its consolidated foreign direct investment (FDI) policy document, incorporating all the changes made over the past year.

Weakness in global markets dented sentiments in domestic markets, with Asian markets were trading in negative territory as the continued surge in coronavirus cases in the US and Europe, new lockdown measures in Germany and France, and lingering uncertainty about US fiscal stimulus added to worries about the global economic recovery. The markets in Malaysia and Indonesia are closed in observance of the birth of the Prophet Muhammad.

Back home, airline industry stocks will be in focus with the Directorate General of Civil Aviation’s statement that the suspension of scheduled international passenger flights has been extended till November 30 amid the coronavirus pandemic. In scrip specific development, ICICI Securities gained 0.7 percent on reporting two-fold jump in quarterly profit.

The BSE Sensex is currently trading at 39723.46, down by 199.00 points or 0.50% after trading in a range of 39524.25 and 39754.66. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.22%, while Small cap index was down by 0.77%.

The few gaining sectoral indices on the BSE were Power up by 0.28%, Basic Materials up by 0.08%, while Consumer Durables down by 2.28%, Capital Goods down by 1.65%, Industrials down by 1.20%, PSU down by 0.74%, FMCG down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.97%, Asian Paints up by 1.45%, Ultratech Cement up by 1.06%, Tata Steel up by 0.36% and HCL Technologies up by 0.21%. On the flip side, Titan Company down by 4.23%, Larsen & Toubro down by 4.08%, ONGC down by 2.49%, Tech Mahindra down by 1.74% and Bajaj Auto down by 1.40% were the top losers.

Meanwhile, domestic credit rating agency Crisil in its latest report has said that financial conditions in India have staged a speedy recovery from the harrowing abyss they had been sent flailing into by the coronavirus disease (covid-19) pandemic in April, 2020. It said the Reserve Bank of India’s (RBI) measures have helped mitigate the large and broad-based economic damage caused by the pandemic. However, it made it clear that pockets of stress still remain, pointing to the weak bank credit growth, wider spreads on lower-rated corporate bonds, and fundamental pressures due to high government borrowing.

The agency has used 15 conditions for constructing the Financial Conditions Index (FCI), which includes monetary policy conditions, money market, equity markets, external finance conditions, bank lending conditions and money supply in the economy. It said the FCI is designed to give a comprehensive measure of financial conditions for the Indian economy by capturing price and supply variables across financial markets, along with prevailing risk sentiments. It added that not only does it capture the extent of monetary policy transmission across various financial market segments, but also evaluates the policy stance itself in the context of prevailing inflation conditions.

According to the report, the multitude of steps taken by the RBI, coupled with global easing have helped ease the financial conditions in India visibly since April, though weak bank credit growth, wider spreads of lower-rated corporate bonds, and fundamental pressure imposed by high government borrowing indicate that some stress persists. It also noted that while the central bank's accommodative stance should help in the short-run, it remains to be seen until when and to what extent these pressures will be masked.

The CNX Nifty is currently trading at 11665.05, down by 64.55 points or 0.55% after trading in a range of 11609.20 and 11675.40. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 1.68%, Asian Paints up by 1.51%, Ultratech Cement up by 0.82%, UPL up by 0.47% and Tata Steel up by 0.46%. On the flip side, Titan Company down by 4.10%, Larsen & Toubro down by 4.00%, ONGC down by 2.34%, Tata Motors down by 2.11% and Tech Mahindra down by 1.99% were the top losers.

Asian markets were trading in red; Nikkei 225 lost 85.46 points or 0.36% to 23,333.05, Straits Times fell 21.07 points or 0.85% to 2,462.41, Hang Seng slipped 229.96 points or 0.93% to 24,478.84, Taiwan Weighted plunged 151.16 points or 1.18% to 12,642.59, KOSPI declined 39.99 points or 1.71% to 2,305.27 and Shanghai Composite was down by 2.48 points or 0.08% to 3,271.72.