Markets trade lower with marginal losses in early deals

Indian equity benchmarks made gap-down opening on Thursday amid revived coronavirus fears and sell-off in global markets. India has reported merely 45,439 fresh Covid-19 cases in the past 24 hours. The total caseload now stands at 8,958,143. The country's death toll has mounted to 131,618. But, soon markets erased most of their losses and are trading near neutral lines with marginal losses in early deals. Traders were concerned with a private report that India is among the few major nations among emerging and developing economies with higher inflation in October 2020 compared to December 2019 (pre-Covid levels). Also, among these nations, the rise in core inflation is the highest in India. however, losses got trimmed with another private report that overseas investors have pumped in $6.3 billion in Indian equity markets in three months ended September on attractive valuations, opening-up of the economy and resumption in business activities.

On the global front, most of the Asian markets were trading lower following the overnight losses on Wall Street, as concerns about new lockdowns and restrictions following the recent surge in coronavirus cases across the world offset upbeat news regarding the coronavirus vaccine candidate being developed by Pfizer and BioNTech. Daily coronavirus cases hit fresh highs in Japan and South Korea on Wednesday, while South Australia has commenced six days of stay-at-home restrictions.

Back home, most of the aviation stocks were trading higher as data released by Directorate General of Civil Aviation showed that domestic air traffic jumped by 33.67 percent month-on-month in October, continuing on a gradual but steady rebound after flights resumed in May after the lockdown. In scrip specific development, Hero MotoCorp rallied after it announced that the company managed to sell around 14 lakh units of motorcycles and scooters during the 32-day festive season.

The BSE Sensex is currently trading at 44164.21, down by 15.84 points or 0.04% after trading in a range of 43821.39 and 44167.63. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.46%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were Realty up by 1.12%, Capital Goods up by 1.06%, Oil & Gas up by 0.86%, Industrials up by 0.86%, Auto up by 0.74%, while Telecom down by 0.60%, Power down by 0.57%, Bankex down by 0.40%, Utilities down by 0.20%, TECK down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.47%, Larsen & Toubro up by 2.11%, Tata Steel up by 2.07%, Bajaj Finance up by 1.90% and TCS up by 0.94%. On the flip side, Power Grid down by 1.67%, ICICI Bank down by 0.97%, Asian Paints down by 0.97%, HDFC Bank down by 0.95% and Axis Bank down by 0.94% were the top losers.

Meanwhile, former chief economic adviser Arvind Virmani has said that India’s Gross domestic product (GDP) is likely to contract 7.5 percent in the current fiscal (FY21) but will see a double-digit growth in 2021-22. He noted that the central government has come up with some noteworthy reforms, including Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) and setting up of the Monetary Policy Committee (MPC).

Virmani lamented that in 2009, he had written that pending reforms must continue if India wants sustained economic growth but that his advise was not followed. He stated that an increase in marginal income tax rates need to be reversed. He also noted that to decrease capital costs, India needs more financial sector reforms.
He further said ‘we need import substitution policy vis-a-vis China and free trade policy vis-a-vis rest of the world.’ He also said that there is a need to increase India's economic competitiveness so that protectionist policies are required less and less.

The CNX Nifty is currently trading at 12922.95, down by 15.30 points or 0.12% after trading in a range of 12835.60 and 12945.95. There were 27 stocks advancing against 22 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Hero MotoCorp up by 4.15%, Bajaj Finserv up by 3.13%, BPCL up by 2.15%, Tata Steel up by 2.07% and Bajaj Finance up by 2.00%. On the flip side, Coal India down by 4.56%, Power Grid down by 1.62%, UPL down by 1.61%, ICICI Bank down by 1.25% and Axis Bank down by 1.21% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 lost 227.78 points or 0.89% to 25,500.36, Straits Times dropped 10.42 points or 0.37% to 2,778.17, Hang Seng slipped 150.03 points or 0.57% to 26,394.26, Taiwan Weighted declined 55.68 points or 0.40% to 13,717.61 and KOSPI fell 11.65 points or 0.46% to 2,533.99. On other hand, Jakarta Composite soared 28.08 points or 0.51% to 5,585.60 and Shanghai Composite was up by 3.79 points or 0.11% to 3,351.09.