Sensex, Nifty remain in red terrain

Indian equity benchmarks remained in red terrain in late morning session, with both Sensex and Nifty trading below their neutral lines. Sentiments over the street were negative, despite positive cues from other Asian markets. Traders got cautious, after a senior finance ministry official said that India's score on protection of minority investors compiled by the World Bank as part of the Ease of Doing Business rankings has slipped recently and there is a need for stakeholders to improve on this aspect. Additional Secretary Anand Mohan Bajaj said brokers need to look beyond the short-term benefits and look at long-term strategies focused on attracting, retaining and motivating investors in the capital markets, which are very important tool for nation building.

On the global front, Asian markets were trading mostly in green, after Business Confidence in South Korea improved in November, the latest survey from the Bank of Korea showed on Wednesday with an index score of 85.0 - up from 79.0 in October. The outlook for the following month also rose by 5 points to 81. In the non-manufacturing sector, the index on business conditions for November 2020 was 73, up 4 points from the previous month, and that for the outlook for the following month also rose by 3 points to 72. The Economic Sentiment Index for November was 89.1, up 3.2 points from October.

The BSE Sensex is currently trading at 44220.00, down by 303.02 points or 0.68% after trading in a range of 44191.04 and 44825.37. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.29%, while Small cap index was down by 0.89%.

The only gaining sectoral indices on the BSE were PSU up by 0.36%, Energy up by 0.16% and Oil & Gas up by 0.10%, while Capital Goods down by 1.40%, Power down by 1.32%, Healthcare down by 1.31%, Industrials down by 1.24% and Telecom down by 1.23% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 4.54%, ICICI Bank up by 0.83%, Power Grid up by 0.67%, Bajaj Finserv up by 0.53% and Bajaj Auto up by 0.36%. On the flip side, Kotak Mahindra Bank down by 2.18%, Asian Paints down by 2.04%, Sun Pharma down by 1.85%, Bajaj Finance down by 1.83% and Tech Mahindra down by 1.82% were the top losers.

Meanwhile, the ratings agency -- India Ratings and Research (Ind-Ra) in its latest report has stated that India's two-wheeler exports will see sustained growth in the second half of next fiscal (H2FY22) after witnessing temporary hurdles in the first half this year due to COVID-19 and weakened crude oil prices, hurting the economies of key exporting destinations. It added that exports momentum is expected to continue in the remaining part of FY21 and FY22, primarily driven by the exporting countries' lower penetration level, demand for usage as commercial fleet, stability in crude prices, lack of public infrastructure and aversion to public transport amid COVID-19.

As per the report, India exports two-wheelers mainly to African, Asian and Latin American countries, constituting 37.5 per cent, 22.9 per cent and 21.4 per cent, respectively, during the first half of FY21. Within this, Nigeria, Colombia, Nepal, Bangladesh and Philippines together accounted for around 50 per cent of the total exports in FY20 (in terms of value). Indian original equipment manufacturers (OEMs) will continue to gain traction for their key offering on the back of their strong market position and robust distribution network. Indian two-wheeler manufacturers such as Bajaj Auto and TVS Motor Co will benefit from their exports-focused business model, with almost 49 per cent and 26 per cent, respectively, of their total sales volume in the first half of FY21 coming from exports.

However, the agency noted that Indian OEMs face tough competition, particularly from Japanese OEMs that have a strong market share globally. Though Chinese OEMs have a higher market share than Indian OEMs in the global markets, the competition is fragmented and Indian OEMs have superior quality. Ind-Ra said it expects the two-wheeler (2W) exports decline for FY21 to be in line with that of the domestic industry at 18-21 per cent. It added ‘Since 2W exports only account for 16-18 per cent of the total 2W sales for Indian OEMs, this is not likely to be substantial enough to compensate for the domestic volumes during the same period’. 2W export volumes are likely to increase by mid-teens in FY22. The industry faced temporary hiccups in the first quarter of FY21 due to the COVID-19 spread as well as weakened crude oil prices, hurting the economies of key exporting destinations for India.

The CNX Nifty is currently trading at 12981.90, down by 73.25 points or 0.56% after trading in a range of 12962.10 and 13145.85. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were ONGC up by 4.80%, HDFC Life Insurance up by 2.00%, SBI Life Insurance up by 1.84%, GAIL India up by 1.60% and Coal India up by 1.42%. On the flip side, Eicher Motors down by 2.46%, Kotak Mahindra Bank down by 2.35%, Asian Paints down by 2.02%, Sun Pharma down by 1.93% and Bajaj Finance down by 1.89% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 179.55 points or 0.69% to 26,345.14, Hang Seng increased 155.08 points or 0.58% to 26,743.28, Jakarta Composite soared 13.19 points or 0.23% to 5,714.22 and Straits Times advanced 9.14 points or 0.32% to 2,900.77. On the flip side, KOSPI fell 15.41 points or 0.59% to 2,602.35, Shanghai Composite declined 7.49 points or 0.22% to 3,395.33 and Taiwan Weighted dropped 68.19 points or 0.49% to 13,738.94.