Markets trade lower in early deals

Indian equity markets have made negative start and are trading lower with cut of over half percent in early deals on Thursday on sell-off in the global peers. Rising coronavirus cases also impacted the sentiments in the markets. On Wednesday, India reported 26,351 fresh Covid-19 cases. Its case tally now stands at 9,762,326. The country's death toll has mounted to 141,735. With 1,864,348 cases, Maharashtra has the highest number of coronavirus cases, followed by Karnataka 896,563, Andhra Pradesh 873,000, Tamil Nadu 794,020, and Kerala 649,000. Delhi recorded 2,463 fresh Covid-19 cases. NBFCs' stocks  were in focus after the Reserve Bank of India (RBI) come up with a draft circular for declaration of dividend by NBFCs, wherein it has proposed that NBFCs should have at least 15 per cent Capital to Risk Weighted Assets Ratio (CRAR) for the last 3 years, including the accounting year for which it proposes to declare a dividend.

On the global front, Asian markets are trading mostly in red in early deals on Thursday amid dimming prospects for fresh stimulus. Overnight closing on Wall Street was negative. The US markets ended lower on Wednesday following new disagreements on an economic stimulus package amid sell-off in technology shares.

Back home, stock specific development, Shares of Indian Railway Catering and Tourism Corporation (IRCTC) fell as much as 15 per cent after the company said the government will sell up to 20 per cent stake in the company through an offer for sale on Thursday and Friday to raise Rs 4,374 crore. 

The BSE Sensex is currently trading at 45843.37, down by 260.13 points or 0.56% after trading in a range of 45838.80 and 46001.97. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.11%, while Small cap index down by 1.05%.

The losing sectoral indices on the BSE were Basic Materials down by 1.70%, Oil & Gas down by 1.44%, PSU down by 1.34%, Energy down by 1.22% and Metal down by 1.15%, while there were no gainers.

The top gainers on the Sensex were Maruti Suzuki up by 1.24%, Power Grid up by 0.91%, Nestle up by 0.73%, Titan Co up by 0.45% and Larsen & Toubro up by 0.44%. On the flip side, Tata Steel down by 2.21%, Ultratech Cement down by 2.12%, Indusind Bank down by 1.30%, HDFC Bank down by 1.14% and Infosys down by 1.05% were the top losers.

Meanwhile, terming the current 4 percent midpoint on price-rise as a ‘reasonable target’, former Deputy Governor of RBI Viral Acharya has said that revising up inflation bands for the central bank will hurt the poor. He also said India has to devise ways of pushing up growth in a structural manner and not by ‘pump-priming’ measures like easy credit and easy liquidity. It can be noted that revising up the inflation target can help the RBI deliver more rate cuts to address the concerns on growth.

Acharya has stated that fearing inflation to go up higher in the immediate future, the RBI opted for a status quo in rates at recently bi-monthly policy review, the third consecutive time that it has chosen this route despite the GDP in contraction mode. He noted that those pitching for a 6 percent inflation should get into poor man's shoes for a day to see how price rise pinches and finally impacts his consumption.  He said ‘when food and fuel are actually at very very high levels of inflation, not just broadbased inflation which is also high in India at present, actually these people (poor) have to seriously constrain their consumption basket’.

He further said ‘my sense is that unfortunately the story of growth and inflation trade-off in india has become one of the rich and the urban economy, its actually not paying enough attention to ensuring that the basic levels of (poor man's needs).’ It can be noted that the present 4 per cent target with a 2 percentage point leeway on either side is coming to an end in March. He added that the actual inflation has been overshooting for the last few months, leading to the status quo in rates by the RBI, which is disappointing many pro-growth voices.

The CNX Nifty is currently trading at 13432.25, down by 96.85 points or 0.72% after trading in a range of 13431.45 and 13488.50. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.33%, Nestle up by 0.66%, Titan Co up by 0.58%, Divis Lab up by 0.39% and HCL Tech. up by 0.20%. On the flip side, UPL down by 10.00%, Tata Motors down by 2.76%, Indian Oil Corp. down by 2.50%, GAIL India down by 2.29% and ONGC down by 2.19% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 fell 93.30 points or 0.35% to 26,724.64, Straits Times dropped 13.04 points or 0.46% to 2,830.03, Hang Seng lost 128.62 points or 0.49% to 26,374.22 and Taiwan Weighted slipped 0.69 points or 99.59% to 14,290.55. However, KOSPI rose 0.06 points or 1.56% to 2,757.03, Shanghai Composite gained by 8.14 points or 0.24% to 3,380.10 and Jakarta Composite was up by 43.47 points or 0.73% to 5,987.88.