Markets trade lower in early deals

Indian equity benchmarks made negative start on Tuesday tracking weakness in global peers. Markets are trading lower with cut of around half a percent each in early deals due to selling in Oil & Gas, Energy and PSU stocks. Some cautiousness prevailed in the markets as India's Covid-19 caseload now stands at 99.06 lakh and the death toll has mounted to 1.43 lakh. Traders overlooked the government data showing that retail Inflation has eased marginally to 6.93% in November due to considerable easing in vegetable prices. Retail inflation had remained above 7 per cent for two month in a row. Meanwhile, as per a report, India has released detailed guidelines for COVID-19 mass vaccination drive that will begin soon. The central government is planning to vaccinate nearly 30 crore people during the first phase of vaccination. Pfizer, Serum Institute of India and Bharat Biotech have applied for market authorisation for their vaccines. The vaccination drive will start once India approves emergency use of COVID-19 vaccine.

Global cues remained sluggish with all the Asian markets were trading lower as optimism about coronavirus vaccines was offset by worries about the impact of new lockdown measures amid the surging coronavirus cases in the US and other parts of the world. While the coronavirus death toll in the U.S. reached 300,000, coronavirus cases are surging in Japan and South Korea. Meanwhile, Germany, London, the Netherlands and the Czech Republic are imposing stricter lockdowns. Back home, metal stocks were in focus as rating agency Icra upgraded its outlook for the Indian steel sector to stable on the back of improving demand and prices. It said the domestic steel sector has witnessed a strong revival in second quarter of 2020-21.

The BSE Sensex is currently trading at 45996.98, down by 256.48 points or 0.55% after trading in a range of 45966.20 and 46287.39. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.35%, while Small cap index was down by 0.38%.

The only gaining sectoral indices on the BSE were Healthcare up by 0.27%, Auto up by 0.03%, while Oil & Gas down by 1.26%, Energy down by 1.19%, PSU down by 1.18%, Metal down by 1.16%, Realty down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 0.94%, Ultratech Cement up by 0.89%, HDFC Bank up by 0.82%, HCL Technologies up by 0.43% and Bajaj Finance up by 0.18%. On the flip side, ONGC down by 2.22%, Axis Bank down by 1.74%, Tata Steel down by 1.37%, Hindustan Unilever down by 1.33% and NTPC down by 1.20% were the top losers.

Meanwhile, Terming lower government spending as a ‘constraint’ for growth, Ratings agency Crisil in its latest report has revised upwards its FY21 Gross domestic product (GDP) contraction estimate to 7.7 percent from the earlier expectation of 9 percent. It noted that a faster-than-expected revival in activity in the second quarter, which continues into the festive season, is one of the reasons for the upward revision. It also said that the coronavirus disease (covid-19) pandemic, which has pushed the economy into contraction mode, will result in a permanent loss of 12 percent in real GDP terms.

According to the report, after its initial expectation of 9.5 percent GDP contraction in FY21, the Reserve Bank revised up its estimate to 7.5 percent earlier this month. It said other analysts have also revised upwards their projections as the unlocking of economy led to higher activities. It also stated that inadequate fiscal spending remains a constraint for economic growth, and pointed out a possible second wave of covid-19 afflictions, uncertainty regarding availability of vaccine, and hiccups in global economic revival due to resurgence of cases as factors which call for caution.

However, the agency said that the GDP will grow by 10 percent in FY22 on a very low base of previous fiscal year. It noted that the newer estimate on a lower contraction has considered a better than expected growth in manufacturing sector in the second quarter, lighter restrictions as people's attitudes shift to learning to live with the virus and a flattening of the infection curve. It has also considered that fiscal policy support, which hitherto remains inadequate to revive demand could be forthcoming.

The CNX Nifty is currently trading at 13502.90, down by 55.25 points or 0.41% after trading in a range of 13478.40 and 13548.65. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.71%, Ultratech Cement up by 1.24%, Shree Cement up by 1.21%, Bajaj Auto up by 1.17% and Dr. Reddy’s Lab up by 1.02%. On the flip side, ONGC down by 1.63%, Axis Bank down by 1.50%, Tata Motors down by 1.49%, IOC down by 1.35% and BPCL down by 1.28% were the top losers.

Asian markets were trading in red; Nikkei 225 declined 91.81 points or 0.34% to 26,640.63, Straits Times plunged 12.13 points or 0.42% to 2,846.01, Hang Seng slipped 183.00 points or 0.69% to 26,206.52, Taiwan Weighted dropped 105.46 points or 0.74% to 14,105.59, KOSPI lost 17.09 points or 0.62% to 2,745.11, Jakarta Composite fell 5.53 points or 0.09% to 6,006.99 and Shanghai Composite was down by 15.10 points or 0.45% to 3,354.02.