Local indices continue to trade on bearish note in morning deals

Indian equity benchmarks continued to trade on a bearish note in morning deals, as losses in Utilities, Oil & Gas, Realty and FMCG stocks weighed on the markets. Sentiments remained down-beat with industry body CII stating that the current agitation by farmers has led to supply chain disruptions, which will impact the economy in the coming days and may impinge upon the ongoing recovery from the economic contraction due to COVID-19. Trades overlooked rating agency CRISIL’s report in which it has projected a slower contraction of 7.7% for the Indian economy in the ongoing fiscal, compared to the 9% forecast in September on the back of faster-than-expected recovery in the second quarter, but called for more fiscal measures to sustain it.  Meanwhile, the Finance Ministry said the Centre has so far borrowed Rs 42,000 crore since October and released the funds to states to meet GST compensation shortfall. The latest instalment of Rs 6,000 crore was released to the states, out of which Rs 5,516.60 crore has been released to 23 states and Rs 483.40 crore has been released to 3 Union Territories (UT) with legislative assemblies (Delhi, Jammu and Kashmir, and Puducherry).

On the global front, Asian markets were trading lower, following the mixed cues from Wall Street as optimism about coronavirus vaccines was offset by concerns about the impact of new lockdown measures due to the surging coronavirus cases in the U.S. Back home, on the sectoral front, there was some reaction in steel sector’s stocks as ratings agency -- Icra has upgraded its outlook for the Indian steel sector to stable from negative 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 45949.78, down by 303.68 points or 0.66% after trading in a range of 45869.86 and 46287.39. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.72%, while Small cap index down by 0.57%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.53%, Auto up by 0.18%, Healthcare up by 0.01%, while PSU down by 1.67%, Utilities down by 1.44%, Oil & Gas down by 1.42%, Realty down by 1.42%, FMCG down by 1.33% were the losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.05%, HCL Tech. up by 0.81%, Bajaj Auto up by 0.79%, Mahindra & Mahindra up by 0.54% and Maruti Suzuki up by 0.47%. On the flip side, ONGC down by 2.02%, SBI down by 1.91%, Axis Bank down by 1.84%, Larsen & Toubro down by 1.83% and ITC down by 1.76% were the top losers.

Meanwhile, Ratings agency -- Icra has upgraded its outlook for the Indian steel sector to stable from negative 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. This is result of a combination of factors like a strong retail demand emanating from a thriving rural economy, and green shoots of recovery in white goods and the automobile sector, especially from tractors, passenger vehicles and two-wheelers.

It mentioned the momentum has strengthened further in December quarter. The cumulative domestic steel demand in October-November has already surpassed the pre-COVID-19 levels. Consequently, Icra is revising its 2020-21 steel demand forecast to a contraction of around 12 per cent, compared to initial forecast of 23 per cent contraction made in April 2020.

Besides, on production, Icra said the share of top six steel producers in total crude steel production, which remained at about 55 per cent historically, has also risen to about 65 per cent in recent months. It further said domestic hot-rolled coil (HRC) prices have been revised upwards multiple times in recent months and are ruling at a multi-year high level of Rs 49,000 a tonne. It said the price hikes have been supported by improving demand from the automobile and white goods sectors, rising international prices and a cost push in the form of higher domestic iron ore prices.

The CNX Nifty is currently trading at 13481.40, down by 76.75 points or 0.57% after trading in a range of 13451.30 and 13548.65. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.55%, Shree Cement up by 1.63%, Ultratech Cement up by 1.44%, Wipro up by 1.22% and HCL Technologies up by 1.05%. On the flip side, Tata Motors down by 2.03%, Larsen & Toubro down by 1.96%, Axis Bank down by 1.88%, SBI down by 1.79% and ITC down by 1.69% were the top losers.

Asian markets were trading lower; Nikkei 225 slipped 110.72 points or 0.41% to 26,621.72, Jakarta Composite lost 31.49 points or 0.52% to 5,981.03, Straits Times trembled 10.93 points or 0.38% to 2,847.21, Shanghai Composite declined 15.10 points or 0.45% to 3,354.02, KOSPI fell 23.94 points or 0.87% to 2,738.26, Taiwan Weighted dropped 140.54 points or 0.99% to 14,070.51 and Hang Seng decreased 217.53 points or 0.82% to 26,171.99.