Sluggish trade continues on Dalal Street

In line with Asian peers, the Indian equity benchmarks continued to show a sluggish trend in afternoon session, with Sensex and Nifty trading below their psychological levels of 46,100 and 13550, respectively. Stocks from realty, FMCG and PSU counters were trading lower, while consumer durables, telecom and basic materials counters were supporting the markets. Trade sentiment remained cautious with industry body CII’s statement 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. Traders failed to get any sense of relief as Retail inflation based on the Consumer Price Index (CPI) eased to 6.93 per cent in November on the back of softer food prices, though it remained above the comfort level of the Reserve Bank of India (RBI). Meanwhile, foreign portfolio investors (FPIs) were net buyers in the capital market as they purchased shares worth Rs 2,264.38 crore on a net basis on Monday, according to provisional exchange data.

On the global front, Asian markets were trading mostly lower amid worries about increasing COVID-19 deaths and lockdowns overshadowed optimism about the roll-out of coronavirus vaccinations. Back on street, in scrip specific developments, Majesco jumped as its board has approved payment of interim dividend of Rs 974 per equity share of face value of Rs 5 each for the financial year 2020-21 and KNR Constructions surged as board set to consider bonus issue.

The BSE Sensex is currently trading at 46093.58, down by 159.88 points or 0.35% after trading in a range of 45841.67 and 46287.39. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.22%, while Small cap index down by 0.09%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.00%, Telecom up by 0.18%, Basic Materials up by 0.10%, Auto up by 0.08% and Consumer Discretionary was up by 0.06%, while Realty down by 1.13%, FMCG down by 0.98%, PSU down by 0.87%, Oil & Gas down by 0.83%, Bankex was down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 2.41%, Bajaj Finserv up by 2.40%, Bajaj Finance up by 1.89%, HCL Tech up by 1.37% and Tech Mahindra was up by 1.26%. On the flip side, ICICI Bank down by 1.95%, Hindustan Unilever down by 1.71%, Axis Bank down by 1.53%, SBI down by 1.48% and Nestle was down by 1.40% were the top losers.

Meanwhile, Finance Ministry said that the central government has so far borrowed Rs 42,000 crore since October and released the funds to states to meet Goods and Services Tax (GST) compensation shortfall. The latest instalment of Rs 6,000 crore was released to the states on December 14, 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).

The remaining 5 states -- Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim -- do not have a gap in revenue on account of GST implementation. The Centre had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through this window by the Government of India on behalf of the states and UTs. The borrowings have been done in seven rounds. The amount borrowed so far was released to the states on October 23, November 2, November 9, November 23, December 1, December 7, and December 14, 2020.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the government has also granted additional borrowing permission equivalent to 0.50 per cent of Gross States Domestic Product (GSDP) to the states choosing option-I to meet GST compensation shortfall to help them in mobilizing additional financial resources.

The CNX Nifty is currently trading at 13516.65, down by 41.50 points or 0.31% after trading in a range of 13447.05 and 13548.65. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.01%, Ultratech Cement up by 2.39%, Bajaj Finserv up by 2.35%, Adani Ports up by 2.19% and Shree Cement was up by 1.97%. On the flip side, ICICI Bank down by 1.98%, Hindustan Unilever down by 1.68%, Tata Motors down by 1.63%, SBI down by 1.48% and Axis Bank was down by 1.45% were the top losers.

Asian markets were trading mostly lower, Straits Times trembled 5.41 points or 0.19% to 2,852.73, Nikkei 225 slipped 44.60 points or 0.17% to 26,687.84, Jakarta Composite lost 35.97 points or 0.6% to 5,976.55, KOSPI fell 5.38 points or 0.19% to 2,756.82, Hang Seng decreased 157.88 points or 0.6% to 26,231.64 and Taiwan Weighted was down by 142.53 points or 1% to 14,068.52.

On the flip side, Shanghai Composite was up by 1.95 points or 0.06% to 3,371.07.