Benchmarks trade slightly lower after positive start

Indian equity benchmarks made positive start on Friday tracking overnight gains on Wall Street. But, markets failed to hold on to the gains and slipped below natural lines in early deals and are trading lower with marginal cut. Selling in Telecom, Oil & Gas and PSU stocks dragged the indices down. Rising coronavirus cases also dampened sentiments in domestic markets. India reported 26,762 fresh Covid-19 cases pushing the overall tally to 9,977,834, according to Worldometer. The death toll from the deadly infection jumped to 144,829. however, downside  remained capped with report that the Reserve Bank of India will conduct the third auction of state developments loans (SDLs) aggregating Rs 10,000 crore under the Open Market Operations (OMO) on December 23. The RBI had decided to conduct OMOs in SDLs as a special case during the current financial year with an aim to improve liquidity and facilitate efficient pricing. Additionally, Icra pegged the contraction in the economy at 7.8 per cent for 2020-21. Before the GDP numbers for Q2 were out, it had predicted the fall in the economy at 11 per cent. It said improving economic fundamentals, a bright outlook for the rabi season, and the visibility of vaccine availability are expected to strengthen demand.

On the global front, Asian markets are trading mixed despite the record closing highs overnight on Wall Street. Worries about post-Brexit trade talks emerged after a spokesman for British Prime Minister Boris Johnson said it was likely no agreement would be reached unless the European Union's position changed ‘substantially’. The rising number of coronavirus cases in parts of Asia and around the world also weighed on the markets. Back home, gas and infrastructure stocks were in focus with Petroleum Minister Dharmendra Pradhan’s statement that the government has planned a $60-billion investment for creating gas infrastructure in the country till 2024, and gas' share in the energy mix is expected to rise to 15 per cent by 2030. In scrip specific development, Dishman Carbogen dropped amid reports that promoter Adimans Technologies plans to sell close to 69 lakh shares of the company through an offer for sale.

The BSE Sensex is currently trading at 46785.28, down by 105.06 points or 0.22% after trading in a range of 46707.77 and 47026.02. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.71%, while Small cap index was down by 0.85%.

The few gaining sectoral indices on the BSE were IT up by 1.72%, TECK up by 1.35%, Capital Goods up by 0.33%, while Telecom down by 1.17%, Oil & Gas down by 1.11%, PSU down by 0.98%, Realty down by 0.96%, Bankex down by 0.85% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.41%, Infosys up by 2.25%, TCS up by 1.44%, Bajaj Auto up by 0.90% and Nestle up by 0.88%. On the flip side, ONGC down by 2.56%, Indusind Bank down by 2.51%, HDFC Bank down by 1.63%, HDFC down by 1.59% and Bajaj Finance down by 1.44% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report is expecting that the technical recession in the country's economy to end in the fourth quarter of the current fiscal (Q4FY21), limiting the contraction in the Gross domestic product (GDP) to 7.8 percent in the financial year 2021. In the second quarter of financial year 2021, GDP contracted 7.5 percent as against a decline of 23.9 percent in the April-June quarter.

With a steady performance of the agricultural sector and a lagged recovery in the contact-intensive parts of the services sector, the agency forecasts a small contraction of one per cent in the Indian GDP in the third quarter of financial year 2021. It also said healthy procurement and a favourable outlook for the rabi season, as well as greater visibility of an approaching COVID-19 vaccine rollout, will strengthen demand and economic activity in the fourth quarter of financial year 2021.

After the NSO had released the GDP data for the second quarter in financial year 2021, ICRA had projected the GDP contraction in financial year 21 to range between 7-9 per cent. With the updated projections for Q3 and Q4 financial year 2021, it has now pegged GDP contraction in financial year 2021 at 7.8 per cent. It further said that the spending seen during the festive season was driven by pent-up demand, and consumption is yet to fully stabilise in various sectors. It added that while many indicators have displayed growth in the ongoing quarter relative to a weak performance in the same period in FY2020, volumes still remain below FY2019 levels in a number of sectors, highlighting that a full recovery remains somewhat distant.

The CNX Nifty is currently trading at 13696.90, down by 43.80 points or 0.32% after trading in a range of 13683.40 and 13771.45. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 2.68%, Infosys up by 2.37%, TCS up by 1.54%, Wipro up by 1.37% and Dr. Reddy’s Lab up by 1.17%. On the flip side, Indusind Bank down by 2.86%, ONGC down by 2.56%, Tata Motors down by 2.37%, Coal India down by 2.27% and GAIL India down by 1.78% were the top losers.

Asian markets were trading mixed; Nikkei 225 declined 32.38 points or 0.12% to 26,774.29, Straits Times lost 3.00 points or 0.10% to 2,855.02, Hang Seng fell 178.48 points or 0.67% to 26,499.90 and Jakarta Composite was down by 3.79 points or 0.06% to 6,109.59. However, Taiwan Weighted added 15.84 points or 0.11% to 14,274.77, KOSPI gained 6.20 points or 0.22% to 2,776.63 and Shanghai Composite rose 4.44 points or 0.13% to 3,409.31.