Local equities continue to sink in red

In line with Asian peers, the Indian equity benchmarks continued to show a sluggish trend in afternoon session amid cautiousness on renewed fears of a highly infectious new strain of COVID-19. Weak broader indices along with sell off realty, energy and industrials counters dragged the markets lower. Traders shrugged off economic think-tank NCAER’s mid-year review of the Indian economy, stating that India's Gross Domestic Product (GDP) growth is likely to turn positive at 0.1 per cent in the October-December (Q3) quarter, after witnessing a contraction in the first half of the current financial year. All Asian markets were under pressure as investors weighed the impact of highly infectious new strain of COVID-19 that shut down much of Britain could lead to a slower global economic recovery. Closer home, the market breadth on BSE was negative, out of 2912 stocks traded, 746 stocks advanced, while 2027 stocks declined on the BSE, while 139 stocks remain unchanged.

The BSE Sensex is currently trading at 45179.03, down by 374.93 points or 0.82% after trading in a range of 45140.79 and 45938.40. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.27%, while Small cap index was down by 1.33%.

The top gaining sectoral indices on the BSE were Telecom up by 0.70%, IT up by 0.68%, TECK up by 0.57% and Utilities was up by 0.02%, while Realty down by 2.28%, Energy down by 1.58%, Industrials down by 1.42%, Capital Goods down by 1.34%, Consumer Discretionary was down by 1.29% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.95%, Bharti Airtel up by 1.76%, Power Grid up by 1.48%, HCL Tech up by 1.09% and Infosys was up by 0.68%. On the flip side, Bajaj Finance down by 2.91%, Indusind Bank down by 2.47%, ONGC down by 2.22%, Axis Bank down by 2.05% and Ultratech Cement was down by 1.85% were the top losers.

Meanwhile; rating agency -- Crisil has said corporate profits rose 15 per cent to touch an all-time high in the September quarter as margins widened on softer input costs and better utilistaion levels. It said from an absolute perspective, the earnings before interest, tax, depreciation and amortisation (Ebitda) touched an all-time high Rs 1.60 lakh crore in the September quarter, as against Rs 1.02 lakh crore in the preceding June quarter.

It can be noted that the trend of companies' profits growing even as the economy contracts as a result of the pandemic has led some watchers to express concern claiming this is illustrative of widening inequalities.

Crisil, which analysed a sample of 800 listed entities comprising 85 per cent of NSE's market cap in sectors excluding banking and finance and oil and gas, said improving utilisation levels, along with better management of power, fuel and raw material cost by large companies contributed to the handsome profit growth. It said aggregate operating profit margins improved by over 1 per cent despite a rise in raw material cost during the quarter.

The CNX Nifty is currently trading at 13216.80, down by 111.60 points or 0.84% after trading in a range of 13192.90 and 13446.75. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.89%, Bharti Airtel up by 1.46%, Power Grid up by 1.40%, Adani Ports up by 1.20% and HCL Tech was up by 1.03%. On the flip side, Tata Motors down by 3.65%, Bajaj Finance down by 2.87%, Indusind Bank down by 2.71%, ONGC down by 2.11% and Axis Bank was down by 2.06% were the top losers.

All Asian markets were trading lower; Shanghai Composite declined 46.31 points or 1.35% to 3,374.26, Straits Times trembled 37.10 points or 1.3% to 2,809.42, Taiwan Weighted dropped 207.50 points or 1.44% to 14,177.46, Jakarta Composite lost 107.70 points or 1.75% to 6,057.92, KOSPI fell 44.97 points or 1.62% to 2,733.68, Nikkei 225 slipped 278.03 points or 1.04% to 26,436.39 and Hang Seng was down by 274.02 points or 1.04% to 26,032.66.