Markets trade slightly lower in early deals after positive start

Indian equity benchmarks made positive start on Wednesday but failed to hold on the gains. Markets slipped below neutral lines in early deals and are trading lower with marginal cut. Selling in PSU, Metal and Healthcare stocks weighted down on the indices whereas buying in IT, Realty and TECK counters limit the downside. Traders tuned cautious as India witnessed a slight rise in fresh Covid cases with 20,529 cases. India's caseload now stands at 10,245,326. India had reported six cases of new coronavirus variant. But the government said the existing vaccines for Covid-19 will protect against the new variants as there is no evidence to prove otherwise. Meanwhile, the government approved the 15th tranche of electoral bonds which will be open for sale between January 1 and January 10.

Most of the Asian markets were trading higher despite the negative cues from Wall Street amid uncertainty about whether the US Senate would approve a measure increasing the size of the stimulus checks to $2,000. The start of COVID-19 vaccination drives in several countries and the passage of U.S. fiscal stimulus raised hopes for a global economic recovery next year.

Back home, banking and financial stocks were in focus after the RBI in a report said that India’s financial sector should brace for challenging times ahead with an increased risk of deterioration in asset quality and lower demand for loans. in scrip specific development, Vedanta trade under pressure with report that promoters of Vedanta have pledged their holding in the company to raise $1.4 billion, mostly for repaying the debt that was coming up for maturity.

The BSE Sensex is currently trading at 47580.50, down by 32.58 points or 0.07% after trading in a range of 47462.03 and 47807.85. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were IT up by 0.25%, Realty up by 0.18%, TECK up by 0.18%, Consumer Disc up by 0.15%, Auto up by 0.13%, while PSU down by 0.39%, Metal down by 0.34%, Healthcare down by 0.34%, Telecom down by 0.30%, Consumer Durables down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.35%, HCL Technologies up by 0.87%, Kotak Mahindra Bank up by 0.74%, ONGC up by 0.54% and Mahindra & Mahindra up by 0.33%. On the flip side, SBI down by 1.12%, Indusind Bank down by 1.06%, HDFC down by 0.58%, Axis Bank down by 0.52% and Sun Pharma down by 0.44% were the top losers.

Meanwhile, former RBI Governor Duvvuri Subbarao Rao has said that though Covid -19 and the subsequent lockdown left a trail of economic devastation on most countries, India can potentially build upon three positive aspects- push in the rural economy, stronger federalism and a huge consumption base. He said ‘the challenge for the government in the months and years ahead is clear: to put the economy back on a healthy growth trajectory and ensure that growth is inclusive, with lower income households too enjoying the benefits of rapid growth.’

Subbarao has stated that the expanded MNREGA provided a lifeline when most needed, and the frontloaded transfer payments to women, pensioners and farmers have put money in the hands of households and have helped revive demand. The brisk procurement by the FCI (Food Corporation of India) has buttressed farmers’ incomes while it helped the government extend the food security programme until end November.

Stating that the Indian economy was already in a troubled shape even before the Covid -19 crisis, the former RBI Governor said a ‘V’ shaped recovery in the growth rate does not mean a ‘V’ shaped recovery in absolute output and the level of output in 2021-22 will be lower than what the country achieved in 2019-20. The book is expected to be released shortly.

The CNX Nifty is currently trading at 13927.30, down by 5.30 points or 0.04% after trading in a range of 13886.75 and 13982.90. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.21%, Tech Mahindra up by 1.16%, Kotak Mahindra Bank up by 0.84%, HCL Technologies up by 0.72% and Coal India up by 0.70%. On the flip side, Indusind Bank down by 1.14%, SBI down by 1.10%, Hindalco down by 0.91%, Grasim Industries down by 0.87% and Cipla down by 0.83% were the top losers.

Asian markets were trading mostly in green; Straits Times rose 15.39 points or 0.54% to 2,863.53, Hang Seng jumped 348.83 points or 1.31% to 26,917.32, Taiwan Weighted surged 99.57 points or 0.69% to 14,571.62, KOSPI gained 30.61 points or 1.09% to 2,851.12 and Shanghai Composite was up by 30.44 points or 0.90% to 3,409.48. On other hand, Nikkei 225 fell 116.49 points or 0.42% to 27,451.66 and Jakarta Composite slipped 31.30 points or 0.52% to 6,004.87.