Local indices trade flat in morning deals

In a volatile trading session, Indian equity benchmarks were trading flat in morning deals amid weak trend in global equities. Sentiments remained downbeat with the World Bank in its Global Economic Prospects report has stated that India's economy is estimated to contract by 9.6 per cent in the fiscal year 2020-21 (FY21), reflecting a sharp drop in household spending and private investment. Report said that the informal sector, which accounts for four-fifths of employment, has been subject to severe income losses during the COVID-19 pandemic. In India, the pandemic hit the economy at a time when growth was already decelerating. Traders also took note of a Reserve Bank paper stating that an increase in credit may not always find its way towards investments as business entities may use credit lines to finance their current liabilities. However, traders took some support with the Finance Ministry’s report that approval of the long-awaited COVID-19 vaccine provides strength to the optimism on both health and economic fronts, despite continuing surge in global cases and the potential challenge of a mutant strain.

On the global front, Asian markets were trading lower, as investors remained cautious as they awaited the results of two key Senate runoffs in Georgia. The elections will determine how much U.S. President-elect Joe Biden can push through Democrats' agenda, including rewriting the tax code as well as boosting stimulus and infrastructure spending. However, the latest survey from Markit Economics revealed that the services sector in Australia continued to expand in December, and at a faster pace, with a five-month high services PMI score of 57.0. That's up from 55.1 in November and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. The survey also showed that the composite index improved to 55.6 in December from 54.9 in November.

The BSE Sensex is currently trading at 48408.58, down by 29.20 points or 0.06% after trading in a range of 48329.57 and 48616.66. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.70%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Telecom up by 1.69%, PSU up by 1.35%, Consumer Durables up by 1.29%, Utilities up by 1.26% and Metal up by 1.08%, while FMCG down by 0.69%, Energy down by 0.67% and Healthcare down by 0.07% were the some losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.16%, Bharti Airtel up by 2.21%, SBI up by 2.11%, Titan Company up by 1.67% and Tech Mahindra up by 1.40%. On the flip side, ITC down by 1.54%, Reliance Industries down by 1.17%, Hindustan Unilever down by 1.03%, Bajaj Finance down by 0.79% and Ultratech Cement down by 0.52% were the top losers.

Meanwhile, the World Bank in its Global Economic Prospects report has said that India's economy is estimated to contract by 9.6 per cent in the fiscal year 2020-21 (FY21), reflecting a sharp drop in household spending and private investment. Report said that the informal sector, which accounts for four-fifths of employment, has been subject to severe income losses during the COVID-19 pandemic. In India, the pandemic hit the economy at a time when growth was already decelerating.

Further, it stated that in India, growth is expected to recover to 5.4 per cent in 2021, as the rebound from a low base is offset by muted private investment growth given financial sector weaknesses. The informal sector, which accounts for four-fifths of employment, has also been subject to severe income losses during the pandemic. Recent high-frequency data indicate that the services and manufacturing recovery are gaining momentum.

Besides, it said that south Asia is projected to grow by 3.3 per cent in 2021. Weak growth prospects reflect a protracted recovery in incomes and employment, especially in the services sector, limited credit provisioning constrained by financial sector vulnerabilities, and muted fiscal policy support.

The CNX Nifty is currently trading at 14193.35, down by 6.15 points or 0.04% after trading in a range of 14174.70 and 14244.15. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.26%, GAIL India up by 2.86%, Bharti Airtel up by 2.40%, SBI up by 2.06% and Tech Mahindra up by 1.81%. On the flip side, ITC down by 1.63%, Reliance Industries down by 1.17%, Hindustan Unilever down by 1.11%, Bajaj Finance down by 0.94% and Eicher Motors down by 0.70% were the top losers.

Asian markets were trading lower; Nikkei 225 slipped 84.33 points or 0.31% to 27,074.30, Hang Seng decreased 239.31 points or 0.87% to 27,410.55, Straits Times trembled 6.10 points or 0.21% to 2,853.58, KOSPI fell 2.74 points or 0.09% to 2,987.83, Shanghai Composite declined 5.96 points or 0.17% to 3,522.72, Jakarta Composite lost 48.97 points or 0.8% to 6,088.37 and Taiwan Weighted dropped 16.24 points or 0.11% to 14,983.79.