Indices turn negative in late morning deals

Indian equity benchmarks cut all of their gains in late morning deals to turn negative, with both Sensex and Nifty trading below their neutral lines. Domestic sentiments were negative, despite positive cues from other Asian markets. Traders got cautious, as the State Bank of India’s (SBI) Ecowrap report has said India's fiscal deficit in the current financial year (FY21) is likely to reach 7.4 per cent of the GDP on the back of enhanced government expenditure amid the pandemic. The report noted that as per the first advanced estimate of the GDP, real GDP will contract by 7.7 per cent in FY21, and nominal GDP growth is expected at (-) 4.2 per cent. Accordingly, the nominal GDP for FY22 would grow by 15 per cent to Rs 224.04 lakh crore.

On the global front, Asian markets were trading mostly in green, even after a measure of the public assessment of the Japanese economy decreased for the second month in a row in December. The survey data from the Cabinet Office showed that the current conditions index of the Economy Watchers' Survey, which measures the current situation of the economy, decreased to 35.5 in December from 45.6 in November. However, a reading below 50 suggests pessimism. The outlook index that signals future activity rose to 37.1 in December from 36.5 in the previous month. In October, the reading was 49.1.

The BSE Sensex is currently trading at 49467.36, down by 49.75 points or 0.10% after trading in a range of 49420.09 and 49795.19. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.28%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Telecom up by 2.19%, PSU up by 1.31%, Oil & Gas up by 1.17%, FMCG up by 0.82% and Auto up by 0.70%, while Consumer Durables down by 1.08%, Healthcare down by 0.39%, IT down by 0.33%, Consumer discretionary down by 0.12% and Basic Materials down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 4.30%, Bharti Airtel up by 3.25%, NTPC up by 3.04%, ONGC up by 2.61% and ITC up by 2.28%. On the flip side, HDFC down by 1.82%, Titan Co down by 1.32%, TCS down by 1.30%, Bajaj Finance down by 1.11% and Bajaj Finserv down by 1.09% were the top losers.

Meanwhile, the State Bank of India’s (SBI) Ecowrap report has said India's fiscal deficit in the current financial year (FY21) is likely to reach 7.4 per cent of the GDP on the back of enhanced government expenditure amid the pandemic. The report noted that as per the first advanced estimate of the GDP, real GDP will contract by 7.7 per cent in FY21, and nominal GDP growth is expected at (-) 4.2 per cent. Accordingly, the nominal GDP for FY22 would grow by 15 per cent to Rs 224.04 lakh crore.

It mentioned current trends in the GDP for FY21 will translate into Rs 3.2 lakh crore net revenue shortfall for the Centre this fiscal and at the same time, expenditure is higher by around Rs 3.3 lakh crore, thus taking the fiscal deficit to Rs 14.46 lakh crore and with new revised nominal GDP estimate for FY21, it will be around 7.4 per cent of GDP.

For FY22, assuming the government keeps the expenditure growth at 6 per cent over FY21 estimates and overall receipts, excluding borrowing and other liabilities, expected at 25 per cent, it would result in fiscal deficit of around Rs 11.67 lakh crore or 5.2 per cent of GDP.

The CNX Nifty is currently trading at 14556.70, down by 6.75 points or 0.05% after trading in a range of 14546.15 and 14653.35. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.58%, Bharti Airtel up by 3.43%, Indian Oil Corportion up by 3.42%, NTPC up by 3.10% and BPCL up by 2.62%. On the flip side, HDFC down by 1.93%, TCS down by 1.40%, Titan Co down by 1.28%, Divis Lab down by 1.23% and UPL down by 1.14% were the top losers.

Asian markets were trading mostly in green; Nikkei surged 287.60 points or 1.02% to 28,451.94, Straits Times rose 10.89 points or 0.37% to 2,988.06, Taiwan Weighted jumped 232.11 points or 1.50% to 15,732.81, KOSPI advanced 26.23 points or 0.84% to 3,152.18 and Jakarta Composite added 27.04 points or 0.42% to 6,422.71. On the other hand, Hang Seng fell 6.07 points or 0.02% to 28,270.68 and Shanghai Composite was down by 3.01 points or 0.08% to 3,605.33.