Indian equity markets extend losses in late afternoon session

Indian equities markets were trading near the lowest point of the day in late afternoon session on account of selling in frontline counters. A level of pressure was seen on frontline stocks, especially Axis Bank and Asian Paints. Sentiment on the street weakened even after the Reserve Bank of India (RBI) continued to remain a net buyer of the US currency in November after it bought $10.261 billion from the spot market. During the reporting month, the central bank purchased $14.289 billion and sold $4.028 billion. Sector wise, logistics industry remained in focus with ICRA’s report that pressure on earnings and credit metrics of logistics entities, especially the smaller, unorganised players, is expected to continue over the near-term. However, it said growth over the medium-term is expected to gain momentum. On the global front, all Asian markets were trading lower after a resurgence of coronavirus infections in China and a rise in cases in Southeast Asia. European markets were trading lower hit by tighter travel restrictions in the euro zone and weak UK retail sales numbers, while investors awaited the latest batch of business activity data to gauge the pace of recovery from the coronavirus crisis.

The BSE Sensex is currently trading at 49061.21, down by 563.55 points or 1.14% after trading in a range of 48894.64 and 49676.88. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.15%, while Small cap index was down by 1.10%.

The few gaining sectoral indices on the BSE were Auto up by 2.04%, IT up by 0.37%, TECK up by 0.20% and Consumer Discretionary was up by 0.17%, while Metal down by 3.82%, Realty down by 2.77%, Bankex down by 2.75%, PSU down by 2.22% and Basic Materials was down by 1.95% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 10.22%, Hindustan Unilever up by 1.90%, TCS up by 1.14%, Infosys up by 0.65% and Bajaj Finserv up by 0.38%. On the flip side, Axis Bank down by 4.96%, Asian Paints down by 4.11%, ICICI Bank down by 3.41%, SBI down by 3.19% and NTPC down by 2.65% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the major focus of the government to revive the COVID-19 battered economy has till now been on the supply side, but it is high time to change gears and focus on the demand side as well, lest the ongoing recovery begins to lose steam.

As per the agency, the absence of adequate demand may jeopardise the recovery and may even lead to a second-round impact. Even if the supply side gets restored on account of the various measures announced by the government/the Reserve Bank of India (RBI), it may soon run into difficulty due to the lack of adequate demand for goods and services.

On the economic front, Ind-Ra said that the economy has lately shown some green shoots, and several high frequency indicators are reaching the pre-COVID level of production, bolstered by a combination of festive season/pent-up demand. However, the rating agency noted that after two consecutive months of positive growth, a contraction in factory output (Index of Industrial Production) in November 2020 shows the fragility of the ongoing recovery. An appropriate demand-side measure therefore is as important as supply-side measures.

The CNX Nifty is currently trading at 14425.30, down by 165.05 points or 1.13% after trading in a range of 14371.15 and 14619.90. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 10.55%, Hero MotoCorp up by 5.09%, Eicher Motors up by 2.09%, Hindustan Unilever up by 2.00% and TCS up by 1.14%. On the flip side, Axis Bank down by 5.20%, JSW Steel down by 4.28%, Hindalco down by 4.28%, Asian Paints down by 3.80% and Tata Steel down by 3.63% were the top losers.

All Asian markets were trading lower, Hang Seng decreased 479.91 points or 1.6% to 29,447.85, Taiwan Weighted dropped 134.74 points or 0.83% to 16,019.03, Nikkei 225 slipped 125.41 points or 0.44% to 28,631.45, Jakarta Composite lost 106.76 points or 1.66% to 6,307.13, Straits Times trembled 32.49 points or 1.08% to 2,984.66, KOSPI fell 20.21 points or 0.64% to 3,140.63 and Shanghai Composite was down by 14.51 points or 0.4% to 3,606.75.

European markets were trading lower, UK’s FTSE 100 decreased 36.29 points or 0.54% to 6,679.13, France’s CAC decreased 55.39 points or 0.99% to 5,535.40 and Germany’s DAX was down by 122.09 points or 0.88% to 13,784.58.