Markets remain volatile in late morning deals

Indian equity benchmarks remained volatile in late morning deals, with both Sensex and Nifty altering between green and red terrain. Mixed cues from other Asian markets impacted sentiments over the Dalal Street. However, downside remained capped, after the UN has said that foreign Direct Investment into India rose by 13 per cent in 2020, boosted by interest in the digital sector, and while fund flows '’declined most strongly'’ in major economies such as the UK, the US and Russia due to the COVID-19 pandemic, India and China ‘bucked the trend’. An ‘investment trends monitor’ issued by the United Nations Conference on Trade and Development (UNCTAD) on Sunday said that global foreign direct investment (FDI) collapsed in 2020 by 42 per cent to an estimated USD 859 billion from USD 1.5 trillion in 2019.

On the global front, Asian markets were trading mixed, after the share of Hong Kong businesses expecting their business situation to be worse in the first quarter of the year compared to the final three months of last year was higher than that expecting it to be better. The survey data from the Census and Statistics Department showed that the net balance of business expectations weakened to -17 from -8 in the fourth quarter. Expectations eroded in all of the surveyed sectors and businesses expect their situation to be worse on balance in the first quarter versus the previous three months.

The BSE Sensex is currently trading at 48749.33, down by 129.21 points or 0.26% after trading in a range of 48512.02 and 49263.15. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.94%, while Small cap index was down by 1.01%.

The top gaining sectoral indices on the BSE were Bankex up by 0.73%, Basic Materials up by 0.47%, Healthcare up by 0.26%, Capital Goods up by 0.17% and Telecom up by 0.05%, while Energy down by 3.80%, Oil & Gas down by 2.22%, PSU down by 1.31%, Power down by 1.22% and Utilities down by 1.22% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.80%, HDFC Bank up by 1.51%, Larsen & Toubro up by 1.44%, Bajaj Finserv up by 1.34% and Ultratech Cement up by 1.31%. On the flip side, Reliance Industries down by 4.52%, ONGC down by 3.07%, HCL Tech down by 2.17%, Power Grid down by 2.16% and Asian Paints down by 1.86% were the top losers.

Meanwhile, former deputy chairman of Planning Commission Montek Singh Ahluwalia said the country's economy, which contracted in the first two quarters of the current fiscal, has started recovering at a gradual pace. The economy contracted by a massive 23.9 per cent in the first quarter and 7.5 per cent in the second quarter on account of the COVID-19 pandemic.

Ahluwalia said ‘we had jumped off a cliff in the first quarter of this financial year because of the lockdown, which was necessitated by the pandemic. The economy is now climbing back. I think it's a gradual recovery but it is a clear recovery.’ Ahluwalia said the manufacturing sector is recovering and has got back to where it was in 2019-20. However, he said the contact industries which include hotels, restaurants, travel, tourism and retail shopping in malls are badly hit and will take some time to return to normalcy.

Further, he said the infrastructure in the country still lags behind and there is an urgent need to increase investment in the sector over the next few quarters. Besides, he said ‘there's no doubt whatsoever for the medium term that the revival of investment in infrastructure is absolutely crucial. Our infrastructure is not up to the mark.’

The CNX Nifty is currently trading at 14350.55, down by 21.35 points or 0.15% after trading in a range of 14260.25 and 14491.10. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 6.99%, UPL up by 3.80%, Cipla up by 3.29%, Axis Bank up by 2.97% and Bajaj Finserv up by 1.69%. On the flip side, Reliance Industries down by 4.43%, Eicher Motors down by 2.61%, ONGC down by 2.59%, Tata Motors down by 2.54% and Asian Paints down by 2.30% were the top losers.

Asian markets were trading mixed; Nikkei surged 93.61 points or 0.33% to 28,725.06, Hang Seng jumped 609.16 points or 2.07% to 30,057.01, KOSPI soared 59.18 points or 1.88% to 3,199.81 and Shanghai Composite was up by 20.26 points or 0.56% to 3,627.01. On the other hand, Straits Times slipped 6.94 points or 0.23% to 2,984.59, Taiwan Weighted declined 109.71 points or 0.68% to 15,909.32 and Jakarta Composite plummeted 97.96 points or 1.55% to 6,209.17.