Benchmarks extend downfall in late afternoon session

The Indian equity benchmarks extended their losses in late afternoon session, with the Sensex and the Nifty falling above 200 and 50 points, respectively. Weakness was also visible in the broader indices with the S&P BSE Mid-cap and the S&P BSE Small-cap indices losing over half a percent each in trade. Traders failed to get any sense of relief with WEF report that investment in upskilling has potential to boost the global GDP by $6.5 trillion by 2030, including by $570 billion (over Rs 40 lakh crore) in India alone - the third highest after China and the US. On the sectoral front, Tea industry remained in limelight after rating agency ICRA in its latest report has said that the tea industry may continue to face challenges in the next financial year (FY 2021-22) with hike in wages and its impact on prices, as production returns to normal. It also expects the challenges for the tea industry to remain in 2021-22, after considerable improvement in performance during 2020-21. On the global front, Asian markets were trading mixed rebounding from a sell-off at the end of last week as investors keep tabs on the progress of Joe Biden’s new US economic rescue package. European markets were trading mostly in red amid chatter that there could be tighter border restrictions and extended lockdowns to keep the new COVID-19 variant at bay.

The BSE Sensex is currently trading at 48610.56, down by 267.98 points or 0.55% 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 declined 0.79%, while Small cap index was down by 0.86%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.36%, Basic Materials up by 0.53%, Metal up by 0.41%, Capital Goods up by 0.13% and Bankex was up by 0.12%, while Energy down by 4.08%, Oil & Gas down by 2.07%, Consumer Discretionary down by 0.90%, Power down by 0.84% and PSU was down by 0.84% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.66%, Axis Bank up by 2.11%, Bajaj Auto up by 1.46%, Bajaj Finserv up by 1.39% and Dr. Reddys Lab up by 1.34%. On the flip side, Reliance Industries down by 5.01%, Indusind Bank down by 3.77%, Asian Paints down by 3.25%, HCL Tech down by 2.28% and Power Grid down by 1.75% were the top losers.

Meanwhile, in order to meet the GST compensation shortfall, the Ministry of Finance, Department of Expenditure has released the 13th weekly instalment of Rs 6,000 crore to the states. Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

The amount released this week was the 13th instalment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 5.3083%. So far, an amount of Rs. 78,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7491%.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

The CNX Nifty is currently trading at 14318.60, down by 53.30 points or 0.37% after trading in a range of 14260.25 and 14491.10. There were 24 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 7.70%, Cipla up by 5.05%, UPL up by 3.67%, Hero MotoCorp up by 2.78% and Sun Pharma up by 2.75%. On the flip side, Reliance Industries down by 4.77%, Indusind Bank down by 3.57%, Asian Paints down by 3.20%, Eicher Motors down by 2.81% and Tata Motors down by 2.44% were the top losers.

Asian markets were trading mixed; Hang Seng increased 711.16 points or 2.41% to 30,159.01, Nikkei 225 surged 190.84 points or 0.67% to 28,822.29, KOSPI rose 68.36 points or 2.18% to 3,208.99 and Shanghai Composite was up by 17.49 points or 0.48% to 3,624.24. On the flip side, Straits Times trembled 14.89 points or 0.5% to 2,976.64, Jakarta Composite lost 48.56 points or 0.77% to 6,258.57 and Taiwan Weighted was down by 72.49 points or 0.45% to 15,946.54.

European markets were trading mostly in red, UK’s FTSE 100 decreased 2.81 points or 0.04% to 6,692.26 and France’s CAC was down by 3.85 points or 0.07% to 5,555.72. On the flip side, Germany’s DAX was up by 20.18 points or 0.15% to 13,894.15.