Key indices continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, with mixed global cues and caution ahead of the upcoming Budget keeping investors nervous. Sentiments remained down-beat with the latest round of FICCI's Economic Outlook Survey stated that India's gross domestic product (GDP) is expected to contract by 8 per cent in current financial year (FY21). The annual median growth forecast by the industry body is based on responses from leading economists representing industry, banking and financial services sector. Some concern also came with Reserve Bank data showing that overseas investment by domestic firms fell by over 42 per cent to $1.45 billion in December 2020. In the year-ago period, companies in India had invested $2.51 billion in their foreign firms (joint ventures / wholly-owned units). Market participants also took a note of IMF Chief Kristalina Georgieva's statement that all hands are needed on deck, be it businesses, governments or even central banks, for a sustainable and balanced recovery. On the global front, Asian markets were trading mixed, as investors remained cautious amid mixed earnings results from major companies and as they looked ahead to the U.S. Federal Reserve's monetary policy decision due later in the day.

The BSE Sensex is currently trading at 47945.98, down by 401.61 points or 0.83% after trading in a range of 47932.85 and 48387.25. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.49%, while Small cap index was down by 0.15%.

The top gaining sectoral indices on the BSE were IT up by 0.45%, TECK up by 0.24% and FMCG up by 0.04%, while Energy down by 1.64%, Metal down by 1.30%, Oil & Gas down by 1.24%, Realty down by 1.09% and Bankex down by 1.03% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.69%, Tech Mahindra up by 1.59%, Ultratech Cement up by 1.58%, ITC up by 1.42% and HCL Technologies up by 0.93%. On the flip side, Reliance Industries down by 1.91%, Hindustan Unilever down by 1.78%, Sun Pharma Inds. down by 1.76%, Bajaj Finance down by 1.56% and Dr. Reddys Lab down by 1.51% were the top losers.

Meanwhile, the International Monetary Fund (IMF) has projected an impressive 11.5 percent growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth in 2021, amidst the coronavirus pandemic. China is next with 8.1% growth in 2021 followed by Spain (5.9%) and France (5.5%).

Revising its figures, the IMF said that the Indian economy is estimated to have contracted by 8% in 2020 due to the pandemic. China is the only major country which registered a positive growth rate of 2.3% in 2020. India’s economy is projected to grow by 6.8% in 2022 and that of China by 5.6%. With the latest projections, India regains the tag of the fastest developing economies of the world.

Early, IMF Managing Director Kristalina Georgieva had said that India actually has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it. She also said that India went for a very dramatic lockdown for a country of this size of population with people clustered so closely together. And then India moved to more targeted restrictions and lockdowns. Commending the steps being taken by the Indian government on the monetary policy and the fiscal policy side, she said it is actually slightly above the average for emerging markets.

The CNX Nifty is currently trading at 14116.30, down by 122.60 points or 0.86% after trading in a range of 14111.95 and 14237.95. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Wipro up by 3.60%, Grasim Industries up by 2.15%, ITC up by 1.73%, Tech Mahindra up by 1.64% and Ultratech Cement up by 1.52%. On the flip side, Indian Oil Corp. down by 3.21%, Tata Motors down by 2.63%, Hindalco down by 2.46%, Reliance Industries down by 2.12% and GAIL India down by 1.99% were the top losers.

Asian markets were trading mixed, Nikkei 225 surged 64.78 points or 0.23% to 28,610.96, Hang Seng increased 62.76 points or 0.21% to 29,454.02, Taiwan Weighted strengthened 36.53 points or 0.23% to 15,695.38, Straits Times advanced 10.22 points or 0.35% to 2,955.74.On the other side, Shanghai Composite declined 1.03 points or 0.03% to 3,568.40, KOSPI fell 2.53 points or 0.08% to 3,137.78 and Jakarta Composite was down by 48.37 points or 0.79% to 6,091.80.