Key gauges pare gains in morning deals

Indian equity benchmarks pared most of their initial gains in morning deals, as traders remained on the sideline ahead of the Union Budget and important global events. The government will table the Economic Survey 2020-21 in Parliament on Friday and present the Union Budget 2021-22 on Monday, February 1. Market participants also took a note of IMF's Chief Economist Gita Gopinath stating that it would be damaging for India to start tightening policy support in the midst of the COVID-19 pandemic and also stressed on reducing wasteful expenditures in the upcoming Budget. However, traders took some support with SBI Research’s report stated that with record GST collections expected in January at Rs 1.21-1.23 lakh crore, the shortfall in state GST can be narrowed to a minimal Rs 11,000 crore. Ongoing efforts to plug the leakages in GST collection has been bearing fruit since September. On the sectoral front, Auto stocks were in focus as Siam said automobile industry in India is going through a long-term structural slowdown as the compound annual growth rate (CAGR) across all major vehicle segments has witnessed a decline over the past three decades.

On the global front, Asian markets were trading mostly in red as a liquidity squeeze in China and a Wall Street retail-trading frenzy has unnerved investors. Besides, industrial production in Japan dropped a seasonally adjusted 1.6 percent on month in December. That missed forecasts for a decline of 1.5 percent following the 0.5 percent fall in November. The unemployment rate in Japan was a seasonally adjusted 2.9 percent in December, unchanged from the November reading, but shy of forecasts for 3.0 percent.

The BSE Sensex is currently trading at 46942.00, up by 67.64 points or 0.14% after trading in a range of 46884.92 and 47423.66. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.76%, while Small cap index up by 0.58%.

The top gaining sectoral indices on the BSE were Realty up by 1.23%, Auto up by 0.96%, Industrials up by 0.55%, Metal up by 0.48% and PSU up by 0.46%, while Telecom down by 0.79%, Consumer Durables down by 0.43%, Utilities down by 0.38%, Healthcare down by 0.36% and FMCG down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.95%, Indusind Bank up by 3.91%, Bajaj Finance up by 1.53%, HCL Technologies up by 1.14% and Ultratech Cement up by 0.90%. On the flip side, Maruti Suzuki down by 1.74%, Axis Bank down by 1.47%, Hindustan Unilever down by 1.22%, Titan Company down by 0.99% and NTPC down by 0.98% were the top losers.

Meanwhile, the Society of Indian Automobile Manufacturers (SIAM), in a research conducted by it, has said automobile industry in India is going through a long-term structural slowdown as the compound annual growth rate (CAGR) across all major vehicle segments has witnessed a decline over the past three decades. It said the auto industry has been facing headwinds even before the pandemic derailed the entire sector last year.

It noted the study clearly shows that the pandemic is not the only reason for the auto sector slowdown, which is facing deeper structural issues that need attention. According to the research, which focused on industry growth rates till March 2020, compounded annual growth rates of all segments, including passenger vehicles, commercial vehicles, three-wheelers and two-wheelers have witnessed a continuous drop over the last three decades.

It showed that CAGR of the domestic passenger vehicle industry stood at 12.6 per cent between 1989-90 and 1999-2000. It, however, dropped to 10.3 per cent between 1999-2000 and 2009-10 decade. The growth rate further dropped to 3.6 per cent in the last decade. It further pointed out that contraction in the domestic passenger vehicle segment has been much steeper in the last five years. From a CAGR of 12.9 per cent between 2004-05 and 2009-10, it came down to 5.9 per cent in the 2009-10 to 2014-15 period.

The CNX Nifty is currently trading at 13827.35, up by 9.80 points or 0.07% after trading in a range of 13821.90 and 13966.85. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 4.17%, Indusind Bank up by 3.70%, Tata Motors up by 2.29%, Hero MotoCorp up by 1.73% and BPCL up by 1.48%. On the flip side, Maruti Suzuki down by 2.14%, Axis Bank down by 1.60%, NTPC down by 1.26%, Titan Co down by 1.14% and Hindustan Unilever down by 1.12% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 436.87 points or 1.55% to 27,760.55, Jakarta Composite lost 95.76 points or 1.6% to 5,883.63, Taiwan Weighted dropped 84.22 points or 0.55% to 15,331.66, KOSPI fell 68.62 points or 2.24% to 3,000.43 and Straits Times trembled 1.56 points or 0.05% to 2,918.74.
On the flip side, Shanghai Composite gained 8.19 points or 0.23% to 3,513.37 and Hang Seng increased 101.35 points or 0.35% to 28,652.12.