Benchmarks trade lower in early deals; Nifty below 15,250 mark

Indian equity benchmarks made gap-down opening on Wednesday tracking weakness in global markets. Domestic indices are trading lower with cut of over half a percent each in early deals due to selling in IT, TECK and Bankex stocks. Traders were concerned as India registered 11,795 fresh Covid-19 cases of the coronavirus disease (Covid-19). Active cases in India stand at 137,866, while the caseload tally has risen to 10,937,106. The country continues to be second-most-affected globally, and ranks 17th among worst-hit nations by active cases. Also, there was some cautiousness as Maharashtra chief minister Uddhav Thackeray warned that if Covid-related norms are not followed, the state government will be forced to reimpose a lockdown. However, broader indices were outperforming larger peers with marginal gains. Traders took note of ICRA ratings report that after two consecutive quarters of contraction, India's GDP is set to revert to the growth territory in the October-December 2020 period compared to the year-ago period. It said private consumption and government spending will help the economy post a turnaround during the December quarter and the GDP will grow 0.7 per cent.

On the global front, most of the Asian markets were trading lower following the lackluster cues overnight from Wall Street. Optimism about more fiscal stimulus and the global economic recovery was offset by worries about rising U.S. bond yields and its impact on riskier assets. Overnight, the yield on the benchmark ten-year Treasury note ended the session at its highest closing level in almost a year. The markets in China remain closed for the Lunar New Year holidays.

Back home, NBFCs stocks were in focus with credit rating agency Crisil’s report that stressed assets of non-banking financial services companies (NBFCs) are expected to reach Rs 1.5-1.8 lakh crore, or 6.0-7.5 percent of the asset under management (AUM) by the end of the financial year 2021. In scrip specific development, Nestle India slumped on disappointing quarterly results. on the other hand, Adani Ports and SEZ jumped after it completed the acquisition of 100 percent stake of Dighi Port Limited for Rs705 crore.

The BSE Sensex is currently trading at 51802.25, down by 301.92 points or 0.58% after trading in a range of 51767.44 and 52033.96. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.22%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were Utilities up by 0.82%, Power up by 0.74%, Industrials up by 0.39%, Auto up by 0.30%, PSU up by 0.20%, while IT down by 0.84%, TECK down by 0.66%, Bankex down by 0.58%, FMCG down by 0.57%, Realty down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.50%, Mahindra & Mahindra up by 0.41%, SBI up by 0.34%, NTPC up by 0.25% and Reliance Industries up by 0.18%. On the flip side, Nestle down by 4.19%, ONGC down by 1.64%, TCS down by 1.49%, HDFC down by 1.48% and ICICI Bank down by 1.07% were the top losers.

Meanwhile, ICRA Ratings in its latest report has said that after two consecutive quarters of contraction, India's Gross domestic product (GDP) is set to revert to the growth territory in the October-December 2020 period (Q3FY21) compared to the year-ago period. It also said private consumption and government spending will help the economy post a turnaround during the December quarter and the GDP will grow 0.7 percent. It can be noted that the economic growth has been on a downward spiral for over three years till it went into a contraction mode.

The rating agency has stated that the forecasted growth in Q3 FY21 while undoubtedly mild and uneven is nevertheless welcome as it signifies that the economy has exited the COVID-19 pandemic-induced recession after two tumultuous quarters. It said the revival in central government spending supported the Indian economy's exit from the recession in Q3 FY21 and pointed out that after a decline of 14.2 percent in Q2FY21, the government of India's (GoI's) non-interest revenue expenditure rose by 22.9 percent in Q3 FY21.

According to the report, almost all the non-agricultural lead indicators tracked by the agency recorded a continued, albeit uneven, improvement in volume terms in the December quarter on continued unlocking of the economy, uptick in consumption during the festive season, and central government spending. It also said that most of the tracked indicators rebounded to a growth on a year on year basis in the December quarter although this was on the low base of Q3 FY20, and that aviation was among the outlier which continued to contract.

The CNX Nifty is currently trading at 15225.25, down by 88.20 points or 0.58% after trading in a range of 15213.35 and 15289.90. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 3.06%, Hero MotoCorp up by 2.36%, GAIL India up by 1.58%, HDFC Life Insurance up by 1.24% and Bajaj Auto up by 1.14%. On the flip side, Nestle down by 4.49%, BPCL down by 2.86%, TCS down by 1.71%, HDFC down by 1.54% and ONGC down by 1.35% were the top losers.

Asian markets were trading mostly in red; NIKKEI 225 fell 139.40 points or 0.46% to 30,328.35, Straits Times lost 14.59 points or 0.50% to 2,920.75, KOSPI slipped 34.14 points or 1.08% to 3,129.11 and Jakarta Composite was down by 17.43 points or 0.28% to 6,274.97. On the other hand, Hang Seng rose 126.73 points or 0.41% to 30,873.39 and Taiwan Weighted jumped 586.10 points or 3.71% to 16,388.50.