Markets end in red for third straight day

Indian equity benchmarks ended in red for third straight day, tracking losses in index heavyweights Bajaj Finance, Kotak Mahindra Bank, Mahindra & Mahindra and Nestle amid a weak trend in global markets. That apart, expiry of the weekly F&O contracts also added to the volatility. Markets made flat-to-positive start, as Global forecasting firm Oxford Economics revised India's economic growth projection for 2021 to 10.2 per cent from the earlier 8.8 per cent, citing receding COVID-19 risks and the shift in the monetary policy outlook. It further said the Budget 2021-22 will create positive externalities for the private sector, and forecast slower fiscal consolidation in FY22 than the government projections. Sentiments remained positive with S&P Global Ratings’ report stated that India will be one of the fastest growing emerging market economies with a 10 percent growth in FY22, and future sovereign rating action would hinge on lowering fiscal deficit and sustaining debt burden.

However, key indices erased gains to turn negative in late morning deals, as the government issued new guidelines for international arrivals amid the spread of mutant variants of coronavirus in many countries. The new Standard Operating Procedures (SOPs) will come into effect from 23.59 hours on February 22 till further orders. Market participants paid no heed towards with commerce and Industry Minister Piyush Goyal’s statement that he will engage with the new United States Trade Representative (USTR) for a fresh trade package as both the countries would have to look afresh at different ideas. Meanwhile, a private report stated that India has emerged as Asia's biggest destination for financial technology (fintech) deals, leaving behind China in the quarter ended June 2020.

On the global front, Asian markets ended mostly lower on Thursday as largely upbeat U.S. economic data added to optimism about the economic recovery, but raised concerns about inflation. Separately, the Australian Bureau of Statistics said that the jobless rate in Australia came in at a seasonally adjusted 6.4 percent in January. That was beneath expectations for 6.5 percent and down from 6.6 percent in December. European markets were trading mostly in red as inflation concerns persisted and earnings proved to be a mixed bag. Traders remained focused on the ECB, which is due to release the minutes for its January meeting later in the day. Back home, on the sectoral front, pharma stocks were in focus as India Ratings and Research (Ind-Ra) does not expect Indian pharmaceutical companies to sustain the healthy operating margins reported during 3Q FY21 and 9M FY21. It said the India formulations business grew year-on-year (y-o-y) during 3Q FY21 and 9M FY21 while growth across other segments was lower both on quarter-on-quarter (q-o-q) and y-o-y basis. Besides, select telecom equipment manufacturing stocks were trading in green as the government approved a Rs 12,195 crore production-linked incentive (PLI) scheme for telecom gear manufacturing in India. This move will position the nation as a global powerhouse for production of such equipment ahead of 5G roll-outs.

Finally, the BSE Sensex fell 379.14 points or 0.73% to 51,324.69, while the CNX Nifty was down by 89.95 points or 0.59% to 15,118.95.

The BSE Sensex touched high and low of 51,903.96 and 51,186.68, respectively and there were 11 stocks advancing against 19 stocks declining on the index.   

The broader indices ended in green; the BSE Mid cap index rose 0.69%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 4.22%, Utilities up by 3.87%, PSU up by 3.64%, Power up by 2.79% and Metal up by 1.27%, while Auto down by 1.35%, Bankex down by 1.17%, Finance down by 1.01%, Healthcare down by 0.76% and Telecom down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 8.32%, NTPC up by 4.08%, Asian Paints up by 3.39%, Tech Mahindra up by 2.97% and Power Grid Corporation up by 2.85%. On the flip side, Bajaj Finance down by 2.43%, Kotak Mahindra Bank down by 2.20%, Mahindra & Mahindra down by 2.19%, Nestle down by 2.18% and HDFC down by 2.13% were the top losers.

Meanwhile, S&P Global Ratings in its latest report has said that India will be one of the fastest growing emerging market economies with a 10 percent growth in FY22, and future sovereign rating action would hinge on lowering fiscal deficit and sustaining debt burden. It noted that the forecast for India in 2021 is on stronger side and shows that a lot of economic activity, which was frozen last year, is coming back on line to normalisation thereby brightening the growth prospects, as well as structural strengths of Indian economy coming back to the fore.

S&P said ‘India's contraction this year was steep and may be deeper than global average, but bounce back of 10% that we are expecting next fiscal year will be putting India amongst the fastest growers in 2021 and more importantly we see Indian economy growing at 6% over medium term, may be slightly higher, and that compares very well to EM all around the world.’

It further said India's economy has stabilised over recent months, with progressively better manufacturing, services, labour market, and revenue data. It also said the hard part will be converting these trends into a sustained recovery over the next few years. It added that India has exceeded its fiscal deficit target of 3.5 per cent in the current fiscal by a wide margin due to higher spendings to stimulate economy amid the pandemic.

The CNX Nifty traded in a range of 15,250.75 and 15,078.05 and there were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were ONGC up by 7.58%, GAIL India up by 6.99%, BPCL up by 4.69%, Indian Oil Corporation up by 4.21% and NTPC up by 4.03%. On the flip side, Bajaj Finance down by 2.51%, Tata Motors down by 2.21%, Mahindra & Mahindra down by 2.21%, Kotak Mahindra Bank down by 2.18% and Shree Cement down by 2.08% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 11.71 points or 0.17% to 6,699.19 and France’s CAC fell 5.44 points or 0.09% to 5,760.40, while Germany’s DAX increased 20.92 points or 0.15% to 13,930.19.

Asian markets ended mostly lower on Thursday on profit-taking following concerns about inflation and surging US bond yields. Further, Japanese shares ended lower as doubts on the sustainability of a recent rally above the 30,000 level. Although, US president Joe Biden said the US economy would come roaring back if Congress approved his $1.9 trillion fiscal stimulus plan, as he pledged to deliver widespread corona virus vaccinations and a stronger recovery in the second half of the year. Chinese shares closed higher after traders returned to their desks following the Lunar New Year holidays, with renewed optimism for an acceleration in global growth.