Benchmarks continue lackluster trade in morning deals

Indian equity benchmarks continued their lackluster trade in morning deals, tracking losses in Metal, Auto and Healthcare stocks amid negative cues from global markets. Some concern came with report that PE/VC investments in January 2021 reported a 35 per cent drop to $1.6 billion from $2.5 billion, a year ago. The number of deals reported also remained flat at 80. Traders took a note of Finance Minister Nirmala Sitharaman’s statement that India’s inflation target band of 2-6 per cent is up for review as the five-year term for the Monetary Policy Committee’s (MPC’s) inflation-targeting framework draws to a close. On the sectoral front, aviation industry stocks were in focus with the monthly traffic data released by the aviation regulator, DGCA showing that India's domestic air passenger traffic declined around 40 per cent to 7.7 million in January 2021 over the year-ago period as the pandemic continues to hit air travel demand. On the global front, Asian markets were trading mostly in red as a report that showed initial jobless claims rose more than expected stoked concerns about the fragile economic recovery. Worries about inflation also weighed on the market.

The BSE Sensex is currently trading at 51415.37, up by 90.68 points or 0.18% after trading in a range of 51039.97 and 51432.99. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Energy up by 1.22%, Telecom up by 0.99%, Capital Goods up by 0.54%, Industrials up by 0.54% and Oil & Gas up by 0.35%, while Metal down by 0.75%, Auto down by 0.65%, Healthcare down by 0.62%, IT down by 0.61% and TECK down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.25%, Indusind Bank up by 2.20%, Reliance Industries up by 1.59%, Hindustan Unilever up by 1.28% and Larsen & Toubro up by 1.23%. On the flip side, Power Grid Corporation. down by 2.30%, Bajaj Auto down by 1.67%, ICICI Bank down by 1.56%, Asian Paints down by 1.24% and Dr. Reddys Lab down by 1.00% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said India’s inflation target band of 2 percent- 6 percent is up for review as the five-year term for the current monetary policy framework draws to a close. The band, on the basis of which monetary policy is decided by a six-member committee headed by the central bank governor, was established in 2016. She said ‘monetary policy committee’s term is coming to an end. Inflation targeting will also have to be reviewed. We shall do that.’

Since coming to power in 2014, Prime Minister Narendra Modi’s government has been able to tame inflation to the given range in the framework. Before the monetary policy framework came into existence India’s inflation was high and volatile driven by fuel and food prices. But during the coronavirus pandemic inflation rose significantly while the economy crashed, creating major challenges for the Modi government that was formulating policies to provide relief to its 1.4 billion population.

Inflation in Asia’s third largest economy returned toward the Reserve Bank of India’s (RBI) 2 percent-6 percent inflation target range in December after remaining stubbornly above the central bank’s comfort range for eight consecutive months.

The CNX Nifty is currently trading at 15123.20, up by 4.25 points or 0.03% after trading in a range of 15028.70 and 15144.05. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were UPL up by 2.74%, GAIL India up by 2.48%, Bajaj Finserv up by 1.96%, Indusind Bank up by 1.66% and Reliance Industries up by 1.37%. On the flip side, Power Grid Corporation down by 2.47%, Tata Steel down by 2.15%, Bajaj Auto down by 1.75%, Hero MotoCorp down by 1.70% and ICICI Bank down by 1.64% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 76.02 points or 0.46% to 16,348.49, Jakarta Composite lost 24.67 points or 0.4% to 6,175.64, Shanghai Composite declined 11.62 points or 0.32% to 3,663.74, Straits Times trembled 37.22 points or 1.28% to 2,871.63, Nikkei 225 slipped 255.78 points or 0.85% to 29,980.31 and Hang Seng decreased 259.76 points or 0.85% to 30,335.51. On the flip side, KOSPI rose 0.85 points or 0.03% to 3,087.51.