Benchmarks trade flat in early deals

Indian equity benchmarks made slightly positive start on Monday but soon slipped below natural lines. Markets were struggling for direction and are trading flat in early deals. Buying in Metal, Basic Materials and Telecom stocks are supporting the indices whereas selling in Capital Goods, FMCG and Healthcare counters limiting the gains. Some support came in with report that retail inflation for farm workers and rural labourers eased to 2.17 per cent and 3.25 per cent in January, mainly due to lower prices of certain food items. Besides, continuing their buying spree, foreign portfolio investors (FPIs) invested Rs 24,965 crore in Indian markets in February so far as various organisations predicted high economic growth for the country and the Union Budget boosted investors’ sentiment. However, rising Covid cases remain a concern in the markets. India reported 14,264 new Covid-19 cases with Maharashtra as the worst hit, following which the government there banned political, religious and social gatherings and imposed a new lockdown in some areas. Meanwhile Maharashtra Chief Minister Uddhav Thackeray said that a strict lockdown could be implemented in the state and Mumbai if people don't follow discipline. Thackeray said that imposing a lockdown is necessary to cut the chain of the COVID-19 infection and added that districts have been told to impose restrictions as required from February 22.

Global cues remained supportive with most of the Asian markets trading higher as hopes for a recovery from the coronavirus pandemic with the global rollout of vaccines were countered by worries about inflation and continuing economic damage. Investors remain focused on the future of global economies badly hit by COVID-19 and when and whether there will be enough stimulus to fix it. Back home, aviation stocks were in focus as Minister of State for Civil Aviation Minister Hardeep Singh Puri said that with domestic air traffic expected to increase further in the coming summer season, the government may remove the fare band besides lifting other restrictions. In scrip specific development, Karnataka Bank was under pressure as it reported to the RBI a fraud of about Rs 34.16 crore in credit facilities extended to IL&FS Transportation Networks, which is a dud account now.

The BSE Sensex is currently trading at 50859.02, down by 30.74 points or 0.06% after trading in a range of 50685.42 and 50986.03. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.21%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Metal up by 2.42%, Basic Materials up by 1.24%, Telecom up by 0.60%, Oil & Gas up by 0.47%, Bankex up by 0.41%, while Capital Goods down by 0.60%, FMCG down by 0.46%, Healthcare down by 0.43%, Consumer Durables down by 0.37%, Auto down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.28%, HDFC Bank up by 1.76%, Infosys up by 0.66%, Asian Paints up by 0.60% and ICICI Bank up by 0.49%. On the flip side, ITC down by 2.52%, Larsen & Toubro down by 1.60%, Mahindra & Mahindra down by 1.58%, HDFC down by 1.03% and Dr. Reddy’s Lab down by 0.96% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that the Union Budget 2021-22 is about the role of government as a facilitator and the private sector as a key driver of economic growth, without which the country would be losing a big opportunity. She said 'the most important component or input required here is the participation of the private sector'. She noted that unless the private sector is energized enough unless it is facilitated enough, India is just losing a very big opportunity.

Sitharaman underlined that the nation's growing and aspiring needs and demands across the various sectors cannot be served just by the state government and central governments put together. She pointed out that the stimulus package, which largely depended on the government's borrowing, was aimed at sectors that provided the multiplying effect such as infrastructure, the budget funding, where public expenditure was going to be undertaken.

Observing that the Centre has clearly funded stimulus with the borrowed money, the minister said the government was aware of fiscal management. She also stated that debt to GDP, another indicators which are important for a healthy economy, has to be carefully managed in such a way that sooner in a sense, in a reasonable time frame, the fiscal deficit will also be kept under the healthy level and not let unattended for decades together.

The CNX Nifty is currently trading at 14985.95, up by 4.20 points or 0.03% after trading in a range of 14923.50 and 15010.10. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.29%, JSW Steel up by 3.37%, Tata Steel up by 2.92%, ONGC up by 2.52% and HDFC Bank up by 1.83%. On the flip side, ITC down by 2.92%, Mahindra & Mahindra down by 1.97%, Larsen & Toubro down by 1.67%, Coal India down by 1.47% and Eicher Motors down by 1.30% were the top losers.

Asian markets were trading mostly in green; Nikkei surged 238.69 points or 0.80% to 30,256.61, Straits Times rose 7.37 points or 0.26% to 2,888.01, Hang Seng gained 142.05 points or 0.46% to 30,786.78, Taiwan Weighted jumped 115.38 points or 0.71% to 16,456.76, KOSPI added 3.06 points or 0.10% to 3,110.68, and Jakarta Composite soared 58.26 points or 0.93% to 6,290.19, while Shanghai Composite was down by 2.29 points or 0.06% to 3,693.88.