Indian bourses enlarge losses in morning deals

Key benchmark indices enlarged losses to continue weak trade in morning deals on account of selling in frontline counters amid a negative trend in global markets. The sentiments remained down-beat with Moody's Investors Service stating that loans to retail customers, especially those to low-income borrowers, will remain most affected due to the shock caused by the coronavirus pandemic. Traders were taking cautious bet ahead of gross domestic product (GDP) growth estimates for the third quarter (October-December) 2020-21. Traders also took a note of WTO review report stated that India's trade policy had remained largely unchanged since the previous review (in 2015), with continued heavy reliance on instruments such as the tariff, export taxes, minimum import prices, import and export restrictions, and licensing. On customs duties, it said, concerns were expressed with respect to its complexity and uncertainty, the increase in tariff rates, tariff preferences and tariff concessions.

On the global front, Asian markets were trading lower after Wall Street's main indexes tumbled, with technology-related stocks under pressure following a steep rise in benchmark U.S. Treasury yields. Back home, on the sectoral front, auto component industry’s stocks remained in focus with Automotive Component Manufacturers Association of India (ACMA) stating that the domestic auto component industry is expected to log in double-digit growth next fiscal, as demand picks up month on month after a prolonged period of downturn. 

The BSE Sensex is currently trading at 49979.52, down by 1059.79 points or 2.08% after trading in a range of 49902.52 and 50400.31. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.91%, while Small cap index was down by 0.47%.

The only gaining sectoral indices on the BSE were Healthcare up by 0.44% and Power up by 0.19%, while Bankex down by 3.37%, Energy down by 1.62%, Realty down by 1.52%, Auto down by 1.34% and Oil & Gas down by 1.32% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.16%, Sun Pharma up by 1.15%, Maruti Suzuki up by 0.91%, Dr. Reddys Lab up by 0.90% and Ultratech Cement up by 0.19%. On the flip side, Indusind Bank down by 4.17%, HDFC Bank down by 3.81%, HDFC down by 3.72%, ICICI Bank down by 3.72% and Axis Bank down by 3.56% were the top losers.

Meanwhile, Automotive Component Manufacturers Association of India (ACMA) has said the domestic auto component industry is expected to log in double-digit growth next fiscal, as demand picks up month on month after a prolonged period of downturn. ACMA President Deepak Jain said the next financial year is going to be a year of rebound for the Indian automotive industry. However, he noted that the industry remains cautiously optimistic about immediate future prospects as headwinds like high commodity prices, shortage of semiconductors and shortage of containers and increasing freight costs could impede growth.

He, while thanking the government for its initiatives like supply side interventions and change in definition of the MSME sector, said the industry as a whole was tested hard last year owing to the COVID-19 pandemic. He noted that the vision of an Atmanirbhar Bharat enshrined in the recently announced Union Budget, coupled with the nation-first thinking would act as the bedrock to propel the industry forward. Further, he mentioned announcements with regards to increased spend on road infrastructure, voluntary scrappage policy, research and development, and the production-linked incentive scheme, among others, augur well for the automotive sector.

Besides, he added continued focus on building rural and agricultural infrastructure and prioritising agriculture credit growth would have long-term positive impact on rural demand for vehicles. He said ‘It is heartening that the budget outlay for the MSME (micro, small and medium enterprises) sector has been doubled compared to last year. The auto component industry is dominated by MSME and this will provide them the necessary succour as the industry recovers.’ He mentioned the auto component industry is confident that all these measures will pave the way for an Atmanirbhar automotive supply chain in India with sustainable growth.

The CNX Nifty is currently trading at 14794.25, down by 303.10 points or 2.01% after trading in a range of 14775.85 and 14919.45. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.22%, Maruti Suzuki up by 1.08%, NTPC up by 0.97%, Dr. Reddys Lab up by 0.81% and Cipla up by 0.67%. On the flip side, Indusind Bank down by 4.48%, ICICI Bank down by 3.81%, Axis Bank down by 3.74%, HDFC Bank down by 3.72% and HDFC down by 3.67% were the top losers.

Asian markets were trading lower; Nikkei 225 slipped 959.35 points or 3.18% to 29,208.92, Hang Seng decreased 731.68 points or 2.43% to 29,342.49, Taiwan Weighted dropped 415.39 points or 2.52% to 16,036.79, Jakarta Composite lost 83.65 points or 1.33% to 6,206.00, KOSPI fell 101.05 points or 3.26% to 2,998.64, Straits Times trembled 29.07 points or 0.98% to 2,944.47 and Shanghai Composite declined 65.96 points or 1.84% to 3,519.09.