Indian equity benchmarks continued to trade under pressure in morning deals, tracking meltdown in global shares due to surge in bond yields overseas. Both Sensex and Nifty were trading below their crucial 50,750 and 15,100 marks, respectively. Market participants took a note of Commerce and Industry Minister Piyush Goyal’s statement that the need of the hour is to reduce logistics cost in the country as India cannot be competitive if this cost remains high. He said the investments in the Sagarmala project will boost the country's maritime infrastructure, expand freight corridors, make freight more cost-effective and bring down the current logistics cost, which is estimated to be about 13-14 percent. Meanwhile, Securities and Exchange Board of India (SEBI) has asked stock exchanges, clearing corporations and depositories to put in place code of conduct and institutional mechanism to prevent fraud or market abuse by them and their designated persons.
On the global front, Asian markets were trading mostly in red as investors are cautious due to renewed concerns over bond yields. The lead from Wall Street was also negative overnight. Back home, on the sectoral front, Construction equipment sector’s stocks were in focus as ICRA revised the outlook on the construction equipment (CE) sector to stable from negative, following strong ramp up in volumes. Heightened focus on infrastructure spend, particularly in the road infrastructure segment has led to a sharp scale up in volumes since July 2020 (20%+ Y-o-Y growth during July-Jan’21 period).
The BSE Sensex is currently trading at 50743.48, down by 701.17 points or 1.36% after trading in a range of 50539.92 and 50957.29. There were 4 stocks advancing against 26 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index was up by 0.62%, while Small cap index up by 0.64%.
The top gaining sectoral indices on the BSE were Power up by 0.79%, Utilities up by 0.73%, Consumer Durables up by 0.32% and Consumer discretionary up by 0.16%, while Bankex down by 2.07%, Metal down by 1.84%, Telecom down by 0.91%, Energy down by 0.82%, Capital Goods down by 0.71% were the top losing indices on BSE.
The top gainers on the Sensex were ONGC up by 0.79%, Dr. Reddys Lab up by 0.12%, Titan Co up by 0.09% and Ultratech Cement up by 0.08%. On the flip side, HDFC down by 3.01%, HDFC Bank down by 2.76%, Axis Bank down by 2.73%, ICICI Bank down by 2.34% and Larsen & Toubro down by 2.24% were the top losers.
Meanwhile, Ratings agency, ICRA has revised the outlook on the Construction Equipment (CE) sector to ‘Stable’ from ‘Negative’, following strong ramp up in volumes. Heightened focus on infrastructure spend, particularly in the road infrastructure segment has led to a sharp scale up in volumes since July 2020 (20%+ Y-o-Y growth during July-Jan’21 period).
It mentioned that the various underlying factors supporting healthy revival in industry volumes over the last few months are sharp increase in the awarding and execution pace of road construction; increased focus on rural infrastructure; strong rural volume off-take for equipment on the back of second consecutive good monsoon; improving demand from railway and mining segments and the regular payment flow from the government to contractors.
Demand has also been supported by steady inflows from the Central government on infrastructure spend, particularly on roads, even though state infrastructure expenditure has been severely curtailed and diverted to the pandemic management. ICRA, Vice President & Sector Head, Pavethra Ponniah said following a sharp correction in unit sales in Q1 FY2021, CE OEM volumes have recovered sharply since, supporting industry credit profile. Raw material price hikes, particularly for steel, has however had an impact on profit margins. OEMs have and are expected to take further price hikes to pass on these cost pressures.
The CNX Nifty is currently trading at 15058.90, down by 186.70 points or 1.22% after trading in a range of 14980.20 and 15101.05. There were 12 stocks advancing against 38 stocks declining on the index.
The top gainers on Nifty were Adani Ports &SEZ up by 2.25%, SBI Life Insurance up by 1.37%, UPL up by 0.88%, Grasim Industries up by 0.77% and ONGC up by 0.70%. On the flip side, HDFC down by 2.96%, JSW Steel down by 2.74%, HDFC Bank down by 2.73%, Axis Bank down by 2.63% and Tata Steel down by 2.41% were the top losers.
Asian markets were trading mostly in red; Taiwan Weighted dropped 278.10 points or 1.72% to 15,933.63, KOSPI fell 38.64 points or 1.25% to 3,044.35, Jakarta Composite lost 87.53 points or 1.37% to 6,289.23, Shanghai Composite declined 56.66 points or 1.58% to 3,520.24, Hang Seng decreased 762.12 points or 2.55% to 29,118.30 and Nikkei 225 slipped 645.87 points or 2.19% to 28,913.23.
On the other hand, Straits Times advanced 5.29 points or 0.18% to 3,005.66.