Benchmarks trade deep in red in late afternoon session

The Indian equity benchmarks traded deep in red in late afternoon session, with the Sensex and the Nifty falling above 600 and 150 points, respectively. There were no gainers on sectoral indices on the BSE. The markets remained under pressure even after Prime Minister Narendra Modi said production linked incentive (PLI) scheme, which is aimed at boosting domestic manufacturing and exports, is expected to increase the country’s production by USD 520 billion in the next five years. Modi said the government is continuously carrying out reforms to boost domestic manufacturing. Sector wise, telecom sector remained in focus, as Moody's Investors Service in its latest report has said that spectrum renewals in the recently-held auction will boost telcos' market position. On the global front, Asian markets were trading lower as treasury yields spiked in reaction to the latest comments from Federal Reserve Chair Jerome Powell that he expects some inflationary pressures in the time ahead. European markets were trading lower amid fears of a rise in interest rates and a continued rotation out of growth stocks into the likes of industrials.

The BSE Sensex is currently trading at 50208.03, down by 638.05 points or 1.25% after trading in a range of 50183.66 and 50886.19. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 2.29%, while Small cap index was down by 1.62%.

The top losing sectoral indices on the BSE were Metal down by 3.28%, Telecom down by 2.57%, PSU down by 2.41%, Bankex down by 2.28% and Power was down by 2.20%.

The top gainers on the Sensex were Maruti Suzuki up by 1.49%, ONGC up by 1.15%, Kotak Mahindra Bank up by 0.56%, Nestle up by 0.54% and Titan Company up by 0.22%. On the flip side, Indusind Bank down by 5.87%, SBI down by 4.21%, ICICI Bank down by 2.95%, HDFC down by 2.21% and Bharti Airtel down by 2.13% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report on ‘India’s coal sector’ has said that while the high inventory at power stations and mines may continue to keep the domestic production and offtake levels under check in the near term, the players may resort to domestic coal over imported coal given the elevated import prices, especially for non-coking coal, supporting offtake.

As per the report, coal offtake improved 1.8% month on month (mom) in January 2021 to 58.9MT, driven by a 4.4% mom higher domestic power demand. However, the offtake was lower 4.5% year on year (yoy) due to the high inventory levels at power stations. Domestic coal production continued to improve in January 2021 to 66.5MT, higher 3.8% mom but lower 3.4% yoy. The output in 2HFY21 is likely to be supported by about 7% yoy higher overburden removed in 1HFY21 from open cast mines (around 94% of total production) due to a lower coal demand over 1HFY21.

Besides, the rating agency said that with the formalised ban imposed by China on Australian coal imports, coking coal import prices remained subdued over November-December 2020, on the back of an oversupply in the global market. Since mid-January 2021, coking coal import prices spiked to 49% ahead of the Chinese New Year holidays in February 2021, losing momentum thereafter with a dip of 11% in prices up to end-February 2021.

The CNX Nifty is currently trading at 14892.65, down by 188.10 points or 1.25% after trading in a range of 14872.65 and 15092.35. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.28%, Maruti Suzuki up by 1.32%, Hero MotoCorp up by 1.18%, ONGC up by 1.11% and Kotak Mahindra Bank up by 0.50%. On the flip side, Indusind Bank down by 5.82%, Tata Motors down by 4.98%, Wipro down by 4.50%, Hindalco down by 4.35% and UPL down by 4.31% were the top losers.

All Asian markets were trading lower; Hang Seng decreased 138.50 points or 0.47% to 29,098.29, Nikkei 225 slipped 65.79 points or 0.23% to 28,864.32, Taiwan Weighted dropped 51.18 points or 0.32% to 15,855.23, Jakarta Composite lost 32.05 points or 0.51% to 6,258.75, KOSPI fell 17.23 points or 0.57% to 3,026.26, Straits Times trembled 3.49 points or 0.12% to 3,011.29 and Shanghai Composite was down by 1.50 points or 0.04% to 3,501.99.

European markets were trading lower, UK’s FTSE 100 decreased 71.79 points or 1.08% to 6,579.09, France’s CAC decreased 60.29 points or 1.03% to 5,770.36 and Germany’s DAX was down by 145.38 points or 1.03% to 13,910.96.