Indices drop for 2nd day; Nifty ends below 15k level

Indian equity benchmarks ended in the negative territory for the second straight trading session on Monday, dragged by selling in Energy, Finance and Healthcare stocks amid mixed global cues. Key gauges made negative start and stayed in red for whole day, with disappointing macro-economic data. With decline in output of capital goods, manufacturing and mining sectors, industrial production re-entered the negative territory in January. The Index of Industrial Production contracted by 1.6 percent in January 2021 over last year, compared to a rise of 1.6 percent in December. Besides, owing to higher food and fuel prices, the consumer price index (CPI) based retail inflation rose to three-month high of 5.03 per cent in February as compared to 4.06 percent in January, raising fresh concerns about the health of the economy. Some concern also came amid reports that foreign portfolio investors (FPIs) were net sellers to the tune of Rs 7,013 crore so far this month in the Indian markets on profit-booking as jitters in global bond markets spooked investors. As per depositories data, FPIs pulled out Rs 531 crore from equities and Rs 6,482 crore from the debt segment between Mar 1-13.

Sentiments remained fragile in late afternoon session, as the Wholesale price-based inflation (WPI) in February rose to its 27-month high to 4.17 percent as against 2.03 percent a month ago in January. This is a 27-month high. However, markets recovered some losses in final hour of trade, as traders found some support with Minister of State for Finance and Corporate Affairs Anurag Thakur’s statement that there are green shoots visible in various sectors of the economy and the country is already looking at a V-shaped recovery. Besides, NITI Aayog CEO Amitabh Kant has said that India's power is truly represented by its sustained economic growth, which is a key to its future and critical for security reasons. He said as a fallout of the COVID-19 pandemic radical reforms were ushered in across a range of sectors and asserted that India has had the sharpest recovery among the major economies.

On the global front, Asian markets ended mixed on Monday as investors awaited the outcome of this week's FOMC meeting for any comments about rising yields and the U.S. economic growth outlook. European markets were trading in green as buoyant expectations for global economic recovery helped investors shrug off fears about rising inflation. Back home, on the sectoral front, auto stocks were in focus as India Ratings and Research (Ind-Ra) revised the outlook for the auto sector to improving for financial year 2022 from negative, backed by likely revival across segments, positive consumer sentiments amid macroeconomic tailwinds after recovering from the COVID-19 pandemic. Power stocks were in focus with data showing that power consumption in the country grew 16.5 percent in the first 12 days of this month at 47.67 billion units over the corresponding period a year ago, showing a revival in the economic activities.

Finally, the BSE Sensex fell 397.00 points or 0.78% to 50,395.08, while the CNX Nifty was down by 101.45 points or 0.67% to 14,929.50. 

The BSE Sensex touched high and low of 50,834.78 and 49,799.07, respectively. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.72%, while Small cap index was down by 0.53%.

The top gaining sectoral indices on the BSE were Metal up by 1.49%, Power up by 0.98%, Utilities up by 0.51%, Basic Materials up by 0.40%, IT up by 0.33% while, Energy down by 1.20%, Finance down by 1.19%, Healthcare down by 1.02%, Capital Goods down by 0.99% and Industrials down by 0.94% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 2.22%, Power Grid up by 1.86%, Indusind Bank up by 1.51%, HCL Technologies up by 1.24% and NTPC up by 1.14%. On the flip side, Bajaj Finserv down by 2.68%, Bajaj Auto down by 2.21%, Bajaj Finance down by 2.09%, Larsen & Toubro down by 1.99% and Asian Paints down by 1.92% were the top losers.

Meanwhile, Chief Economic Advisor Krishnamurthy Subramanian has said that India requires growth at this juncture, even with economic tradeoffs, as it aspires to increase its dominance and self- reliance in the global economy. His comment comes ahead of the revision of policy framework and inflation targets by the Monetary Policy Committee headed by the RBI governor by March 31. It will be the first review for RBI since it was tasked with a mandated inflation target of 4 percent with a 2 percent deviation either way in June 2016, when it adopted a flexible inflation targeting model.

Subramanian said ‘at this juncture we must focus on growth and when it comes to pressures for trade-offs, we must be leaning on growth.’ Talking about realising 'Atmanirbhar Bharat', he said the private sector has to get back to Subh Labh (ethical profit) and not profiteering as India intends to move out from doing business.

He also called for a change in the mindset on how to increase the pie of government taxes instead of seeking its reduction across sectors. He said the cycle of private sector investment will begin though there is a lag and to support it government spending in capex is necessary. The government has already begun it and it will trigger private investment.

The CNX Nifty traded in a range of 15,048.40 and 14,745.85. There were 23 stocks advancing against 27 stock declining on the index.

The top gainers on Nifty were JSW Steel up by 2.44%, Tech Mahindra up by 2.37%, Tata Steel up by 2.26%, Hindalco Industries up by 1.65% and Indusind Bank up by 1.59%. On the flip side, Divis Lab down by 2.91%, Bajaj Finserv down by 2.71%, GAIL India down by 2.55%, Bajaj Finance down by 2.48% and Hero MotoCorp down by 2.43% were the top losers.

European markets were trading lower; UK’s FTSE 100 increased 22.36 points or 0.33% to 6,783.83, France’s CAC increased 20.04 points or 0.33% to 6,066.59 and Germany’s DAX increased 27.38 points or 0.19% to 14,529.77.

Asian markets ended mixed on Monday as the US 10 year treasury yields continued to hover near their 13-month peak after the passage of a $1.9 trillion stimulus bill, while investors are awaited the outcome of this week's Federal Open Market Committee (FOMC) meeting for any comments about rising yields and the US economic growth outlook. Chinese shares ended lower as a neutral lending stance from the People’s Bank of China as well as surging economic activity data have renewed concerns about tightening liquidity. Industrial production jumped a forecast-busting 35.1 percent on-year, the biggest bounce in decades, while retail sales also spiked and beat expectations with 33.8 percent growth. Japanese shares ended up slightly on increasing optimism around swift recovery of global economy. While data showed the value of core machine orders in Japan slipped a seasonally adjusted 4.5 percent sequentially in January, that exceeding expectations for a decline of 5.5 percent following the upwardly revised 5.3 percent increase in December.