Domestic indices trade lower in early deals

Indian equity benchmarks extended their previous session losses with negative start on Friday tracking weakness in global peers. Markets are trading lower in early deals with cut of over half a percent each, due to selling in all the sector indices led by Realty, Capital Goods and Industrials. Rising coronavirus cases also dampened the sentiments in the markets. India reported 39,643 fresh Covid-19 cases on Thursday pushing the overall tally to 11,513,945, according to Worldometer. The death toll from the deadly infection jumped to 159,249. Maharashtra has recorded 25,833 new coronavirus cases, the highest one-day spike since last March when the first coronavirus infection was detected. However, losses remained capped as a UN report said India's economy, estimated to contract by 6.9 per cent in 2020 due to the coronavirus pandemic, is forecast to record a stronger recovery in 2021 and grow by 5 per cent, it also said the country's current fiscal year budget points to a shift towards demand-side stimulus, with an uptick in public investment.

On the global front, most of the Asian markets were trading lower following the negative cues overnight from Wall Street as a spike in treasury yields and plummeting oil prices weighed down technology and energy stocks. Investors are also concerned about the Fed's apparent willingness to let inflation accelerate more than normal that will hurt the global economic recovery. Back home, insurance stocks were in limelight as the Rajya Sabha passed The Insurance (Amendment) Bill, 2021, to increase the foreign direct investment limit in the sector from 49% to 74%.

The BSE Sensex is currently trading at 48844.26, down by 372.26 points or 0.76% after trading in a range of 48586.93 and 49002.26. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.61%, while Small cap index was down by 2.34%.

The top losing sectoral indices on the BSE were Realty down by 2.79%, Capital Goods down by 2.42%, Industrials down by 2.39%, Metal down by 2.10%, Auto down by 2.04%, while there was no gainers.

The top gainers on the Sensex were HCL Technologies up by 1.26%, Bharti Airtel up by 0.82%, Nestle up by 0.51%, ITC up by 0.44% and Hindustan Unilever up by 0.10%. On the flip side, ONGC down by 3.82%, Larsen & Toubro down by 3.11%, Bajaj Finance down by 2.43%, Maruti Suzuki down by 2.03% and Mahindra & Mahindra down by 2.01% were the top losers.

Meanwhile, ratings agency India Ratings and Research (Ind-Ra) has said profitability of upstream oil producers is expected to pick up in next financial year (FY22), led by rising oil and gas prices along with higher production.  The agency maintained a 'Stable' rating outlook for upstream oil companies and oil marketing companies for FY22, driven by their strategic importance to the Centre, and for city gas distribution entities due to their growth prospects.

Further, Ind-Ra stated ‘Although upstream companies have large capex plans and they continue to pay high dividends, it expects their credit metrics to remain strong in FY22 led by their scale and nature of operations, and strong liquidity, backed by the availability of liquid investments, sufficient banking lines and access to capital markets.’ It also said higher domestic gas price could impact the margins of CGD players marginally, though they would continue to benefit from their competitive position with respect to other fuels.

Besides, it said bringing natural gas under goods and services tax could boost consumption gradually. While it expects only a gradual pickup in gross refining margins in FY22, led by a muted improvement in crack spreads of key products, the marketing and pipeline segments would continue to provide cash flow stability. Petrochemical spreads, which had hit rock bottom in FY20, gained momentum over 9MFY21. It expects them to remain at higher than FY20 levels, despite a sharp pick-up in feedstock prices especially naphtha.

The CNX Nifty is currently trading at 14420.70, down by 137.15 points or 0.94% after trading in a range of 14350.10 and 14492.35. There were 7 stocks advancing against 42 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were HCL Technologies up by 1.24%, Bharti Airtel up by 0.49%, Nestle up by 0.38%, ITC up by 0.21% and Kotak Mahindra Bank up by 0.08%. On the flip side, ONGC down by 3.90%, Tata Motors down by 3.78%, GAIL India down by 3.07%, Larsen & Toubro down by 2.97% and Bajaj Finance down by 2.47% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 446.00 points or 1.48% to 29,770.75, Hang Seng slipped 432.81 points or 1.47% to 28,972.91, Taiwan Weighted dropped 230.10 points or 1.41% to 16,057.74, KOSPI plunged 29.05 points or 0.95% to 3,036.96, Jakarta Composite fell 23.52 points or 0.37% to 6,324.31, and Shanghai Composite was down by 36.16 points or 1.04% to 3,426.91, while Straits Times rose 9.49 points or 0.30% to 3,147.15.