Markets trade under pressure in early deals

Indian equity benchmarks made gap-down start on Wednesday mirroring weakness in global peers. Markets are trading lower with cut of around half a percent each in early deals due to heavy selling in Metal, Energy and banking stocks. Additionally, rising coronavirus cases in the country dampened the sentiments in the markets. India recorded 47,264 new cases, taking to tally to 11,733,594, according to Worldometer. The death toll from the deadly infection jumped to 160,477. India has the 7th highest number of active cases globally. Maharashtra recorded 28,699 new Covid-19 cases and 132 deaths. Traders overlooked Union Minister of State for Finance and Corporate Affairs Anurag Singh Thakur’s statement that steps taken by the government during the pandemic have helped the economy recover, and the country is expected to clock double-digit growth in the next fiscal.

On the global front, all the Asian markets were trading lower following negative cues overnight from Wall Street on sinking crude oil prices and renewed coronavirus concerns due to extension of lockdown measures in several countries in Europe, particularly in Germany, and the sluggish vaccination campaign in the region. The sanctions between China and the West also rattled investors. Back home, aviation stocks were trading under pressure as Indian aviation regulator Directorate General of Civil Aviation (DGCA) said the coronavirus-induced suspension of scheduled international passenger flights has been extended till April 30. In scrip specific development, Vodafone Idea lost after increasing the prices of its Family postpaid plans.

The BSE Sensex is currently trading at 49798.93, down by 252.51 points or 0.50% after trading in a range of 49684.51 and 49854.58. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.14%, while Small cap index was up by 0.02%.

The few gaining sectoral indices on the BSE were Power up by 0.58%, Healthcare up by 0.57%, Utilities up by 0.43%, while Metal down by 1.62%, Energy down by 1.07%, Bankex down by 0.93%, Oil & Gas down by 0.90%, Realty down by 0.84% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.87%, Sun Pharma up by 0.97%, Dr. Reddy’s Lab up by 0.75%, Power Grid up by 0.46% and Nestle up by 0.41%. On the flip side, ONGC down by 2.19%, ICICI Bank down by 1.67%, SBI down by 1.50%, Reliance Industries down by 1.23% and Axis Bank down by 1.09% were the top losers.

Meanwhile, rating agency -- India Ratings and Research (Ind-Ra) has said providing services like broadband connectivity, cable TV, enterprise solutions, and payment wallets is the need of the hour for telcos, and a second wave of consolidation is upon the industry.  The agency said the sector, which was battered following the aggressive entry of Reliance Jio, will continue showing signs of recovery amid conducive regulatory environment and maintained a stable outlook for the industry in FY22.

It said the second round of consolidation (Consolidation 2.0) is kicking-in in the industry, which will bring a transformation in the business models of telecom companies, leading to the evolution of incumbents from the providers of traditional voice-only services to complete digital solutions for households. Along with wireless mobility, telcos will have to provide services such as broadband connectivity, cable TV services (direct -to-home), enterprise solutions, e-payment wallets/platforms, music applications and over-the-top transmission platform. Such bundling of services along with the traditional wireless mobile services has become the need of the hour to ensure customer stickiness and widen the market footprint, it said.

Besides, it can be noted that the sector was once a very busy field with up to half a dozen operators to choose from. However, in the last five years, operators like Vodafone and Idea went for a meger, some retreated and some were also forced to go into bankruptcy because of the financial difficulties. Among the operators, it said Jio has strong or moderate presence in all the allied services, except enterprise segment where it is non-existent, while Bharti Airtel lacks broadcasting presence and Vodafone Idea does not have a presence in broadcasting, payment wallets and direct to home.

It also mentioned the increasing data usage and rising proportion of higher average revenue per user data customers in the overall subscriber mix indicate that, even without tariff hikes, the sector is structurally moving towards a higher- average revenue per user regime. It stated competition intensity has alleviated over the last one year, as evident from narrowing of tariff differentials among telcos.

The CNX Nifty is currently trading at 14732.90, down by 81.85 points or 0.55% after trading in a range of 14703.15 and 14752.35. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.03%, Sun Pharma up by 1.30%, Cipla up by 0.93%, Power Grid up by 0.73% and NTPC up by 0.46%. On the flip side, Hindalco down by 2.76%, Tata Steel down by 2.54%, ONGC down by 1.91%, ICICI Bank down by 1.62% and JSW Steel down by 1.51% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 453.70 points or 1.56% to 28,542.22, Straits Times fell 4.64 points or 0.15% to 3,127.10, Hang Seng slipped 520.60 points or 1.83% to 27,976.78, Taiwan Weighted weakened 135.55 points or 0.84% to 16,042.04, KOSPI lost 10.30 points or 0.34% to 2,994.44, Jakarta Composite plunged 56.90 points or 0.91% to 6,195.81, and Shanghai Composite was down by 41.73 points or 1.22% to 3,369.78.