Bears hold tight grip over Dalal Street

Indian equity benchmarks remained under pressure during late morning deals, as bears held their tight grip over the Dalal Street. Both Sensex and Nifty were trading lower in deep red with sharp losses, despite positive cues from other Asian markets. Traders were cautious, after India Ratings and Research said that privatisation of two public sector banks can impact their ratings as the government support to the two entities will disappear. The rating agency said the budget proposal to privatise the as yet unidentified PSBs “could lead to material negative migration of the long-term issuer ratings (mapped to senior instruments such as infrastructure bonds) and the ratings on Tier 2 instruments of the identified banks”.

On the global front, Asian markets were trading mostly in green, after Thailand's central bank left its key interest rate unchanged again on Wednesday in a bid to support a highly uncertain economic recovery. The Monetary Policy Committee voted unanimously to hold the policy rate unchanged at 0.50 percent. The previous change in the key rate was a quarter-point reduction in May last year amid the peak of the coronavirus pandemic.

The BSE Sensex is currently trading at 48583.10, down by 597.21 points or 1.21% after trading in a range of 48511.23 and 49247.95. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.36%, while Small cap index was down by 1.94%.

The top losing sectoral indices on the BSE were Telecom down by 2.83%, Power down by 2.66%, Realty down by 2.65%, Auto down by 2.64% and PSU down by 2.17%,while there were no gaining sectoral indices on the BSE.

The only gainer on the Sensex was Larsen & Toubro up by 0.24%. On the flip side, Maruti Suzuki down by 3.73%, Bharti Airtel down by 2.67%, SBI down by 2.57%, ITC down by 2.20% and Ultratech Cement down by 2.15% were the top losers.

Meanwhile, with increase in government capital expenditure, accelerate the COVID-19 vaccination drive, and resolute push to long-pending reforms, NITI Aayog CEO Amitabh Kant has said that industrial activities in India are expected to gather further momentum. He further said India did suffer a massive impact due to COVID-19 across the economy and society. He said ‘Fiscal, financial and long-term structural reforms were adopted which promoted a rapid V-shaped recovery’.

Kant added that India is the only country that has adopted structural reforms to expand supply in the medium to long term. India remained a preferred investment destination even while the pandemic was raging. He said ‘Net FDI (foreign direct investment) inflow in India posted an all-time monthly high of $9.8 billion in November 2020’. He said that in COVID-19 pandemic times, the role industry across sector has played is pivotal in providing innovative and engaging solutions leading to a collective and inclusive ecosystem. He said it is heartening to see the foreign businesses and institutions also actively and willingly contributing towards the Sustainable Development Goals (SDG) acceleration in India.

The NITI Aayog CEO also said that India currently looks at aggressively expanding its renewable energy programme. The country has made a global pledge as part of the nationally determined contributions to have 40 per cent of cumulative electric power installed capacity from non-fossil fuel sources. Kant said energy is a priority area for the UK industry in India. He said ‘We are sure that our structural and regulatory reforms would ensure a congenial business environment for global investors’. Also, participating at the event, UNDP India Resident Representative Shoko Noda said UNDP has been actively supporting India to work towards the SDGs.

The CNX Nifty is currently trading at 14380.30, down by 169.10 points or 1.16% after trading in a range of 14359.75 and 14575.60. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 0.35%, Grasim Industries up by 0.24%, Tech Mahindra up by 0.08% and Nestle up by 0.01%. On the flip side, Maruti Suzuki down by 3.78%, Indian Oil Corporation down by 3.38%, Tata Motors down by 3.04%, Bharti Airtel down by 2.74% and SBI down by 2.57% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 338.58 points or 1.19% to 28,744.10, Taiwan Weighted strengthened 26.49 points or 0.17% to 16,058.61, Straits Times advanced 10.49 points or 0.33% to 3,143.80, Hang Seng increased 10.12 points or 0.04% to 27,928.26 and KOSPI rose 8.74 points or 0.29% to 3,005.09. On the flip side, Shanghai Composite declined 0.42 points or 0.01% to 3,366.64 and Jakarta Composite lost 57.86 points or 0.94% to 6,098.28.