Benchmarks trade lower in early deals on weak global cues

Indian equity benchmarks made gap-down opening on last trading session of financial year 2020-21 (FY21), tracking weakness in global markets. domestic indices are trading lower with cut of around half a percent in early deals due to selling in Bankex, IT and TECK stocks, though buying in Metal, Utilities and Basic Materials counters capped the downside. Rising coronavirus cases in the country also weighted down on the domestic indices. India has recorded 53,158 cases recorded in the last 24 hours. With the latest addition, the country's tally has soared to 12,148,487, Worldometer showed this morning. With active cases hitting 553,933, India is now the 6th-worst hit country. The death toll from the deadly infection jumped to 162,502. Adding more pessimism, a report by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) stated that India's economic output in 2021 is expected to remain below the 2019 level despite roll-out of the vaccine to deal with the menace of the coronavirus pandemic. Meanwhile, Union Finance Minister Nirmala Sitharaman said India's quick response in limiting the impact of the COVID-19 pandemic and undertaking massive vaccination drives are resulting in a V-shaped recovery.

Global cues remained weak with most of the Asian markets trading lower following negative cues overnight from Wall Street amid fears that global banks could lose more than $6 billion from the downfall of Archegos Capital and sliding oil prices. Traders were also weighing the impact of a surge in coronavirus cases and extended lockdown measures in Europe. Back home, sugar sector stocks were in focus with a report that the government has decided not to extend soft loans for at least a year to sugar mills for capacity expansion under the Sugar Development Fund (SDF), which offers financing at 2 percentage points below the prevailing bank rate. In scrip specific development, HPCL gained as it acquired a balance 50 percent stake in Chhara LNG Terminal for Rs 397 crore.

The BSE Sensex is currently trading at 49869.59, down by 266.99 points or 0.53% after trading in a range of 49678.63 and 50050.32. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Metal up by 0.87%, Utilities up by 0.63%, Basic Materials up by 0.62%, Energy up by 0.60%, Industrials up by 0.58%, while Bankex down by 0.85%, IT down by 0.41%, TECK down by 0.37%, Capital Goods down by 0.08%, Power down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.05%, Axis Bank up by 0.96%, Reliance Industries up by 0.80%, Sun Pharma up by 0.76% and Mahindra & Mahindra up by 0.75%. On the flip side, HDFC Bank down by 2.72%, HDFC down by 2.17%, Power Grid down by 1.56%, ICICI Bank down by 1.44% and Tech Mahindra down by 1.28% were the top losers.

Meanwhile, Moody's Analytics has said India's inflation is at uncomfortably high level, which is an exception among Asian economies. It said higher fuel prices will keep upward pressure on retail inflation and keep the RBI from offering further rate cuts. Retail inflation rose to 5 per cent in February, from 4.1 per cent in January. The Reserve Bank mainly takes into account retail inflation while deciding on the monetary policy. Core inflation (which excludes food, fuel and light) was up 5.6 per cent in February, from 5.3 per cent in January, it said, adding India's inflation is uncomfortably high.

In its macro roundup, it said inflation is subdued in most of Asia, and expected to only gradually pick up over 2021 because of rising oil prices and economies starting to reopen. Brent crude has climbed 26 per cent this year at around $64 per barrel. It was around $30 per barrel in March 2020, when the COVID-19 crisis was near its peak.

It stated India and the Philippines are exceptions. In these economies, inflation is above comfort levels, adding to the list of challenges for policymakers. Stating that India's inflation is worrisome, it said volatile food prices and rising oil prices led retail inflation to exceed the upper band of 6 per cent several times in 2020, inhibiting the RBI's ability to keep accommodative monetary settings in place during the height of the pandemic.

The CNX Nifty is currently trading at 14783.00, down by 62.10 points or 0.42% after trading in a range of 14723.10 and 14813.75. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.46%, Tata Consumer Product up by 2.19%, Tata Steel up by 1.63%, Hindalco up by 1.47% and Bajaj Finserv up by 1.14%. On the flip side, HDFC Bank down by 2.87%, HDFC down by 2.31%, Power Grid down by 1.60%, ICICI Bank down by 1.41% and Tech Mahindra down by 1.19% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 208.88 points or 0.71% to 29,223.82, Straits Times lost 3.60 points or 0.11% to 3,187.29, Hang Seng fell 69.72 points or 0.24% to 28,507.78, Taiwan Weighted slipped 87.83 points or 0.53% to 16,467.07, Jakarta Composite dipped 100.59 points or 1.66% to 5,970.85, and Shanghai Composite was down by 21.22 points or 0.61% to 3,435.46, while KOSPI advanced 3.41 points or 0.11% to 3,073.41.