Markets trade under pressure in early deals amid rising coronavirus cases

Indian equity benchmarks made negative start on Friday tracking weakness in global peers. Markets are trading lower with cut of around half a percent each in early deals amid concerns over continues rising coronavirus cases in the country. India reported 332,503 fresh coronavirus infections on Friday, taking the cumulative caseload to 16,257,309, Worldometer showed. Adding more pessimism, S&P Global Ratings said the Indian economy is projected to grow at 11 per cent in the current fiscal, but flagged the substantial impact of broader lockdowns on the economy. In its report on Asia-Pacific Financial Institutions, S&P said the control of COVID-19 remains a key risk for the economy. New infections have spiked in recent weeks and the country is in the middle of a second pandemic wave. Also, rating agency Fitch Ratings has affirmed India’s long-term foreign-currency Issuer Default Rating (IDR) at ‘BBB-’ with a negative outlook.

On the global front, Asian markets were trading mixed following the broadly negative cues overnight from Wall Street on reports President Joe Biden plans to almost double the capital gains tax for wealthy individuals to fund spending on childcare and education. The mood is quite cautious in most of the markets in the region amid the continuing surge in coronavirus in the region and the possibility of lockdowns in certain places.

Back home, Initial public offerings (IPO) activity in India jumped massively in the January-March period of 2021, fuelled by ample liquidity, robust demand and investor appetite. On the BSE and NSE, there were 17 IPOs in Q1CY2021 as compared to 1 IPO in the same period last year and 10 IPOs in Q4CY2020. In scrip specific development, HCL Technologies gained ahead of its earnings results. Rallis India rose after its quarterly profit jumped multi-fold.

The BSE Sensex is currently trading at 47840.34, down by 240.33 points or 0.50% after trading in a range of 47743.43 and 48021.78. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.42%, while Small cap index was up by 0.93%.

The top gaining sectoral indices on the BSE were Power up by 1.71%, Utilities up by 1.46%, Healthcare up by 0.77%, Basic Materials up by 0.58%, Metal up by 0.54%, while Bankex down by 0.70%, Auto down by 0.39%, TECK down by 0.38%, FMCG down by 0.33%, IT down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 4.03%, Asian Paints up by 1.09%, HCL Technologies up by 0.68%, NTPC up by 0.60% and Sun Pharma up by 0.59%. On the flip side, ICICI Bank down by 1.66%, Hindustan Unilever down by 1.27%, HDFC Bank down by 1.20%, Bajaj Finance down by 1.18% and HDFC down by 1.04% were the top losers.

Meanwhile, S&P Global Ratings in its report on Asia-Pacific Financial Institutions has said the Indian economy is projected to grow at 11 per cent in the current fiscal (FY22), but flagged the substantial impact of broader lockdowns on the economy. It said the control of COVID-19 remains a key risk for the economy. New infections have spiked in recent weeks and the country is in the middle of a second pandemic wave.

It said ‘our forecast growth of 11 per cent for India in 2021 is followed by a 6.1 per cent-6.4 per cent forecast increase for the next couple of years... Some targeted lockdowns have already been implemented and more will likely be needed. The impact of broader lockdowns on the economy could be substantial, depending on their length and scope.’

S&P, which currently has a 'BBB-' rating on India with a stable outlook, has forecast an 11 per cent growth in the Indian GDP for the fiscal beginning April 1 on account of a fast economic reopening and fiscal stimulus. Besides, S&P in the report said credit conditions have improved for Asia-Pacific banks over the past quarter. It mentioned economies are recovering smartly, countries are rolling out vaccinations, and regional financing circumstances remain supportive. And yet, the pandemic has so seriously set back the finances of households and corporates, with deeply negative effects on lenders.

The CNX Nifty is currently trading at 14339.60, down by 66.55 points or 0.46% after trading in a range of 14319.05 and 14402.00. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.83%, SBI Life insurance up by 2.13%, Divis Lab up by 1.40%, Tata Steel up by 1.36% and Tata Consumer Product up by 0.95%. On the flip side, ICICI Bank down by 1.80%, Hindustan Unilever down by 1.29%, HDFC Bank down by 1.23%, HDFC down by 1.17% and Bajaj Finance down by 1.08% were the top losers.

Asian markets were trading mixed; Hang Seng jumped 249.58 points or 0.87% to 29,004.92, Taiwan Weighted rose 117.55 points or 0.69% to 17,214.52, Jakarta Composite added 10.57 points or 0.18% to 6,004.75 and Shanghai Composite was up by 1.57 points or 0.05% to 3,466.68. However, Nikkei 225 declined 221.54 points or 0.76% to 28,966.63, Straits Times fell 5.89 points or 0.18% to 3,181.89 and KOSPI lost 3.30 points or 0.10% to 3,174.22.