Equity markets add losses in late afternoon session

Local equity markets have magnified their losses in late afternoon deals, hovering near the lowest points of the day on account of selling in frontline counters. Traders failed to draw any sense of relief on report that Ministry of Finance, Government of India has decided to provide an additional amount of upto Rs 15,000 crore to States as interest free 50 year loan for spending on capital projects. The Department of Expenditure has issued fresh guidelines in this regard on the ‘Scheme of Financial Assistance to States for Capital Expenditure’ for the financial year 2021-22. Traders remained anxious with the Centre for Monitoring Indian Economy’s statement that the unemployment rate in India has shot up in the first two weeks of April and the monthly unemployment rate is likely to be close to 8% compared to 6.5% in March with lower absorption of labour in the market. On the global front, Asian markets were trading mostly in red as investors struggled to take the lead from a record performance on Wall Street and following below-forecast Chinese factory data. European markets were trading higher helped by further evidence that the region is recovering from the pandemic-influenced slump.

The BSE Sensex is currently trading at 48968.25, down by 797.69 points or 1.60% after trading in a range of 48938.19 and 49569.42. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.49%, while Small cap index was up by 0.06%.

The few gaining sectoral indices on the BSE were Oil & Gas up by 1.77%, Healthcare up by 1.34%, PSU up by 0.90% and Utilities was up by 0.62%, while Bankex down by 2.44%, Auto down by 1.00%, FMCG down by 0.87%, Consumer Discretionary down by 0.71% and Consumer Durables was down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 4.28%, Sun Pharma up by 2.86%, Dr. Reddys Lab up by 1.78%, Infosys up by 0.44% and NTPC up by 0.44%. On the flip side, HDFC Bank down by 3.86%, HDFC down by 3.86%, ICICI Bank down by 2.94%, Hindustan Unilever down by 2.59% and Kotak Mahindra Bank down by 2.38% were the top losers.

Meanwhile, with an aim to improve the future productive capacity of the economy, the Ministry of Finance, Government of India has decided to provide an additional amount of upto Rs 15,000 crore to States as interest free 50 year loan for spending on capital projects. The Department of Expenditure has issued fresh guidelines in this regard on the ‘Scheme of Financial Assistance to States for Capital Expenditure’ for the financial year 2021-22.

Capital expenditure creates employment, especially for the poor and unskilled, has a high multiplier effect, enhances the future productive capacity of the economy, and results in a higher rate of economic growth. Therefore, despite the adverse financial position of the Central Government, it was decided last year to launch a ‘Scheme for Special Assistance to States for Capital Expenditure’.

Under the Scheme, financial assistance is provided to the State Governments in the form of 50-year interest free loan. An amount not exceeding Rs 12,000 crore was earmarked for the scheme for the financial year 2020-21, and a sum of Rs 11,830.29 crore was released to the States.  This helped to sustain state level capital expenditure in the pandemic year. In view of the positive response to the scheme and considering the requests of the State Governments, the Government has decided to continue the scheme in the year 2021-22.

The CNX Nifty is currently trading at 14699.60, down by 195.30 points or 1.31% after trading in a range of 14674.45 and 14855.45. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Divis Lab up by 5.58%, ONGC up by 4.28%, Coal India up by 3.75%, Grasim Industries up by 3.42% and Sun Pharma up by 2.94%. On the flip side, HDFC down by 4.15%, HDFC Bank down by 3.90%, ICICI Bank down by 2.96%, Hindustan Unilever down by 2.57% and Kotak Mahindra Bank down by 2.28% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 578.38 points or 1.97% to 28,724.88, Nikkei 225 slipped 241.34 points or 0.83% to 28,812.63, Shanghai Composite declined 28.04 points or 0.81% to 3,446.86, KOSPI fell 26.21 points or 0.83% to 3,147.86 and Jakarta Composite was down by 17.34 points or 0.29% to 5,995.62. On the flip side, Straits Times was up by 2.89 points or 0.09% to 3,224.47.

European markets were trading higher, UK’s FTSE 100 increased 9.42 points or 0.14% to 6,970.90, France’s CAC increased 4.83 points or 0.08% to 6,307.40 and Germany’s DAX was up by 79.55 points or 0.52% to 15,233.75.