Indices trade with losses in morning deals

Indian benchmark indices erased their initial gains and traded with losses in Wednesday’s morning deals amid a negative trend in global markets. Traders remained cautious with a private report that India’s second wave of virus cases will hit the economy by prompting consumers to save rather than spend, unlike last year’s contraction that was driven mainly by supply disruptions. However, losses remain capped as some support came with RBI’s Monetary Policy Committee (MPC) member Ashima Goyal stating that India’s economy will do well once vaccination reaches a critical mass as pent-up demand, global recovery and easy financial conditions will boost activities. Meanwhile, the broader indices outran their benchmark peers, with both the S&P BSE MidCap and SmallCap indices ruling over half a percent higher.

On the global front, Asian markets were trading mostly in red, as traders continue to be cautious amid the accelerating daily coronavirus infection rates caused by highly contagious variants of the virus and the slow vaccine roll out. Back home, on the sectoral front, there was some buzz in tractor industry stocks as rating agency Crisil said growth in the domestic tractor sales volume is likely to be at 3-5 per cent this fiscal, given the strong second wave of COVID-19 and rising cases in the hinterland. Cement industry’s stocks too were in watch with Fitch Ratings’ statement that the recent price increases by Indian cement companies will counter higher energy costs while the impact on profitability from a resurgence of coronavirus is likely to be limited.

The BSE Sensex is currently trading at 50083.24, down by 110.09 points or 0.22% after trading in a range of 50015.57 and 50279.01. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index was up by 0.60%.

The top gaining sectoral indices on the BSE were Realty up by 1.67%, Power up by 1.50%, Utilities up by 1.11%, IT up by 0.94% and Healthcare up by 0.85%, while Auto down by 1.16%, Bankex down by 0.61%, Energy down by 0.43%, Oil & Gas down by 0.10% and Telecom down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.53%, Sun Pharma up by 1.43%, Power Grid up by 1.22%, Ultratech Cement up by 1.16% and Nestle up by 1.15%. On the flip side, Mahindra & Mahindra down by 2.37%, Bajaj Finserv down by 1.17%, ONGC down by 1.12%, Kotak Mahindra Bank down by 1.01% and Bajaj Finance down by 0.95% were the top losers.

Meanwhile, Research firm IDC has said that the IT and Business Services market in the country recorded a lower year-on-year growth of 5.41 percent to $13.41 billion in 2020 due to the impact of the COVID-19 pandemic on organisations. However, the IT and Business Services market is expected to grow at a CAGR of 7.18 percent between 2020-2025 and touch nearly $19 billion by the end of 2025 on the back of increased spending in areas like cloud and artificial intelligence.

As per IDC Worldwide Semi-annual Services Tracker, the Indian IT and Business Services market had grown by 8.43 percent in 2019, but the growth rate fell in 2020 due to the impact of the COVID-19 pandemic on businesses in the country.

Of the IT and Business Services market, the IT Services segment contributed 77.06 percent and grew by 5.97 percent in 2020. This is against a growth rate of 8.91 percent in 2019. As per IDC, the IT and Business Services market will begin picking up momentum gradually from 2021 onwards due to increased spending in areas like cloud, application modernisation, AI, automation etc.

The CNX Nifty is currently trading at 15074.35, down by 33.75 points or 0.22% after trading in a range of 15049.65 and 15133.40. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.15%, Shree Cement up by 2.30%, Wipro up by 1.44%, Sun Pharma up by 1.19% and Ultratech Cement up by 1.19%. On the flip side, Tata Motors down by 5.38%, Mahindra & Mahindra down by 2.45%, ONGC down by 1.46%, Bajaj Finserv down by 1.33% and Kotak Mahindra Bank down by 1.29% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 14.63 points or 0.41% to 3,514.38, Straits Times trembled 19.56 points or 0.62% to 3,123.07, Jakarta Composite lost 62.11 points or 1.06% to 5,772.28 and Nikkei 225 slipped 462.86 points or 1.63% to 27,943.98.

On the flip side, Taiwan Weighted strengthened 26.86 points or 0.17% to 16,172.84.