Key gauges continue lacklustre trade in morning deals

Indian equity benchmarks continued their lacklustre trade in morning deals, ahead of weekly expiry of index futures and option contracts. Traders remained cautious with Rating agency ICRA in its latest report stated that uptick in headline numbers of key economic indicators in April is due to the base effect and that the economy is headed into rough patch as consumer sentiment is down in the dumps due to the second wave of the pandemic. However, traders found some support with Minister of State for Chemicals and Fertilisers Mansukh L Mandaviya’s statement that the government is monitoring the supply of various essential drugs used in the treatment of COVID-19. The minister noted that all drugs used in the management of COVID-19 were now available in India by ramping up production and increasing the imports. On the sectoral front, banking stocks were in focus as RBI Governor Shaktikanta Das asked state-owned banks to quickly implement measures announced by the central bank recently in the right earnest, and to continue focussing on steps to enhance the resilience of their balance sheets. On the global front, Asian markets were trading mostly in red as a hint of tapering talk from the Federal Reserve sparked a sell-off in bonds and lifted the safe-haven dollar.

The BSE Sensex is currently trading at 49,896.94, down by 5.7 points or 0.01% after trading in a range of 49781.48 and 50099.17. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index up by 0.74%.

The top gaining sectoral indices on the BSE were Power up by 1.67%, Realty up by 1.41%, Healthcare up by 1.38%, Consumer Durables up by 0.85%, Capital Goods up by 0.66% while, Metal down by 3.71%, Basic Materials down by 1.44%, Telecom down by 1.05%, Auto down by 0.82%, Oil & Gas down by 0.77% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.01%, SBI up by 0.85%, Indusind Bank up by 0.77%, Mahindra & Mahindra up by 0.70% and Nestle up by 0.70%. On the flip side, ONGC down by 3.19%, HDFC Bank down by 1.95%, Kotak Mahindra Bank down by 1.90%, Bajaj Finserv down by 1.76% and Bajaj Finance down by 1.66% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that uptick in headline numbers of key economic indicators in April is due to the base effect and that the economy is headed into rough patch as consumer sentiment is down in the dumps due to the second wave of the pandemic. Despite the base effect-led spike in growth of many sectoral indicators in April, the slackening momentum, driven by the second wave of the pandemic has emerged as a major concern.

Moreover, the agency said the bruised consumer sentiment and the high healthcare and fuel bills will limit discretionary purchases in the immediate term, in addition to the expected cut-back in spending on contact-intensive services, leading to a negative overall impact on the economy. It noted that as expected, the shrunken base of the nationwide lockdown in April 2020 has boosted the pace of year-on-year expansion of several high-frequency indicators in April 2021, resulting in a widespread improvement compared to the performance in March 2021.

However, the report said the optimism generated by this trend is limited, as eight of the 13 non-financial indicators in April remained below their pre-COVID-19, i.e. at April 2019 levels. It pointed out that indicators such as GST e-way bills, electricity generation, vehicle registrations and rail freight traffic have slowed down and lost the sequential momentum in April, reflecting the rise in the pandemic infections cases and localised lockdowns.

The CNX Nifty is currently trading at 14,999.80, down by 30.35 points or 0.20% after trading in a range of 14960.50 and 15069.80. There were 18 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.18%, Hindalco up by 2.09%, Indusind Bank up by 2.00%, Mahindra & Mahindra up by 1.91% and Cipla up by 1.64%. On the flip side, Tech Mahindra down by 0.55%, HDFC Bank down by 0.54%, Grasim Industries down by 0.46%, Asian Paints down by 0.33% and Nestle down by 0.27% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 211.79 points or 0.74% to 28,382.02, Taiwan Weighted dropped 113.32 points or 0.7% to 16,019.34, Shanghai Composite declined 10.10 points or 0.29% to 3,500.86 and KOSPI fell 15.27 points or 0.48% to 3,157.78.

On the flip side, Straits Times advanced 9.99 points or 0.32% to 3,114.20, Jakarta Composite soared 44.64 points or 0.77% to 5,805.22 and Nikkei 225 surged 106.96 points or 0.38% to 28,151.41.