Domestic indices trade under pressure in early deals

Indian equity benchmarks made pessimistic start on Wednesday tracking mixed cues from global peers. Markets are trading lower with notable losses in early deals due to selling in IT, TECK and Bankex stocks. Though, broader indices -- BSE mid and small cap indices were trading higher. Investors are tracking the RBI’s 3-day monetary policy meeting that begins later in the day, amid expectations that inflation and growth concerns could see the monetary policy committee (MPC) maintain an accommodative stance. Traders were concerned with report that the second Covid wave has led to a sudden spike in India’s unemployment rate - it rose to 11.9% in May from 7.97% in the previous month. The rate had last reached double digits in June last year, when it was 10.18%. According to the Centre for Monitoring Indian Economy (CMIE) data, barring April, May and June last year, the monthly unemployment had never breached the double-digit mark at least since January, 2016. Meanwhile, India reported 133,228 fresh Covid-19 infections, taking the caseload to 28,306,883. With 3,205 new fatalities, the death toll is now at 335,114, Worldometer showed. India continues to be the second worst-hit nation.

On the global front, Asian markets were trading mixed following the lack of cues overnight from Wall Street. Traders are wary of making significant moves ahead of the release of the U.S. Labor Department's closely watched monthly jobs report on Friday for further clues on the outlook for the world's biggest economy. Back home, NBFCs and HFCs stocks were in focus with ICRA’s report that restrictions in movements imposed by various states are likely to impact collections of non-banking financial companies (NBFCs) and housing finance companies (HFCs), which may see NPAs rising to 4.5 - 5 per cent by March 2022. In scrip specific development, ITC traded under pressure as its Q4FY21 standalone net profit fell 1.3 percent to Rs 3,748.4 crore from Rs 3,797 crore, revenue jumped 22.6 percent to Rs 13,294.66 crore from Rs 10,842.28 crore, YoY.

The BSE Sensex is currently trading at 51702.19, down by 232.69 points or 0.45% after trading in a range of 51590.25 and 51863.94. 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 0.77%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Power up by 1.31%, Utilities up by 1.22%, Metal up by 0.95%, PSU up by 0.66%, Industrials up by 0.65%, while IT down by 0.83%, TECK down by 0.79%, Bankex down by 0.58%, FMCG down by 0.19%, Telecom down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 0.73%, Maruti Suzuki up by 0.69%, Power Grid up by 0.65%, Sun Pharma up by 0.60% and Bajaj Finance up by 0.43%. On the flip side, Tech Mahindra down by 2.46%, ITC down by 1.88%, Kotak Mahindra Bank down by 1.20%, HCL Technologies down by 1.13% and HDFC down by 1.09% were the top losers.

Meanwhile, Moody’s Investors Service has pegged India’s Gross domestic product (GDP) growth at 9.3 percent in the current fiscal ending March 2022 (FY22) and 7.9 percent in FY23. It said ‘the reimposition of lockdown measures along with behavioural changes on fear of contagion will curb economic activity, but we do not expect the impact to be as severe as during the first wave.’

It mentioned ‘We expect a decline in economic activity in the April-June quarter, followed by a rebound, resulting in real, inflation-adjusted GDP growth of 9.3 percent in the fiscal year ending March 2022 and 7.9 percent in fiscal 2022-23.’ India’s economy contracted by 7.3 percent in fiscal 2020-21.

It said the pandemic will leave new economic scars and deepen pre-pandemic constraints. Over the longer term, it expects real GDP growth to average around 6 percent.

The CNX Nifty is currently trading at 15522.80, down by 52.05 points or 0.33% after trading in a range of 15491.95 and 15564.05. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 1.68%, Tata Steel up by 1.30%, JSW Steel up by 1.25%, Coal India up by 1.19% and Cipla up by 1.12%. On the flip side, Tech Mahindra down by 2.37%, ITC down by 1.84%, HCL Technologies down by 1.21%, Kotak Mahindra Bank down by 1.20% and HDFC down by 1.10% were the top losers.

Asian markets were trading mixed; Straits Times fell 26.71 points or 0.84% to 3,160.52, Hang Seng slipped 186.60 points or 0.63% to 29,281.40, Taiwan Weighted lost 90.18 points or 0.53% to 17,072.20 and Shanghai Composite was down by 23.47 points or 0.65% to 3,601.24. On the other hand, Nikkei 225 surged 141.07 points or 0.49% to 28,955.41, KOSPI added 4.05 points or 0.13% to 3,225.92 and Jakarta Composite rose 59.65 points or 1.00% to 6,007.11.