Sensex, Nifty remain lower in late morning deals

Indian equity benchmarks remained lower in late morning deals, with both Sensex and Nifty trading in red terrain. Negative cues from other Asian markets impacted domestic sentiments. Traders were worried, after domestic credit ratings agency Crisil has cut India’s gross domestic product (GDP) growth forecast to 9.5 per cent for the current fiscal (FY22) as compared to 11 percent projected earlier due to the hit to private consumption and investments following the second wave of COVID-19. It joins other watchers who have cut their FY22 growth projections, with some pegging it as low as 7.9 percent. The economy had contracted by 7.3 percent in FY21. However, losses were limited, as Fitch Solutions held an optimistic outlook for the Indian consumer over 2021 with real growth in household spending forecast at 9.1 per cent year-on-year. This marks the start of a recovery from the negative 9.3 per cent year-on-year contraction over 2020.

On the global front, Asian markets were trading in red, after Japan's gross domestic product shrank an annualized 3.9 percent on year in the first quarter of 2021, the Cabinet Office said in Tuesday's final reading. That exceeded expectations for a decline of 4.8 percent following the 11.7 percent surge in the three months prior.

The BSE Sensex is currently trading at 52304.63, down by 23.88 points or 0.05% after trading in a range of 52135.04 and 52432.43. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.23%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were IT up by 1.63%, TECK up by 1.42%, Power up by 1.24%, Utilities up by 1.23% and Telecom up by 0.63%, while Metal down by 1.68%, Bankex down by 0.95%, PSU down by 0.61%, Basic Materials down by 0.49% and Energy down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 2.05%, HCL Tech up by 1.85%, Infosys up by 1.80%, TCS up by 1.39% and Larsen & Toubro up by 1.15%. On the flip side, SBI down by 1.48%, ICICI Bank down by 1.19%, Ultratech Cement down by 1.14%, Bajaj Finserv down by 0.99% and Axis Bank down by 0.95% were the top losers.

Meanwhile, PHD Chamber of Commerce and Industry (PHDCCI) in its latest survey has pointed out that businesses are struggling with rising cost of raw materials amid the second COVID wave as restrictions in many parts of the country have disrupted supply chains and also impacted the pace of economic recovery. In a survey, the industry body said that going ahead, a substantial stimulus to push the growth of the Indian economy impacted by the second wave of the pandemic would be crucial.

It added that ‘the survey, which was conducted across 34 sectors, revealed that 73 per cent of respondents were struggling with rising cost of raw materials as restrictions in many parts of the country have impacted the pace of economic recovery with uncertain economic environment, disruptions in supply chains and contraction in demand’. Other key challenges faced by businesses include availability of working capital, maintaining price-cost margins/ profitability, weakening of demand, retaining the full workforce, wages/salaries, and repayment of loans. It added that companies are prioritising vaccination of employees as one the key strategic plans/ focus areas to tackle the situation.

PHD Chamber of Commerce and Industry President Sanjay Aggarwal said ‘Coronavirus 2.0 induced restrictions in the country have created a difficult time for the industry. The entire economic activity is severely impacted with the closure of offices and shops’. He added the supply chain disruptions are causing skyrocketing commodity prices, which have severely impacted the price cost margins of the businesses in the difficult pandemic time.

The CNX Nifty is currently trading at 15729.20, down by 22.45 points or 0.14% after trading in a range of 15680.00 and 15778.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.04%, Britannia up by 1.84%, HCL Tech up by 1.82%, Infosys up by 1.79% and Tata Consumer Products up by 1.70%. On the flip side, Hindalco down by 2.52%, Tata Steel down by 2.15%, JSW Steel down by 2.00%, Shree Cement down by 1.67% and SBI down by 1.60% were the top losers.

Asian markets were trading in red; Straits Times trembled 8.74 points or 0.28% to 3,167.07, Taiwan Weighted dropped 10.07 points or 0.06% to 17,073.84, Shanghai Composite declined 18.29 points or 0.51% to 3,581.25, Nikkei 225 slipped 31.15 points or 0.11% to 28,988.09, Jakarta Composite lost 44.69 points or 0.74% to 6,025.25 and Hang Seng decreased 101.78 points or 0.35% to 28,685.50. On the flip side, KOSPI rose 1.39 points or 0.04% to 3,253.51.