Benchmarks trade in red in early deals amid global sell-off

Indian equity benchmarks made gap-down opening on Monday tracking weakness in global peers. Markets trimmed some of their losses, but continued their trade in red in early deals due to selling in almost all the sector indices except FMCG.  Some cautiousness crept in as Care Ratings said the credit growth for FY22 is likely to remain in low double-digit on the back of muted economic activity. However, downside remained capped as India's fresh Covid cases have stayed below 1 lakh for the last 14 days while on Sunday, the country reported 58,419 fresh cases, the lowest in 81 days. Some support also came in as Chief Economic Advisor (CEA) K V Subramanian has said the government is open to coming out with more measures to boost the economy which has been hit by the second wave of the coronavirus pandemic.

Sell-off in the global markets dented sentiments in the domestic markets. All the Asian markets were trading lower following the broadly negative cues from Wall Street on Friday as investors remain spooked after the US central bank said it might raise interest rates sooner than previously expected. Investors also reacted to disappointing readings on weekly US jobless claims. The COVID-19 infection concerns in several markets in the region also kept the underlying mood cautious.

Back home, telecom stocks were in focus reacting to their subscribers’ data. Reliance Jio added 79.18 lakh wireless subscribers, Bharti Airtel added 40.5 lakh users and Vodafone Idea gained 10.8 lakh customers during March. In scrip specific developments, NTPC gained as its Q4FY21 consolidated profit jumped to Rs 4,649.49 crore from Rs 1,629.86 crore, while revenue fell to Rs 30,102.6 crore from Rs 30,390.51 crore, YoY. Hinduja Global Solutions traded higher as its Q4FY21 consolidated profit jumped to Rs 130.31 crore from Rs 44.84 crore, while revenue rose to Rs 1,563.58 crore from Rs 1,285.7 crore, YoY.

The BSE Sensex is currently trading at 52006.66, down by 337.79 points or 0.65% after trading in a range of 51740.19 and 52021.00. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.68%, while Small cap index was down by 0.30%.

The sole gaining sectoral index on the BSE was FMCG up by 0.15%, while Power down by 1.32%, Capital Goods down by 1.30%, Auto down by 1.14%, Metal down by 0.97%, Basic Materials down by 0.91% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.42%, Hindustan Unilever up by 1.36%, Asian Paints up by 0.48% and Sun Pharma up by 0.40%. On the flip side, Mahindra & Mahindra down by 1.97%, Ultratech Cement down by 1.58%, ICICI Bank down by 1.36%, Tata Steel down by 1.30% and Indusind Bank down by 1.27% were the top losers.

Meanwhile, Care Ratings has said that the credit growth for current financial year (FY22) is likely to remain in low double-digit on the back of muted economic activity. The slowdown in economy can further delay anticipated pick-up in credit growth apart from the likely impact on asset quality.

However, it said the sector's medium-term prospects look promising with diminished corporate stress and increased provisioning levels across banks. The bank credit growth rate has been marginally lower when compared with previous fortnight and remained largely stable compared to period ended March.

It stated this can be ascribed to risk aversion and regional lockdown imposed by states this year to curb the spread of coronavirus amid the second wave of pandemic that started in April and continued in May. However, many states have declared relaxation in lockdown or imposed partial lockdown in June. The result of this on bank credit will be known after reviewing the additions in bank credit by June-end.

The CNX Nifty is currently trading at 15582.85, down by 100.50 points or 0.64% after trading in a range of 15505.65 and 15590.50. There were 8 stocks advancing against 41 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were NTPC up by 2.64%, Adani Ports & SEZ up by 1.62%, Hindustan Unilever up by 1.24%, BPCL up by 0.53% and ONGC up by 0.50%. On the flip side, UPL down by 2.85%, Tata Motors down by 1.96%, Wipro down by 1.96%, Mahindra & Mahindra down by 1.85% and Hindalco down by 1.63% were the top losers.

All the Asian markets were trading in red; Nikkei 225 plunged 1,029.67 points or 3.55% to 27,934.41, Straits Times fell 37.98 points or 1.21% to 3,106.18, Hang Seng slipped 396.74 points or 1.38% to 28,404.53, Taiwan Weighted declined 244.41 points or 1.41% to 17,074.13, KOSPI skid 36.93 points or 1.13% to 3,231.00, Jakarta Composite lost 52.34 points or 0.87% to 5,954.78 and Shanghai Composite was down by 7.93 points or 0.22% to 3,517.17.