Sensex, Nifty remain lower in late morning deals

Indian equity benchmarks remained lower in late morning session, with both Sensex and Nifty trading in red. Mixed cues from other Asian markets impacted sentiments over the Dalal Street. Traders got worried, after the International Monetary Fund (IMF) has said that global food prices have rallied to multi-year highs, triggered by Covid-19 pandemic-related supply chain disruptions and soaring transport costs. Besides, the Public Debt Management report for the January-March 2021 quarter, released by the finance ministry, has said the government's total liabilities stood at Rs 116.21 lakh crore at the end of March 2021, up 6.36 per cent from the previous quarter. The total liabilities (including liabilities under the 'Public Account') of the government were Rs 109.26 lakh crore at end-December 2020.

On the global front, Asian markets were trading mixed, even after Singapore's industrial production accelerated in May. The data from the Economic Development Board showed that industrial output surged 30.0 percent year-on-year in May, following a 2.3 percent rise in March. Production was forecast to increase 23.6 percent. Excluding biomedical manufacturing, industrial production grew 29.0 percent yearly in May, following a 11.3 percent rise in the preceding month.

The BSE Sensex is currently trading at 52850.01, down by 75.03 points or 0.14% after trading in a range of 52747.95 and 53126.73. 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 0.52%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Metal up by 1.21%, Healthcare up by 0.94%, Basic Materials up by 0.93%, Utilities up by 0.90% and PSU up by 0.57%, while IT down by 0.48%, TECK down by 0.47%, Telecom down by 0.27%, Consumer Durables down by 0.27% and Energy down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.75%, NTPC up by 1.21%, Dr. Reddy's Lab up by 1.14%, Sun Pharma up by 0.86% and Asian Paints up by 0.52%. On the flip side, Titan Company down by 1.52%, TCS down by 1.14%, HCL Tech down by 0.85%, Bajaj Finserv down by 0.78% and Bajaj Finance down by 0.74% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its auto monitor report for May has stated that the passenger vehicle (PV) segment is expected to record a month-on month (M-o-M) increase in sales volume during June 2021, as the manufacturing activities at most of the OEM plants have resumed. It added that widespread and severe business impact of the second Covid wave in May led to further deterioration in sales. It expects sales for June to witness healthy growth compared to May, aided by the pent-up demand with the gradual lifting of localised lockdown restrictions along with reopening of manufacturing facilities of OEMs and a steady decline in daily new Covid cases.

The ratings agency said ‘Major PV and 2W original equipment manufacturers (OEMs) advanced maintenance shutdowns to May and undertook plant shutdown for 10 to 14 days, amid state-wise lockdown related restrictions as well as dampening consumer sentiment’. it also said ‘Majority of the automotive dealerships have either closed or have limited their operations, limiting clearance of the existing inventory. Also, supply-side constraints due to localised lockdowns in several states for almost the entire month have affected sales’.

Accordingly, the domestic automobile industry's sales volume declined 65 per cent M-o-M in May 2021 despite of a lower base, following a 30 per cent M-o-M fall in April 2021, which was also impacted by lockdowns, albeit in the key states and towards the latter part of the month. It noted that ‘the PV and two-wheeler sales declined by 66 per cent and 65 per cent M-o-M, respectively, in May 2021’. Additionally, ‘Domestic three-wheeler demand was almost wiped out with a decline of 91 per cent M-o-M amid a further reduction in preference for shared mobility’.

However, the growth trend in exports volumes was also disrupted in May, with volumes declining by 16 per cent M-o-M. Besides, the total production, excluding CVs, decreased 57 per cent M-o-M due to a 58 per cent M-o-M decline in the production levels of PVs and two-wheelers in May 2021. Retail sales also declined in May with PV and two-wheeler volumes declining 59 per cent and 52 per cent M-o-M, respectively, reflecting further deterioration in consumer sentiments and continued closure or limited operations of majority of the dealerships.

The CNX Nifty is currently trading at 15845.75, down by 14.60 points or 0.09% after trading in a range of 15817.95 and 15915.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 2.11%, ONGC up by 1.86%, Adani Ports & SEZ up by 1.77%, Tata Steel up by 1.61% and Tata Consumer Products up by 1.36%. On the flip side, HDFC Life Insurance down by 2.95%, Titan Company down by 1.41%, TCS down by 1.14%, HCL Tech down by 0.86% and Bajaj Finance down by 0.78% were the top losers.

Asian markets were trading mixed; Hang Seng increased 405.76 points or 1.4% to 29,288.22, Taiwan Weighted strengthened 54.38 points or 0.31% to 17,557.37, Straits Times advanced 9.31 points or 0.3% to 3,130.91 and Shanghai Composite gained 1.04 points or 0.03% to 3,608.60. On the flip side, KOSPI fell 6.07 points or 0.18% to 3,296.77, Nikkei 225 slipped 42.72 points or 0.15% to 29,023.46 and Jakarta Composite lost 50.21 points or 0.83% to 5,972.19.