Markets trade lower in early deals after cautious start

Indian equity benchmarks made cautious opening on Tuesday amid weakness in other Asian peers. Markets traded between red and green initially and are trading tad lower in early deals due to selling in Oil & Gas, Bankex and Metal stocks. Traders were concerned as S&P Global cut its growth forecasts for some of Asia's top economies including India, the Philippines and Malaysia, offsetting upgrades to China and South Africa and much of Latin America. The estimates, which feed into S&P's closely-followed sovereign ratings, saw India's growth projection chopped to 9.5% from 11% due to its COVID-19 outbreak. However, downside remained capped as Union Finance Minister Nirmala Sitharaman announced the much-awaited fiscal package to revive the economy ravaged by the second pandemic wave, keeping the fiscal outgo limited for the current year. Additionally, witnessing a sharp decline, India recorded 37,037 fresh Covid-19 cases in the last 24 hours with 907 fatalities, Worldometer showed.

On the global front, most of the Asian markets were trading lower following the mixed cues from Wall Street overnight, as traders were nervous about a resurgence of COVID-19 cases in Asia. A spike in coronavirus cases across several markets in the region over the weekend led to lockdowns and restrictions in some areas as well as new travel curbs in some parts of the world. Back home, travel sector stocks were in focus as the Centre announced free visas for 500,000 tourists and a loan guarantee scheme to support recognised tour operators and tourist guides whose business has been disrupted due to Covid-19 pandemic.

The BSE Sensex is currently trading at 52680.30, down by 55.29 points or 0.10% after trading in a range of 52657.11 and 52816.42. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.19%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Utilities up by 0.84%, FMCG up by 0.55%, Power up by 0.51%, Healthcare up by 0.41%, Industrials up by 0.37%, while Oil & Gas down by 0.63%, Bankex down by 0.57%, Metal down by 0.54%, Auto down by 0.24%, Basic Materials down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corp up by 1.53%, Larsen & Toubro up by 0.76%, Asian Paints up by 0.65%, TCS up by 0.64% and ITC up by 0.54%. On the flip side, ICICI Bank down by 0.97%, Maruti Suzuki down by 0.95%, Bajaj Auto down by 0.73%, Ultratech Cement down by 0.59% and Kotak Mahindra Bank down by 0.58% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said the target of mopping up Rs 1.75 lakh crore from disinvestments of some of the public sector companies, including LIC and BPCL during the current fiscal, is on track and groundwork is being prepared for the goal. On the COVID-19 pandemic, he said the impact of the second wave is lesser than that of the first one.  Further, he said robust GST collections, over Rs one lakh crore per month for eight months in a row shows that consumption is picking up indicating positive signal for growth.

He stated ‘There has to be a lot of work which is going on and this year there is actually a lot of emphasis on achieving these targets. Remember that Rs 1.75 lakh crore, a good part of it will be from LIC’s IPO (Initial Public Offering). Second is Bharat Petroleum (BPCL) privatisation. And these two together itself can account for a large part of (disinvestment target).’

The Centre budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, in the current fiscal year. The disinvestment plan includes strategic sale of IDBI Bank, BPCL, Shipping Corp, Container Corporation, Neelachal Ispat Nigam Ltd, among others, and also legislative amendments required for LIC IPO would be brought in 2021-22, Finance Minister Nirmala Sitharaman had said in her budget speech.

The CNX Nifty is currently trading at 15790.90, down by 23.80 points or 0.15% after trading in a range of 15786.90 and 15835.90. There were 23 stocks advancing against 26 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Power Grid Corp up by 1.51%, SBI Life Insurance up by 1.10%, Wipro up by 0.71%, Larsen & Toubro up by 0.70% and TCS up by 0.61%. On the flip side, Britannia Industries down by 1.17%, ICICI Bank down by 1.01%, Maruti Suzuki down by 0.95%, Hindalco down by 0.92% and JSW Steel down by 0.87% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 277.83 points or 0.96% to 28,770.19, Straits Times fell 31.20 points or 1.00% to 3,095.68, Hang Seng dropped 235.65 points or 0.81% to 29,032.65, Taiwan Weighted lost 39.17 points or 0.22% to 17,551.80, KOSPI declined 15.98 points or 0.48% to 3,285.91 and Shanghai Composite was down by 34.10 points or 0.95% to 3,572.27, while Jakarta Composite rose 26.35 points or 0.44% to 5,965.82.