Key gauges trade with minor cut in morning deals

Fluctuating between gains and losses, Indian equity benchmarks were now trading marginally in red in Thursday's morning deals amid a weak trend in Asian peers and foreign fund outflow. Traders got anxious as India's manufacturing activity contracted in June for the first time in 11 months, as cautious consumer sentiment following the devastating second wave of the coronavirus pandemic forced producers to reduce factory output. The contraction came despite states easing lockdown restrictions. Data released by data analytics firm IHS Markit showed purchasing managers’ index (PMI) for manufacturing sector dropped to 48.1 in June from 50.8 in May. However, losses remain capped as some support came with data showing that the output of eight core sectors grew by 16.8 per cent in May, mainly due to a low base effect and uptick in production of natural gas, refinery products, steel, cement and electricity. Meanwhile, the Controller General of Accounts (CGA) in its latest data has showed that the central government's fiscal deficit stood at Rs 1.23 lakh crore or 8.2 per cent of the full year's Budget Estimate (BE) at end-May 2021.

On the global front, Asian markets were trading mostly in red as investors awaited a much watched US jobs for indications of how the recovery from the pandemic is faring. Back home, on the sectoral front, banking industry’s stocks were in limelight as Standard and Poor's (S&P) said Indian banks face systemic risks as the country wades through the aftermath of the Covid-19 second wave. A separate report stated that banks will now have to surrender current accounts of all companies or corporate borrowers, where their loan exposure is less than 10 percent of the total approved facilities.

The BSE Sensex is currently trading at 52404.62, down by 78.09 points or 0.15% after trading in a range of 52404.32 and 52638.50. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.08%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Auto up by 0.65%, Consumer Disc up by 0.47%, Metal up by 0.33%, Realty up by 0.31% and Healthcare up by 0.28%, while Power down by 1.14%, Utilities down by 0.49%, TECK down by 0.48%, IT down by 0.43% and Telecom down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.70%, Mahindra & Mahindra up by 1.17%, Kotak Mahindra Bank up by 0.73%, Sun Pharma up by 0.55% and Asian Paints up by 0.33%. On the flip side, Larsen & Toubro down by 0.95%, Indusind Bank down by 0.87%, Tech Mahindra down by 0.79%, Ultratech Cement down by 0.77% and Infosys down by 0.72% were the top losers.

Meanwhile, Principal Economic Adviser (PEA) Sanjeev Sanyal has said that the India’s Gross domestic product (GDP) is likely to witness close to double-digit growth in the current fiscal year (FY22) despite the second COVID-19 wave ravaging the country. He said the economy is slowly getting back to normalcy as the number of COVID-19 cases is declining.

Sanyal has stated that the growth will be bolstered by a slew of structural reforms undertaken by the government to address supply side constraints and opening more and more sectors for foreign investment. He also said ‘Most countries were focused on demand side measures (but) we were also focussed on supply side...virtually every week you will see new sectors being opened up. We have done major reforms in IT sector, BPO sector, geospatial sector and we can open up many other sectors because we want to be a part of the global supply chain.’

It is to be noted that many global and domestic institutions, including the World Bank and Reserve Bank of India (RBI) have slashed India's growth forecast for 2021-22 as economic recovery was halted by the devastating second wave of coronavirus infections. Earlier, the World Bank slashed its 2021-22 GDP growth forecast for India to 8.3 per cent from 10.1 per cent estimated in April, while RBI lowered it from 10.5 per cent to 9.5 per cent.

The CNX Nifty is currently trading at 15705.60, down by 15.90 points or 0.10% after trading in a range of 15703.05 and 15755.55. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 1.72%, Mahindra & Mahindra up by 1.19%, Tata Motors up by 0.96%, Hindalco up by 0.85% and Kotak Mahindra Bank up by 0.83%. On the flip side, Shree Cement down by 1.01%, Indusind Bank down by 0.91%, Tech Mahindra down by 0.91%, Ultratech Cement down by 0.83% and BPCL down by 0.78% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 118.43 points or 0.41% to 28,673.10, KOSPI fell 14.20 points or 0.43% to 3,282.48, Jakarta Composite lost 5.45 points or 0.09% to 5,980.04 and Shanghai Composite declined 2.65 points or 0.07% to 3,588.55.

On the flip side, Straits Times advanced 1.50 points or 0.05% to 3,131.96 and Taiwan Weighted strengthened 6.10 points or 0.03% to 17,761.56.