Markets continue to show sluggish trend in late afternoon session

Local equity benchmarks continued to show sluggish trend in late afternoon session. Sentiments remained down-beat after Indian manufacturing activity fell back into decline in the month of June, as the intensification of the pandemic and strict containment measures negatively impacted on demand. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - fell to 48.1 in June as against 50.8 in May. Traders overlooked Principal Economic Adviser (PEA) Sanjeev Sanyal’s statement 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.

On the global front, Asian markets were trading mostly in red despite another record close in New York, with investors keeping an eye on the rapidly spreading Delta virus variant, which has forced several governments to reimpose lockdowns and raised concerns about the pace of economic recovery. European markets were trading higher kicking off the second half of 2021 on a positive note as investors anticipate the continent’s economic recovery.

The BSE Sensex is currently trading at 52,395.04, down by 84.32 points or 0.17% after trading in a range of 52342.02 and 52638.50. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.01%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Auto up by 0.94%, Consumer discretionary up by 0.80%, FMCG up by 0.48%, Healthcare up by 0.41% and Bankex was up by 0.24%, while Power down by 1.23%, TECK down by 0.64%, IT down by 0.56%, Telecom down by 0.39% and Capital Goods was down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.96%, Sun Pharma up by 1.15%, Dr. Reddy's Lab up by 1.13%, Asian Paints up by 0.95% and SBI up by 0.89%. On the flip side, Bajaj Finserv down by 1.43%, Infosys down by 1.18%, Ultratech Cement down by 0.96%, Tech Mahindra down by 0.85% and Larsen & Toubro down by 0.78% were the top losers.

Meanwhile, the growth of eight core infrastructure industries grew by 16.8 percent in May 2021 as compared to same month last year, mainly due to a low base effect and uptick in production of natural gas, refinery products, steel, cement and electricity. The eight infrastructure sectors had contracted by 21.4 percent in May 2020 due to the lockdown restrictions imposed to control the spread of the COVID-19 infections. In March this year, these key sectors had recorded a growth of 11.4 percent, and 60.9 percent in April. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).  

Among eight core sectors, Coal production having 10.33 percent weight increased by 6.9 percent in May, 2021 over May, 2020 and its cumulative index increased by 8.2 percent during April to May, 2021-22 over corresponding period of the previous year. Natural Gas production having 6.88 percent weight increased by 20.1 percent in May, 2021 over May, 2020 and its cumulative index increased by 22.5 per cent during April to May, 2021-22 over the corresponding period of previous year. Petroleum Refinery production having 28.04 percent weight increased by 15.3 percent in May, 2021 over May, 2020 and its cumulative index increased by 22.8 per cent during April to May, 2021-22 over the corresponding period of previous year.

Steel production having 17.92 percent weight increased by 59.3 percent in May, 2021 over May, 2020 and its cumulative index increased by 149.5 per cent during April to May, 2021-22 over the corresponding period of previous year. Cement production having 5.37 percent weight increased by 7.9 percent in May, 2021 over May, 2020 and its cumulative index increased by 100.4 per cent during April to May, 2021-22 over the corresponding period of previous year. Electricity generation having 19.85 percent weight increased by 7.3 percent in May, 2021 over May, 2020 and its cumulative index increased by 21.5 per cent during April to May, 2021-22 over the corresponding period of previous year.

On the flip side, Crude Oil production having 8.98 percent weight declined by 6.3 percent in May, 2021 over May, 2020 and its cumulative index declined by 4.2 per cent during April to May, 2021-22 over the corresponding period of previous year. Fertilizers production having 2.63 percent weight decreased by 9.6 percent in May, 2021 over May, 2020 and its cumulative index decreased by 3.9 per cent during April to May, 2021-22 over the corresponding period of previous year.

The CNX Nifty is currently trading at 15,703.40, down by 18.10 points or 0.12% after trading in a range of 15685.35 and 15755.55. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 1.91%, Hindalco up by 1.83%, Tata Motors up by 1.63%, Sun Pharma up by 1.20% and Dr. Reddy's Lab up by 1.09%. On the flip side, Shree Cement down by 1.86%, Bajaj Finserv down by 1.56%, Wipro down by 1.25%, Infosys down by 1.16% and Ultratech Cement down by 1.01% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 166.15 points or 0.57% to 28,827.95, Nikkei 225 slipped 84.49 points or 0.29% to 28,707.04, Taiwan Weighted dropped 41.52 points or 0.23% to 17,713.94, KOSPI fell 14.62 points or 0.44% to 3,282.06, Shanghai Composite declined 2.42 points or 0.07% to 3,588.78 and Straits Times was down by 1.72 points or 0.05% to 3,128.74. On the flip side, Jakarta Composite was up by 20.47 points or 0.34% to 6,005.96.

European markets were trading higher, UK’s FTSE 100 increased 85.97 points or 1.22% to 7,123.44, France’s CAC increased 62.24 points or 0.96% to 6,570.07 and Germany’s DAX was up by 164.47 points or 1.06% to 15,695.51.