Domestic indices trade in red after slightly positive start

Indian equity benchmarks made slightly positive start on Friday but failed to hold the gains and slipped below neutral lines. Markets are trading lower with marginal cut in early deals due to selling in Power, Utilities and TECK stocks. Initially, some support came in as the India Meteorological Department (IMD) said Southwest Monsoon over the country is likely to be normal in July. Traders took note of report that the Reserve Bank of India (RBI) said a scheme providing interest subsidy for post and pre-shipment export credit has been extended by three months till September, a move that will provide relief to exporters. However, markets wiped out gains amid concerns as India recorded 43,360 infections and 796 fatalities in the last 24 hours. In just over five weeks, from May 23 to July 1, the country reported 100,000 deaths from Covid even as the second wave waned. Some cautiousness also came in as Reserve Bank Governor Shaktikanta Das said the second wave of the pandemic took a grievous toll on India, but the dented economic activity has started recovering from late-May.

On the global front, most of the Asian markets were trading higher following the broadly positive cues overnight from Wall Street on prospects of a strong global economic recovery after data showed improvement in manufacturing and jobless claims in the US. However, the surge in the delta variant of the coronavirus cases and travel curbs in several countries are capping the gains. Back home, bank stocks were in focus following the Financial Stability Report released by the Reserve Bank of India saying that the gross non-performing assets ratio of banks may rise to 9.8 percent by March 2022, from 7.48 percent in March 2021. In scrip specific development, NCC traded higher as it received five new orders totaling to Rs 2,149 crore in June.

The BSE Sensex is currently trading at 52256.25, down by 62.35 points or 0.12% after trading in a range of 52232.89 and 52436.83. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.03%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.69%, Realty up by 0.69%, Energy up by 0.46%, Basic Materials up by 0.44%, Consumer discretionary up by 0.33%, while Power down by 1.24%, Utilities down by 0.82%, TECK down by 0.70%, IT down by 0.66%, Capital Goods down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 0.80%, ICICI Bank up by 0.75%, Bajaj Finserv up by 0.69%, Reliance Industries up by 0.51% and Ultratech Cement up by 0.50%. On the flip side, TCS down by 1.20%, Infosys down by 1.02%, Power Grid Corp down by 0.56%, HDFC Bank down by 0.49% and HCL Technologies down by 0.42% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has said a special session of the GST Council will be held soon to discuss all compensation-related issues. Sitharaman also said that the flow of COVID-19 vaccination across the country will be well managed and all states will be taken care of.

She said 'every state gets the allocation of vaccines as per the intensity of the attack, density of the population and the number of vulnerable populations. The central government supplies it (vaccines), well in advance so that they can announce as to how much is being given, seven days prior...this happening every month.'

She stated ‘I have promised to hold a special session, in which we will discuss about, all GST compensation related issues.’ she said every state's compensation will be worked out. Talking about the kind of expenditure budgeted for the compensation, she said ‘I can’t tell you off the cuff. These are amounts which are determined based on the formula which was arrived at last year and that is the basis on which the distribution will start.

The CNX Nifty is currently trading at 15673.15, down by 6.85 points or 0.04% after trading in a range of 15658.15 and 15711.20. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 2.10%, Indian Oil Corp. up by 1.86%, Coal India up by 1.61%, ONGC up by 1.39% and Divi's Lab up by 1.03%. On the flip side, TCS down by 1.15%, Eicher Motors down by 1.00%, Infosys down by 0.94%, Tata Motors down by 0.67% and Britannia Industries down by 0.64% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 84.46 points or 0.29% to 28,791.50, Straits Times gained 1.86 points or 0.06% to 3,126.05, Taiwan Weighted rose 9.16 points or 0.05% to 17,723.10, KOSPI added 5.63 points or 0.17% to 3,287.69 and Jakarta Composite increased 27.11 points or 0.45% to 6,033.07. On the other hand, Hang Seng fell 457.63 points or 1.59% to 28,370.32 and Shanghai Composite was down by 56.55 points or 1.58% to 3,532.23.