Domestic markets trade flat in early deals

Indian equity benchmarks made cautious start on Thursday, amid weakness in Asian peers. Markets are hovering near neutral lines and trading flat in early deals. Investors are eyeing the Q1FY22 earnings season which will kick start from today with TCS results, to guide the market trajectory. Rising coronavirus cases weighted down on market sentiments. India recorded a spike of 45,196 new infections, taking the total caseload to 30,708,092, according to Worldometer. Adding some pessimism, Fitch Ratings cut India's growth forecast to 10 per cent for the current fiscal, from 12.8 per cent estimated earlier, due to slowing recovery post second wave of COVID-19, and said rapid vaccination could support a sustainable revival in business and consumer confidence. However, downside remained capped as Commerce and Industry Minister Piyush Goyal called for a services trade agreement among friendly nations of the Indo-Pacific region as it can help liberalise domestic regulations and build capacity in sectors like e-commerce and IT.

On the global front, most of the Asian markets were trading lower ignoring the positive cues overnight from Wall Street, as traders remained cautious amid mounting fears over the fresh wave of COVID-19 infections in several markets. More countries might look to impose stricter restrictions if the spread of the virus does not show signs of slowing, raising concerns about the pace of global economic rebound.

Back home, select banking stocks were in focus as the Reserve Bank of India (RBI) imposed a monetary penalty on 14 banks, including State Bank of India (SBI), Bandhan Bank, IndusInd Bank, Bank of Baroda (BoB), Central Bank for non-compliance with certain provisions of directions issued by them. The penalty ranges from Rs 50 lakh to Rs 2 crore, with SBI being charged Rs 50 lakh and BoB Rs 2 crore. In scrip specific development, Bajaj Healthcare traded higher as it received a licence from the Defence Research and Development Organisation (DRDO) to manufacture and market 2-Deoxy-D-Glucose (2-DG) as approved medication for the treatment of COVID-19 patients.

The BSE Sensex is currently trading at 53072.40, up by 17.64 points or 0.03% after trading in a range of 53002.84 and 53103.03. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.46%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Utilities up by 1.25%, Power up by 0.68%, IT up by 0.62%, Realty up by 0.59%, TECK up by 0.55%, while Metal down by 0.38%, Energy down by 0.17%, Oil & Gas down by 0.14%, Auto down by 0.10%, Basic Materials down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.20%, Indusind Bank up by 0.99%, NTPC up by 0.77%, Titan Company up by 0.75% and Power Grid Corp up by 0.74%. On the flip side, Bajaj Auto down by 1.96%, Ultratech Cement down by 0.93%, Hindustan Unilever down by 0.62%, HDFC Bank down by 0.43% and Sun Pharma down by 0.39% were the top losers.

Meanwhile, Fitch Ratings in its latest report said that It has cut India's growth forecast to 10 per cent for the current financial year (FY22), from 12.8 per cent estimated earlier, due to slowing recovery post-second wave of COVID-19. It said the challenges for the banking sector posed by the coronavirus pandemic have increased due to a virulent second wave in the first quarter of the financial year ending March 2022 (FY22). 

The global rating agency said ‘It revised down India's real GDP for FY22 by 280bp to 10 per cent, underlining our belief that renewed restrictions have slowed recovery efforts and left banks with a moderately worse outlook for business and revenue generation in FY22.’ Besides, it believes that rapid vaccination could support a sustainable revival in business and consumer confidence; however, without it, economic recovery would remain vulnerable to further waves and lockdowns.

It said localized lockdowns during the second wave kept economic activity from stalling to levels similar to those during 2020, but disruption in several key business centers has slowed the recovery and dented its expectations of a rebound to pre-pandemic levels by FY22. India's economy contracted 23.9 per cent in the June quarter of 2020. Fitch views India's rebound potential to be better than most comparable 'BBB-' peers because it does not expect a structurally weaker real GDP growth outlook.

The CNX Nifty is currently trading at 15875.60, down by 4.05 points or 0.03% after trading in a range of 15849.90 and 15885.75. There were 26 stocks advancing against 23 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Shree Cement up by 1.11%, Tech Mahindra up by 0.94%, IOC up by 0.93%, Indusind Bank up by 0.86% and Wipro up by 0.84%. On the flip side, Bajaj Auto down by 2.01%, Tata Motors down by 1.32%, Hindalco down by 1.16%, JSW Steel down by 1.06% and ONGC down by 1.00% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 200.01 points or 0.71% to 28,166.94, Straits Times lost 16.87 points or 0.54% to 3,124.73, Hang Seng plunged 566.66 points or 2.03% to 27,393.96, Taiwan Weighted fell 6.23 points or 0.03% to 17,844.46, KOSPI declined 21.08 points or 0.64% to 3,264.26 and Shanghai Composite was down by 20.09 points or 0.57% to 3,533.63, while Jakarta Composite rose 14.70 points or 0.24% to 6,058.74.