Key indices trade flat with negative bias in morning deals

Indian equity benchmarks were trading flat with a negative bias in morning deals, amid a broader fall in Asian stocks on U.S. inflation concerns, while investors awaited results from Infosys. Traders remained cautious with rising coronavirus cases in the country. India has recorded a spike of 40,215 fresh Covid-19 cases in the last 24 hours, taking the total caseload to 30,944,949, according to Worldometer. The death count increased to 411,439 with 623 new fatalities, the data showed. Besides, Lav Agarwal, joint secretary in the health ministry, said people talk about the third wave as a weather update but fail to understand that adherence to Covid-appropriate behaviour or the lack of it is what will prevent or cause any future waves. However, traders found some support with report that the government may extend the scheme for investment promotion 2017-20, with an aim to attract investors and promote economic growth of the country. Meanwhile, Finance Secretary T V Somanathan has underlined the need for improving the fiscal position of the government through reforms in farm, food and fertilizer subsidies so that additional funds can be generated for development of infrastructure and education system.

On the global front, Asian markets were trading mostly in red following the broadly negative cues from Wall Street after data showing the biggest jump in US inflation in 13 years fuelled some market expectations that the Federal Reserve could exit pandemic-era stimulus earlier than previously thought. Traders remain concerned amid the recent acceleration in the new wave of coronavirus cases. Back home, on the sectoral front, power stocks remained in action as rating agency Icra said demand for electricity in India is expected to grow 6 per cent in 2021-22 as compared to the previous fiscal year. It has also estimated power generation capacity addition at 17- 18 GW for the ongoing fiscal year.

The BSE Sensex is currently trading at 52735.19, down by 34.54 points or 0.07% after trading in a range of 52611.97 and 52801.44. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.25%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were IT up by 1.15%, TECK up by 0.94%, Capital Goods up by 0.54%, Industrials up by 0.29%, Healthcare up by 0.24% while, FMCG down by 0.38%, Energy down by 0.31%, Bankex down by 0.29%, Auto down by 0.16%, Realty down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 2.09%, HCL Tech. up by 1.78%, Sun Pharma up by 1.05%, Larsen & Toubro up by 1.02% and Infosys up by 0.86%. On the flip side, HDFC down by 1.00%, Hindustan Unilever down by 0.84%, Maruti Suzuki down by 0.81%, Nestle down by 0.76% and ICICI Bank down by 0.65% were the top losers.

Meanwhile, S&P Global Ratings has affirmed India's sovereign rating at the lowest investment grade of 'BBB-' for the 14th year in a row with a stable outlook, and said that the country's strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months. It stated that the sovereign credit ratings on India reflect the economy's above-average long-term real GDP growth, sound external profile, and evolving monetary settings.

It also said India's democratic institutions promote policy stability and compromise, and also underpin the ratings. These strengths are balanced against vulnerabilities stemming from the country's low per capita income and weak fiscal settings, including consistently elevated general government deficits and indebtedness. It has forecast economic activity in India to begin to normalise throughout the remainder of fiscal 2022, resulting in real GDP growth of about 9.5 per cent. It noted that a significant proportion of this rebound will be due to the very weak base in the prior fiscal year, when the economy contracted by a record 7.3 per cent.

S&P further said India's fiscal settings are weak, and deficits will remain elevated over the coming years even as the government undertakes some consolidation. The country's strong external settings help buffer the risks associated with the government's high deficits and debt stock, S&P said while affirming 'BBB-' long-term and 'A-3' short-term unsolicited foreign and local currency sovereign ratings on India.

The CNX Nifty is currently trading at 15812.05, down by 0.30 points after trading in a range of 15764.20 and 15812.75. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.03%, HCL Technologies up by 1.86%, Wipro up by 1.55%, Sun Pharma up by 1.16% and Larsen & Toubro up by 1.13%. On the flip side, HDFC down by 0.91%, Maruti Suzuki down by 0.90%, Hindustan Unilever down by 0.85%, Nestle down by 0.81% and UPL down by 0.70% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 161.94 points or 0.58% to 27,801.47, Nikkei 225 slipped 95.67 points or 0.33% to 28,622.57, KOSPI fell 12.03 points or 0.37% to 3,259.35, Shanghai Composite declined 29.26 points or 0.82% to 3,537.26, Straits Times trembled 5.54 points or 0.17% to 3,161.27, Taiwan Weighted dropped 20.64 points or 0.12% to 17,826.88 and Jakarta Composite lost 50.35 points or 0.84% to 5,961.68.