Benchmarks extend opening losses; trade half a percent lower in early deals

Indian equity benchmarks extended their previous session’s losses with negative start on Tuesday following sell-off in the global peers. Markets enlarged their losses and are trading lower with cut of over half a percent each in early deals. All the sector indices were trading in red led by Metal, Power and Bankex, except FMCG. Traders choose to remain on the sidelines ahead of the market holiday on Wednesday on account of Bakri-Id. Traders were concerned with a private report that investments by private equity and venture capital funds declined by 22 per cent to $5.4 billion in June, as compared to the $6.9 billion in the year-ago period. Some cautiousness also came in as ratings agency Crisil said the lull in monsoon over the past 15 days up to July 12 has impacted pace of sowing of kharif crops in 2021-22 crop year (July-June). Traders overlooked Union minister Pankaj Chaudhary’s statement that Indian economy is showing signs of revival since the peaking of second COVID wave in the first half of May on the back of targeted fiscal relief, strong push for capital expenditure, and a rapid vaccination drive. Meanwhile, at 29,424, daily Covid-19 cases in India fell below the 30,000-mark to its lowest count in 125 days while the deaths from the virus dipped to a 111-day low of 373.

On the global front, Asian markets were trading lower with most markets also extending the losses of the previous session, following the broadly negative cues from Wall Street overnight, as signs of growing inflationary pressures and the surge in spread of the delta variant of coronavirus in many countries raised concerns that the pace of global economic recovery might slowdown significantly. Markets in Malaysia, Singapore and Indonesia are closed on account of Eid-ul-Adha.

Back home, aviation industry stocks were in focus as the country's aviation regulator said around 31.13 lakh domestic passengers travelled by air in June, 47 per cent higher than the 21.15 lakh who travelled in May. According to the Directorate General of Civil Aviation (DGCA), 57.25 lakh people had travelled within the country by air in April. In scrip specific development, ACC traded higher as it reported a higher profit at Rs 533.8 crore in Q2CY21 against Rs 268 crore in the corresponding period last year. Revenue jumped 49.4 percent to Rs 3,884.8 crore from Rs 2,600.8 crore YoY.

The BSE Sensex is currently trading at 52258.92, down by 294.48 points or 0.56% after trading in a range of 52190.92 and 52465.03. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.60%, while Small cap index was down by 0.59%.

The only gaining sectoral index on the BSE was FMCG up by 0.15%, while Metal down by 1.31%, Power down by 1.28%, Bankex down by 1.22%, Realty down by 1.17%, Telecom down by 1.16% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.00%, Power Grid Corp up by 0.92%, Bajaj Auto up by 0.82%, Maruti Suzuki up by 0.59% and Hindustan Unilever up by 0.48%. On the flip side, HCL Technologies down by 2.11%, HDFC Bank down by 1.99%, Bharti Airtel down by 1.37%, ICICI Bank down by 1.25% and Mahindra & Mahindra down by 1.21% were the top losers.

Meanwhile, in spite of the second wave of COVID-19, Chief Economic Adviser (CEA) K V Subramanian has expressed hope that economic growth during the current financial year (FY22) would be around 11 per cent as projected in the latest Economic Survey. He also said the overall impact of the second wave on the economy will not be very large. The Economic Survey 2020-21, released in January this year, had projected GDP growth of 11 per cent during the current financial year ending March 2022. The Survey had said growth will be supported by supply-side push from reforms and easing of regulations, push for infrastructural investments, boost to manufacturing sector through the Production-Linked Incentive (PLI) schemes, recovery of pent-up demand, increase in discretionary consumption subsequent to rollout of vaccines and pick up in credit given adequate liquidity and low interest rates.

He stated ‘we will grow at a high growth rate this year. This year growth will be from the lower base but we anticipate 6.5-7 per cent growth next year FY'23 and from thereon, growth accelerating even further.’ he said growth will be aided by various structural reforms, including labour and farm laws, undertaken by the government.

Recalling the various seminal reforms introduced in 1991, he said they propelled Indian economy to a high-growth trajectory. He also said future growth would take place without runaway inflation as India has removed various supply-side friction points through structural reforms during the pandemic. With regard to meeting the Budget target, he said infrastructure spending announced will be met and the finance minister exhorted various PSUs to frontload their capital expenditure plans. The Union Budget for 2021-22 has provided a capital outlay of Rs 5.54 lakh crore, an increase of 34.5 per cent over the Budget Estimate of 2020-21.

The CNX Nifty is currently trading at 15649.60, down by 102.80 points or 0.65% after trading in a range of 15645.40 and 15728.45. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Shree Cement up by 1.08%, Power Grid Corp up by 0.99%, Bajaj Auto up by 0.71%, Hindustan Unilever up by 0.68% and Ultratech Cement up by 0.65%. On the flip side, HCL Tech. down by 2.27%, Hindalco down by 2.08%, HDFC Bank down by 2.00%, Cipla down by 1.68% and Bharti Airtel down by 1.60% were the top losers.

Asian markets were trading in red; Nikkei 225 declined 274.55 points or 0.99% to 27,378.19, Hang Seng plunged 325.90 points or 1.19% to 27,163.88, Taiwan Weighted slipped 223.02 points or 1.25% to 17,566.23, KOSPI fell 20.89 points or 0.64% to 3,223.15 and Shanghai Composite was down by 17.55 points or 0.50% to 3,521.57.