Key indices remain in red in morning deals

Indian equity benchmarks weakened further in morning deals, tracking losses in Tata Steel, HCL Technologies and Mahindra & Mahindra amid intense selloff in global markets. Traders remained cautious with Minister of State for Finance Bhagwat K Karad stating that the recovery as a percentage of gross non-performing assets moderated to 12.8 percent in 2020-21 from 15.8 percent in the previous fiscal year against the backdrop of the pandemic. Traders also took a note of Parliament informed that over Rs 81,000 crore GST compensation is due to states for 2020-21, while for April-May this year, Rs 55,345 crore is outstanding. The economic impact of the pandemic has led to higher compensation requirement due to lower GST collection and at the same time lower collection of GST compensation cess. Traders paid no heed towards Chief Economic Adviser (CEA) K V Subramanian 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. On the global front, Asian markets were trading in red as concerns over the resurgence of coronavirus cases in many countries and geopolitical worries sapped investors' appetite for riskier assets.

The BSE Sensex is currently trading at 52214.45, down by 338.95 points or 0.64% after trading in a range of 52190.92 and 52465.03. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.95%, while Small cap index down by 0.87%.

The only gaining sectoral index on the BSE was FMCG up by 0.11%, while Metal down by 2.46%, Telecom down by 1.82%, Power down by 1.54%, Realty down by 1.53% and Bankex down by 1.42% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.18%, Ultratech Cement up by 0.82%, Power Grid Corporation up by 0.73%, Hindustan Unilever up by 0.58% and Bajaj Auto up by 0.54%. On the flip side, Tata Steel down by 2.32%, HCL Technologies down by 2.31%, Mahindra & Mahindra down by 2.26%, Indusind Bank down by 2.24% and Bharti Airtel down by 2.17% were the top losers.

Meanwhile, Union minister Pankaj Chaudhary has said that Indian economy is showing signs of revival since the peaking of the second COVID wave in the first half of May on the back of targeted fiscal relief, strong push for capital expenditure, RBI's monetary policy measures, and a rapid vaccination drive. India's real Gross Domestic Product (GDP) is estimated to grow 0.5 percent in Q3 and 1.6 percent in Q4 of 2020-21, leading to an upward revision in annual real GDP growth from (-)8.0 percent (2nd advance estimates) to (-)7.3 percent.

The minister noted that the momentum of economic recovery was, however, moderated by the onset of the second wave of COVID. According to him, the government has formulated a multi-pronged strategy to ensure that the prices of essential commodities like pulses and oilseeds remain controlled. The strategy includes the issuance of orders imposing stock limits on pulses applicable to wholesalers, retailers, millers, and importers with effect from July 2 and increasing the number of price monitoring centers under the Price Monitoring Scheme.

Citing RBI's Monetary Policy Committee's (MPC) resolution on June 4, the minister said the rising trajectory of international commodity prices, especially of crude, together with logistics costs, pose upside risks to the inflation outlook. However, he said these cost pressures are expected to be mitigated by a normal south-west monsoon, comfortable buffer stocks, recent supply-side interventions in pulses market, declining caseload of COVID and gradual easing of movement restriction across states.

The CNX Nifty is currently trading at 15645.10, down by 107.30 points or 0.68% after trading in a range of 15635.30 and 15728.45. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 1.11%, Hindustan Unilever up by 0.84%, Ultratech Cement up by 0.65%, Power Grid Corporation up by 0.62% and Bajaj Auto up by 0.52%. On the flip side, Hindalco down by 2.95%, Tata Steel down by 2.66%, Indusind Bank down by 2.35%, Mahindra & Mahindra down by 2.29% and HCL Technologies down by 2.19% were the top losers.

Asian markets were trading in red; Hang Seng decreased 325.90 points or 1.19% to 27,163.88, Taiwan Weighted dropped 249.09 points or 1.4% to 17,540.16, KOSPI fell 20.51 points or 0.63% to 3,223.53, Shanghai Composite declined 17.55 points or 0.5% to 3,521.57 and Nikkei 225 slipped 243.89 points or 0.88% to 27,408.85.