Bears hold tight grip over Dalal Street

Bears were holding a tight grip over the Dalal Street, with both Sensex and Nifty trading in deep red. Negative cues from other Asian markets impacted domestic sentiments. Traders were worried, as the Asian Development Bank has downgraded India's economic growth forecast for the current financial year to 10 percent from 11 percent projected in April, on account of the adverse impact of the coronavirus pandemic. India's GDP growth recovered to 1.6 percent in the last quarter of the fiscal year ended March 2021, narrowing contraction in the whole fiscal year from 8 percent estimated in April to a revised 7.3 percent, the multilateral funding agency said in the Asian Development Outlook (ADO) Supplement.

On the global front, Asian markets were trading in red, after overall consumer prices in Japan were up 0.2 percent on year in June. The Ministry of Internal Affairs and Communications said that was in line with expectations following the 0.1 percent decline in May. Core consumer prices, which exclude volatile food prices, also gained an annual 0.2 percent. That too matched estimates following the 0.1 percent increase in the previous month.

The BSE Sensex is currently trading at 52125.31, down by 428.09 points or 0.81% after trading in a range of 52043.16 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 was down by 1.52%, while Small cap index was down by 1.86%.

The top losing sectoral indices on the BSE were Realty down by 2.39%, Metal down by 2.38%, Power down by 2.03%, Telecom down by 1.96% and Utilities down by 1.82%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.58%, Hindustan Unilever up by 1.01%, Asian Paints up by 0.98%, Bajaj Auto up by 0.60% and Nestle up by 0.55%. On the flip side, HCL Tech down by 2.47%, Indusind Bank down by 2.21%, Tata Steel down by 2.10%, Bharti Airtel down by 2.10% and ICICI Bank down by 2.09% were the top losers.

Meanwhile, ratings agency Crisil in its latest report has said that 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). It said ‘in our view, there could be a major shift in soybean, cotton and maize acreages across the rainfall deficit states if the monsoon fails to revive as forecast’. Since the onset of monsoon, rainfall in India has been 7 per cent lower than long period average (LPA).

On June 23, monsoon covered almost 93 per cent of kharif acreage - a week before its usual onset. However, the lull in monsoon over the past 15 days (up to 12 July) has weighed on the pace of kharif sowing. Further, it said cumulative sowing till July 16 was 12 per cent lower year-on-year attributable to the advancement in sowing last year. The current sowing is 4 per cent lower than normal (average of last five years). The India Meteorological Department (IMD) had forecast the revival of monsoon from July 10. But, in the last five days (July 12-16), rainfall has been 6 per cent lower than the LPA.

South India recorded 2 per cent lower than normal rainfall (June 23-July 12), while Telangana, Andhra Pradesh and Tamil Nadu received higher rains. Karnataka saw a 37 per cent deficit during this period, following which the state's total acreage reduced. As per the report, the east and northeast regions recorded rainfall that was 23 per cent lower than normal. However, this will not have a major impact as the sowing window for its key crop paddy will remain open over the next one month. That said, the monsoon trajectory needs to be monitored closely to understand its impact on kharif crops in marketing year 2021.

The CNX Nifty is currently trading at 15609.95, down by 142.45 points or 0.90% after trading in a range of 15584.50 and 15728.45. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 1.67%, Hindustan Unilever up by 1.15%, Asian Paints up by 0.93%, Bajaj Auto up by 0.62% and Nestle up by 0.58%. On the flip side, Hindalco down by 2.86%, HCL Tech. down by 2.51%, JSW Steel down by 2.38%, ONGC down by 2.31% and UPL down by 2.21% 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.