Key indices trade marginally in green in late morning deals

Altering between positive and negative terrains, Indian equity benchmarks were now trading marginally in green in late morning deals tracking gains in index majors HCL Technologies, ICICI Bank and Ultratech Cement. Traders took some support with the Ministry of External Affairs stating that India has been in touch with the various countries regarding the possibility of import of vaccines to supplement domestic production. Traders also took a note of Deputy Governor T Rabi Sankar’s statement that the RBI is working on phased introduction of its own digital currency and is mulling pilot projects in wholesale and retail segments in the near future. However, gains remain capped as Former World Bank chief economist Kaushik Basu said that India's wholesale price-based inflation is at a 30-year high, leading to a very alarming situation for the country. He, however, doesn't see any risk of hyperinflation, but cautioned that if retail inflation follows wholesale prices, it might lead to ‘inflationary crisis’.

On the global front, Asian markets were trading mostly in red after a volatile week in which sentiment over global growth waxed and waned with every new headline on the Delta variant. Back home, on the sectoral front, steel industry stocks were buzzing as the government given green signal a Rs 6,322-crore production linked incentive (PLI) scheme. Information and Broadcasting Minister Anurag Thakur said that incentives worth Rs 6,322 crore will be provided over five years and it would create over 5.25 lakh jobs.

The BSE Sensex is currently trading at 52911.25, up by 74.04 points or 0.14% after trading in a range of 52653.77 and 53008.53. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.28%, while Small cap index up by 0.26%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.68%, Metal up by 0.64%, Bankex up by 0.52%, IT up by 0.44% and TECK up by 0.40%, while Capital Goods down by 0.69%, Industrials down by 0.59%, Power down by 0.48%, Utilities down by 0.25% and Healthcare down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.03%, ICICI Bank up by 1.26%, Ultratech Cement up by 1.15%, Maruti Suzuki up by 0.84% and Tata Steel up by 0.83%. On the flip side, Tech Mahindra down by 2.02%, Larsen & Toubro down by 1.54%, Sun Pharma down by 0.64%, NTPC down by 0.38% and HDFC down by 0.30% were the top losers.

Meanwhile, Former World Bank chief economist Kaushik Basu has said that India's wholesale price-based inflation is at a 30-year high, leading to a very alarming situation for the country. He, however, doesn't see any risk of hyperinflation, but cautioned that if retail inflation follows wholesale prices, it might lead to ‘inflationary crisis’.

Basu said ‘there is a big risk of inflation and actually one particular kind of inflation. If you look at wholesale price inflation in India. Right now it is at a 30-year high’. Basu also said generally wholesale price inflation seeps into retail price inflation, so that this is a very alarming situation for India because prices are rising quite rapidly.

Stating that India needs a much better curation of policy once again between the Reserve Bank of India and the finance ministry, he said, ‘I feel not enough is happening once again between the Treasury, the finance ministry and the central bank for the inflation.’ He cautioned that there is a big risk of inflation going to be higher, though not huge. He opined 'I don't think there's any risk of hyperinflation or anything like that in India’. He observed ‘but it can go higher and if the retail prices begin to follow the wholesale prices, it is a major inflationary crisis, already, because the poor people have been hit so badly by the crisis.’

The CNX Nifty is currently trading at 15843.25, up by 19.20 points or 0.12% after trading in a range of 15768.40 and 15876.45. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 2.01%, SBI Life Insurance up by 1.95%, Ultratech Cement up by 1.31%, ICICI Bank up by 1.27% and Wipro up by 1.12%. On the flip side, Tech Mahindra down by 2.04%, Tata Motors down by 1.97%, Larsen & Toubro down by 1.62%, Adani Ports &SEZ down by 1.28% and UPL down by 0.83% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 325.02 points or 1.17% to 27,398.82, Jakarta Composite lost 43.41 points or 0.71% to 6,094.14, Shanghai Composite declined 29.62 points or 0.83% to 3,545.11, Taiwan Weighted dropped 10.68 points or 0.06% to 17,561.65 and Straits Times trembled 3.66 points or 0.12% to 3,155.60. On the other hand, KOSPI rose 3.82 points or 0.12% to 3,254.03.