Markets trade near neutral lines in late morning session

Indian equity benchmarks were trading near their neutral lines in late morning session, despite positive cues from other Asian markets. Traders were cautious, amid a private report stating that business resumption activities, which had been gathering pace after the end of the second wave, moderated for the week ended July 25. The Nomura India Business Resumption Index declined to 95.3 from the previous week's high of 96.4, stressing that it continues to be above the pre-second wave levels.

On the global front, Asian markets were trading mostly in green after South Korea's gross domestic product climbed a seasonally adjusted 0.7 percent on quarter in the second quarter of 2021, the Bank of Korea said in Tuesday's advance estimate. That was in line with expectations following the 1.7 percent growth in the previous three months. Real gross domestic income (GDI) decreased by 0.6 percent compared to the previous quarter.

The BSE Sensex is currently trading at 52849.15, down by 3.12 points or 0.01% after trading in a range of 52827.98 and 53024.70. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index was up by 0.80%.

The top gaining sectoral indices on the BSE were Metal up by 2.02%, Realty up by 0.97%, Basic Materials up by 0.95%, Consumer Durables up by 0.57% and PSU up by 0.47%, while Healthcare down by 0.60%, Power down by 0.42%, Energy down by 0.38%, Utilities down by 0.36% and Oil & Gas down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.18%, Bajaj Finance up by 2.11%, SBI up by 1.94%, Bajaj Finserv up by 1.76% and Nestle up by 1.29%. On the flip side, Dr. Reddy's Lab down by 3.07%, Axis Bank down by 1.92%, HCL Tech down by 1.21%, Sun Pharma down by 1.19% and Kotak Mahindra Bank down by 1.17% were the top losers.

Meanwhile, Moody’s Analytics in its report titled ‘APAC Economic Outlook: The Delta Roadblock’ has said that the second wave of COVID-19 may have a more lasting damage on the Indian economy and exports will once again be the foundation for recovery. It said social distancing is weighing on the current quarter, but economic recovery will resume by the year-end. Delta variant of COVID-19 is among factors now adversely affecting economies of the Asia-Pacific (APAC) region, but the economic hit from the current round of movement restrictions in the region will not be as severe as the recessions in the second quarter of last year.

In India, where exports make up relatively small shares of the economy, high commodity prices have boosted the value of exports. This is one factor that helped reinvigorate India after its first devastating wave of COVID-19. It said ‘While its second wave, which is now coming to an end, may have more lasting damage to the economy as the pandemic’s one-two punch hit small enterprises very hard, exports will once again be the foundation for recovery’. With regard to vaccination, Moody’s Analytics said India is struggling to accelerate its pace of inoculation.

It also said the global economic recovery is continuing at a solid pace, but parts of Asia will not reflect this in the near term given heightened social distancing restrictions now in place, particularly in Southeast Asia as the Delta variant of COVID-19 spreads across the region. Moody’s Analytics said global GDP this year will be in the range of 5-5.5 per cent, well above its 3 per cent potential growth rate as recovery continues from last year’s pandemic recession. It added ‘Global trade continued its rapid recovery well into this year’s second quarter. Global industrial production also is still rising, although now at a slower pace than merchandise trade as tie-ups in global supply chains slow many manufacturing processes’.

The CNX Nifty is currently trading at 15835.35, up by 10.90 points or 0.07% after trading in a range of 15827.40 and 15881.55. There were 25 stocks advancing against 24 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Hindalco up by 4.61%, Tata Steel up by 2.22%, Bajaj Finance up by 2.13%, SBI Life Insurance up by 2.04% and SBI up by 1.93%. On the flip side, Dr. Reddy's Lab down by 3.11%, Axis Bank down by 1.96%, Cipla down by 1.50%, HCL Tech. down by 1.29% and Kotak Mahindra Bank down by 1.18% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 145.03 points or 0.52% to 27,978.32, KOSPI rose 20.21 points or 0.63% to 3,245.16, Straits Times advanced 15.77 points or 0.5% to 3,154.74 and Shanghai Composite gained 4.96 points or 0.14% to 3,472.40. On the flip side, Jakarta Composite lost 0.40 points or 0.01% to 6,105.99, Taiwan Weighted dropped 82.18 points or 0.47% to 17,321.38 and Hang Seng decreased 269.49 points or 1.03% to 25,922.83.