Sensex, Nifty remain in deep red

Indian equity benchmarks remained lower in late morning session, with both Sensex and Nifty trading in deep red. Negative cues from other Asian markets impacted sentiments over the street. Traders remained worried, as the International Monetary Fund (IMF) has cut India's gross domestic product (GDP) growth forecast to 9.5 percent for the fiscal year to March 31, 2022 as the onset of a severe second COVID-19 wave cut into recovery momentum. This forecast for 2021-22 is lower than the 12.5 per cent growth in GDP that IMF had projected in April before the second wave took a grip. For 2022-23, it expects economic growth of 8.5 per cent, larger than the 6.9 per cent it had projected in April.

On the global front, Asian markets were trading in red, after Japan's services producer prices grew at a slower pace in June, the Bank of Japan reported on Tuesday. The services producer price index rose 1.4 percent year-on-year in June, slightly slower than the 1.5 percent increase seen in May. On a monthly basis, the services PPI edged up 0.1 percent, offsetting a 0.1 percent drop in the previous month.

The BSE Sensex is currently trading at 52062.64, down by 516.12 points or 0.98% after trading in a range of 51802.73 and 52673.69. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.88%, while Small cap index was down by 1.10%.

The only gaining sectoral index on the BSE was Telecom up by 0.11%, while Realty down by 1.67%, Utilities down by 1.53%, Bankex down by 1.52%, Power down by 1.48% and Energy down by 1.28% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 0.94%, Bajaj Finserv up by 0.92%, Hindustan Unilever up by 0.59%, Titan Co up by 0.43% and Bharti Airtel up by 0.23%. On the flip side, Dr. Reddy's Lab down by 3.13%, Axis Bank down by 2.36%, Mahindra & Mahindra down by 2.17%, HDFC Bank down by 2.07% and Kotak Mahindra Bank down by 2.04% were the top losers.

Meanwhile, Chemicals and Fertilisers Minister Mansukh Mandaviya said the production linked incentive scheme (PLI) for pharmaceutical products has export generation potential of Rs 1,96,000 crore over a period of six years. The government had approved the PLI scheme for pharmaceuticals on February 24, 2021. He said ‘The scheme estimated the export generation potential of Rs 1,96,000 crore over a period of six years in all the three categories of products under the scheme, which includes high-value products as well’.

He added the PLI scheme estimated the investment potential of around Rs 15,000 crore and the generation of the employment potential of 20,000 direct and 80,000 indirect jobs as a result of the growth in the sector over the period of the scheme. The minister noted that currently, low-value generic drugs account for the major component of Indian exports.

He noted that the scheme incentivises the manufacturing of patented drugs and other high-value drugs at an incentive rate of 10 per cent of incremental sales, which is the highest among the product categories under the scheme. On June 1 this year, the government had issued operational guidelines for the PLI scheme for the pharmaceutical industry to enhance India's manufacturing capabilities by increasing investment and production in the sector. Earlier, the Department of Pharmaceuticals had notified the scheme with an outlay of Rs 15,000 crore.

The CNX Nifty is currently trading at 15591.05, down by 155.40 points or 0.99% after trading in a range of 15513.45 and 15767.50. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 1.47%, SBI Life Insurance up by 0.96%, Bajaj Finserv up by 0.90%, Indusind Bank up by 0.87% and Hindustan Unilever up by 0.61%. On the flip side, Dr. Reddy's Lab down by 3.06%, Axis Bank down by 2.47%, Mahindra & Mahindra down by 2.17%, Tata Motors down by 2.13% and Kotak Mahindra Bank down by 2.12% were the top losers.

Asian markets were trading in red; Nikkei 225 slipped 471.63 points or 1.69% to 27,498.59, KOSPI fell 20.84 points or 0.64% to 3,211.69, Straits Times trembled 7.80 points or 0.25% to 3,131.01, Shanghai Composite declined 20.10 points or 0.59% to 3,361.08, Jakarta Composite lost 9.28 points or 0.15% to 6,087.77, Taiwan Weighted dropped 248.50 points or 1.44% to 17,021.37 and Hang Seng decreased 59.27 points or 0.24% to 25,027.16.