Key gauges trade in red after RBI keeps repo rate unchanged

Indian equity benchmarks were trading in red terrain in morning deals, after the Reserve Bank of India (RBI) kept repo rate unchanged for seventh time straight and continued with an accommodative stance, citing the need to support ongoing growth recovery amid continued uncertainty and global financial market volatility. The central kept the repo rate unchanged at 4% and the reverse repo rate, the borrowing rate, unchanged at 3.35%. Traders remained cautious with Nobel laureate economist Abhijit Vinayak Banerjee apprehended that the impending third wave of the COVID-19 pandemic might adversely impact the GDP, and its growth rate might go down to 7 percent, even below the IMF's recent projection of 9.5 percent. However, losses remain capped as traders found some solace with Revenue Secretary Tarun Bajaj’s statement that Retro tax withdrawal bill  will give confidence to the investor community regarding India's stable tax regime. Finance Minister Nirmala Sitharaman introduced 'The Taxation Laws (Amendment) Bill, 2021' in the Lok Sabha that seeks to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets. On the global front, Asian markets were trading mostly lower as the spread of the Delta variant of the coronavirus across the region heightened worries about its economic recovery.

The BSE Sensex is currently trading at 54374.98, down by 117.86 points or 0.22% after trading in a range of 54348.69 and 54633.58. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.19%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Utilities up by 0.86%, Telecom up by 0.73%, PSU up by 0.56%, Oil & Gas up by 0.40% and Auto up by 0.36%, while Energy down by 0.95%, Metal down by 0.44%, Consumer Durables down by 0.22%, FMCG down by 0.14% and Basic Materials down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.21%, Maruti Suzuki up by 1.47%, Tech Mahindra up by 0.85%, NTPC up by 0.64% and Mahindra & Mahindra up by 0.59%. On the flip side, Reliance Industries down by 1.33%, Tata Steel down by 1.12%, Titan Co down by 1.01%, Nestle down by 0.98% and ITC down by 0.88% were the top losers.

Meanwhile, Rating agency ICRA in its latest report has said that domestic air passenger traffic jumped 57 percent to around 49 lakh in July 2021 as compared to June this year when it was about 31.1 lakh, reflecting a significant sequential as well as year-on-year growth amid a decline in coronavirus infections. As against June 2020, the growth is 132 percent.

According to the report, airlines' capacity deployment for July was around 90 per cent higher than July 2020. There were around 47,200 departures last month compared to 24,770 departures in the year-ago period. On a sequential basis, it said the number of departures in July 2021 were higher by around 49 per cent as COVID infections demonstrated a downward trajectory. For July 2021, the average daily departures were at around 1,500, significantly higher than the average daily departures of about 800 in July last year. In June this year, it was at about 1,100. The average number of passengers per flight during July 2021 was 104, against an average of 98 passengers per flight in June 2021.

The report noted that though the recovery continued in July 2021, there is continued stress on demand, driven largely by the second wave of the pandemic, limiting travel to only necessary travel, while both leisure and business travel have been curtailed due to various state-wide restrictions, despite the decline in infections. It also said rising Aviation Turbine Fuel (ATF) prices pose a near-term challenge for the airlines. 

The CNX Nifty is currently trading at 16249.55, down by 45.05 points or 0.28% after trading in a range of 16240.10 and 16336.75. There were 23 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.36%, Maruti Suzuki up by 1.40%, BPCL up by 1.27%, Indian Oil Corp. up by 1.25% and Tata Consumer Product up by 1.02%. On the flip side, Cipla down by 2.85%, Reliance Industries down by 1.72%, Shree Cement down by 1.32%, Titan Company down by 1.09% and ITC down by 1.07% were the top losers.

Asian markets were trading mostly lower; Taiwan Weighted dropped 58.09 points or 0.33% to 17,545.03, Shanghai Composite declined 19.71 points or 0.57% to 3,446.84, Hang Seng decreased 18.65 points or 0.07% to 26,186.04, KOSPI fell 9.00 points or 0.27% to 3,267.13 and Jakarta Composite lost 8.39 points or 0.14% to 6,197.03.
On the flip side, Straits Times advanced 5.33 points or 0.17% to 3,180.43 and Nikkei 225 surged 70.82 points or 0.26% to 27,798.94.