Key indices add losses in morning deals

Indian equity benchmarks added losses in morning deals, amid brisk selling in frontline bluechip counters and mixed global cues. Traders remained cautious with Rating agency Moody's statement that the asset quality risks for banks will rise in most parts of ASEAN and India, as the region battles new waves of coronavirus infections amid low vaccination rates. Some concern also came as analysis by Care Ratings stating that as more and more states continue to borrow less from the markets, cost of their market borrowing fell by 11 bps to a two-month low of 6.87 per cent at Tuesday's auction when eight states drew down just Rs 12,100 crore. Meanwhile, Rajya Sabha informed that nearly 0.7 per cent of the GDP was spent every year on research and development, including strengthening of science and technology infrastructure. On the global front, Asian markets were trading mixed after the U.S. Senate passed a $1 trillion bipartisan infrastructure package. However, traders remained concerned about the rapid spread of the delta variant of the coronavirus in the region.

The BSE Sensex is currently trading at 54354.27, down by 200.39 points or 0.37% after trading in a range of 54303.97 and 54758.74. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.72%, while Small cap index was down by 2.73%.

The few gaining sectoral indices on the BSE were Metal up by 1.29%, TECK up by 0.10% and IT up by 0.01%, while Realty down by 2.59%, Healthcare down by 2.25%, Consumer Disc down by 1.71%, Consumer Durables down by 1.71% and Industrials down by 1.70% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corp up by 2.03%, NTPC up by 1.49%, Tata Steel up by 1.26%, HCL Technologies up by 1.25% and TCS up by 0.58%. On the flip side, Bajaj Auto down by 2.30%, Sun Pharma down by 2.16%, Dr. Reddy's Lab down by 1.28%, Bajaj Finance down by 1.19% and Kotak Mahindra Bank down by 1.11% were the top losers.

Meanwhile, the finance ministry in its latest Monthly Economic Review has said that the economic impact of the second wave of the COVID-19 pandemic is likely to be muted and there are visible signs of economic rejuvenation. It said the robust recovery in tax collections cushions the fisc towards meeting the budgeted support to the economy. It also said the recent sero-prevalence results signify that India can reduce the likelihood of severe illness due to COVID-19 if the country sustains the momentum of the vaccination programme.

The ministry said having antibodies reduces the probability of acquiring serious illnesses, as is borne by studies. So, any subsequent waves are expected to be mild in terms of severity of disease. However, it is imperative that COVID-appropriate behaviour and due protocol is followed. At this juncture, it said, the economy and society are at a crucial inflection point where sustenance of economic recovery, vaccination progress and COVID-19 appropriate behavioural strategies are needed in close synergy with each other.

The report further said with the second wave abating in most parts of the country and state governments lifting the restrictions in phases, there are visible signs of economic rejuvenation since the second half of May. It said this resonates with the economic impact of the second wave expected to be muted. Noting that inflation has remained above the band of six per cent in May and June, it said these pressures are likely to smoothen out in the coming months, with easing of restrictions, progress of southwest monsoon, and recent supply-side policy interventions in pulses and oilseeds market.

The CNX Nifty is currently trading at 16215.25, down by 64.85 points or 0.40% after trading in a range of 16204.90 and 16338.75. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Power Grid Corp up by 2.09%, JSW Steel up by 2.00%, Hindalco up by 1.65%, Tata Steel up by 1.38% and NTPC up by 1.36%. On the flip side, Bajaj Auto down by 2.32%, Sun Pharma down by 2.17%, Cipla down by 2.03%, Shree Cement down by 1.98% and Tata Consumer Product down by 1.80% were the top losers.

Asian markets were trading mixed; Taiwan Weighted dropped 202.26 points or 1.17% to 17,121.38, Straits Times trembled 21.72 points or 0.68% to 3,185.64 and KOSPI fell 18.31 points or 0.56% to 3,224.88. On the flip side, Shanghai Composite gained 9.55 points or 0.27% to 3,539.48, Hang Seng increased 55.42 points or 0.21% to 26,661.04 and Nikkei 225 surged 144.23 points or 0.52% to 28,032.38.