Indices trade flat with negative bias in early deals

Indian equity benchmarks made slightly positive start on Tuesday amid mixed Asian cues. But, soon markets give up their gains and slipped into red territory. Now, indices are trading flat with negative bias in early deals due to selling in Realty, Bankex and Power stocks. Whereas, buying in FMCG, Metal and Consumer Durables counters limited the downside. Traders were concerned as India reported 31,222 new cases of Covid-19 and 290 deaths from the disease in 24 hours. Some cautiousness came in as a private report projected a real gross value added (GVA) growth of 7 to 8 per cent year-on-year in the second quarter of current fiscal year versus 20.1 per cent growth in 1Q FY22. It said estimates suggest some moderation in economic activity index (EAI)-GVA growth in July, largely on account of weaker fiscal spending. Traders took note of a private report that industries have raised red flags over fresh notices being issued denying input tax credit (ITC), alleging wrongful claims, in turn leading to hardships for businesses. Meanwhile, Capitals markets regulator SEBI (Securities and Exchange Board of India) has banned 85 entities from capital markets for up to one year for fraudulent trading practices.

On the global front, Asian markets are trading mixed following the absence of fresh cues from Wall Street, which was closed overnight for a holiday, as investors continued to track updates about the spread in the delta variant of the coronavirus in the region, and the latest batch of economic data from the region. Back home, aviation industry stocks were in focus as credit ratings agency ICRA said domestic air passenger traffic continued on the growth trajectory in August with volumes growing up to 31 per cent to 66 lakh over the previous month, helped by higher capacity deployment and a downward trend in the pandemic.  In scrip specific development, BPCL came under pressure as Fitch Ratings said uncertainty over the bidder consortiums and process complexity, including valuation, may lead to potential delays in privatisation of BPCL.

The BSE Sensex is currently trading at 58264.29, down by 32.62 points or 0.06% after trading in a range of 58174.70 and 58459.70. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.07%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were FMCG up by 0.65%, Metal up by 0.44%, Consumer Durables up by 0.43%, Energy up by 0.40%, Consumer discretionary up by 0.33%, while Realty down by 1.28%, Bankex down by 0.76%, Power down by 0.63%, Utilities down by 0.53%, Oil & Gas down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.18%, ITC up by 0.96%, Maruti Suzuki up by 0.77%, Reliance Industries up by 0.76% and Tata Steel up by 0.68%. On the flip side, Axis Bank down by 1.54%, Kotak Mahindra Bank down by 1.09%, Sun Pharma down by 1.00%, ICICI Bank down by 0.79% and SBI down by 0.59% were the top losers.

Meanwhile, CRISIL in its latest report has found that the target of 36 per cent rise in capex by 21 states - accounting for 90 per cent of aggregate state capital expenditure - for 2021-22 year-on-year as ambitious. Rather, it expected an 11-13 per cent rise in capex by these states in line with the previous financial year.

These states spent 82 per cent of the Budgeted capital outlay, posting a modest 11 per cent rise over a low base of 2019-20 which saw a marked dip in actual capex due to post-election lethargy in many states at the Centre.

It said a larger part of funds earmarked for capex was diverted to Covid-related expenses in the previous financial year. This trend is expected to continue this financial year too.

The CNX Nifty is currently trading at 17369.15, down by 8.65 points or 0.05% after trading in a range of 17342.70 and 17425.15. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 1.59%, ITC up by 1.53%, Asian Paints up by 1.13%, Eicher Motors up by 0.75% and Maruti Suzuki up by 0.72%. On the flip side, Axis Bank down by 1.59%, Kotak Mahindra Bank down by 1.09%, Sun Pharma down by 0.92%, ICICI Bank down by 0.86% and Tata Motors down by 0.64% were the top losers.

Asian markets are trading mixed; Straits Times fell 3.07 points or 0.10% to 3,098.01, Taiwan Weighted lost 68.29 points or 0.39% to 17,427.01, KOSPI declined 23.19 points or 0.72% to 3,180.14 and Jakarta Composite was down by 4.33 points or 0.07% to 6,122.61. On the other hand, Nikkei 225 surged 218.75 points or 0.74% to 29,878.64, Hang Seng jumped 135.80 points or 0.52% to 26,299.43 and Shanghai Composite was up by 27.79 points or 0.77% to 3,649.65.