Markets trade lower in early deals; Reliance Industries falls over 1%

Indian equity benchmarks started the session in red on Monday amid weakness in the global peers and rising crude prices. Markets are trading lower with marginal cut in early deals due to selling in Energy, Bankex down and Power stocks. Traders were concerned as a periodic labour force survey by the National Statistical Office (NSO) showed that unemployment rate for all ages in urban areas rose to 10.3 per cent in October-December 2020 as compared to 7.9 per cent in the corresponding months a year ago. Some cautiousness also came in as India Ratings and Research (Ind-Ra) said that salaried and wages earners will be a drag on overall economic recovery in medium term due to tepid recovery of household consumption. Market participants overlooked report that Industrial production surged 11.5 per cent in July mainly due to a low-base effect and good performance by manufacturing, mining and power sectors but the output remained slightly below the pre-pandemic level. Besides, as per NSDL data, foreign portfolio investors (FPI) have so far made a total net investment of Rs 7,575 crore in India so far in September.

Most of the Asian markets are trading lower following the firmly negative cues from Wall Street on Friday, as traders continued to express concerns that the surge coronavirus cases in the region and other countries, particularly in the U.S., could dent the pace of global economic recovery from the pandemic. Back home, sugar industry stocks were in focus as industry body ISMA said India, the world's second largest sugar producer, can export 6 million tonne of the sweetener in the 2021-22 season commencing next month, taking advantage of the firm global market. In scrip specific development, Cosmo Films gained as it has made a foray into the pet care business with the launch of its platform ZIGLY.

The BSE Sensex is currently trading at 58146.85, down by 158.22 points or 0.27% after trading in a range of 58032.38 and 58314.64. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.04%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Metal up by 0.64%, Basic Materials up by 0.51%, Telecom up by 0.43%, PSU up by 0.29%, Utilities up by 0.22%, while Energy down by 1.15%, Bankex down by 0.46%, Power down by 0.40%, Oil & Gas down by 0.31%, Consumer Durables down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.51%, Bharti Airtel up by 0.83%, TCS up by 0.82%, Maruti Suzuki up by 0.79% and Bajaj Auto up by 0.38%. On the flip side, Reliance Industries down by 1.59%, ICICI Bank down by 1.06%, HCL Technologies down by 0.68%, Infosys down by 0.63% and Dr. Reddy's Lab down by 0.57% were the top losers.

Meanwhile, Industry chamber Ficci in its latest quarterly survey (Q2) has said that the outlook for increased manufacturing activities in the second quarter of this fiscal (Q2FY22) has been significantly improved, though the cost of doing business and production is rising. As per Ficci's survey on manufacturing, industry respondents have attributed the hike in production costs primarily to high fixed costs, higher overhead costs for ensuring safety protocols, and a drastic reduction in volumes due to lockdown.

The hike was also attributed to lower capacity utilisation, high freight charges and other logistic costs, increased cost of raw materials, power cost, and high-interest rates. It said that after experiencing subdued Q1 (April-June 2021-22), the outlook seems to have improved significantly in the second quarter (July-September).

However, the survey noticed a high percentage of respondents experiencing the rising cost of doing business and production. On exports, it said the outlook seems improving as around 58 per cent of the participants are expecting a rise in their outbound shipments during the second quarter. The survey added hiring outlook for the sector remains subdued as 68 per cent mentioned that they are not likely to hire additional workforce in the next three months. Responses have been drawn from over 300 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 2.7 trillion.

The CNX Nifty is currently trading at 17322.05, down by 47.20 points or 0.27% after trading in a range of 17297.35 and 17375.50. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.98%, Hindalco up by 1.47%, HDFC up by 1.27%, Bharti Airtel up by 0.90% and UPL up by 0.88%. On the flip side, Reliance Industries down by 1.63%, ICICI Bank down by 1.19%, SBI Life Insurance down by 1.07%, Eicher Motors down by 0.91% and HDFC Life Insurance down by 0.71% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 fell 65.73 points or 0.22% to 30,316.11, Straits Times declined 27.77 points or 0.90% to 3,071.03, Hang Seng slipped 541.81 points or 2.07% to 25,664.10, Taiwan Weighted lost 2.98 points or 0.02% to 17,471.59, KOSPI dropped 7.43 points or 0.24% to 3,118.33 and Jakarta Composite plunged 36.41 points or 0.60% to 6,058.46, while Shanghai Composite was up by 3.62 points or 0.10% to 3,706.73.