Benchmarks trade flat with negative bias in early deals

Indian equity benchmarks made cautious start on Wednesday tracking weakness in global peers. Markets are trading near neutral lines with negative bias in early deals. Selling in FMCG and Bankex stocks weighted on the markets, whereas buying in Power, Auto and Realty stocks limit the downside. Traders were concerned as the Organisation for Economic Co-operation and Development (OECD) cut its projection of India's economic growth by 0.2 percentage points to 9.7 per cent for the current financial year. Some pessimism came in as India recorded a spike of 27,333 new Covid-19 cases in the past 24 hours. The country also witnessed 385 deaths, taking the death toll to 445,801. However, some support came with report that foreign institutional investors have been bullish on Indian shares for much of 2021 so far, net offloading only in April, May and July. As of Monday, FIIs have invested a net Rs 64,202 crore in Indian equities so far this year. That is more than double the net purchases of Rs 28,347 crore in the first nine months of 2020.

Most of the Asian markets are trading lower following the mixed cues overnight from Wall Street, as traders are cautious ahead of the Federal Reserve's monetary policy announcement and about the likely impact of Chinese real estate major Evergrande's debt woes on other economies. Back home, telecom stocks were in focus as the government is actively considering allowing adjusted gross revenue (AGR) moratorium through legislation. In September 2020, the Supreme Court in a judgment had said that the amount payable needed to be coughed up in 10 instalments ending 2031. In scrip specific development, Zee Entertainment (ZEEL) traded higher as it signed a merger deal with Sony Pictures Networks India. According to the deal, Sony Pictures Entertainment will infuse $1.575 billion in the merged entity.

The BSE Sensex is currently trading at 58999.68, down by 5.59 points or 0.01% after trading in a range of 58886.83 and 59167.67. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.97%, while Small cap index was up by 0.97%.

The top gaining sectoral indices on the BSE were Power up by 1.04%, Auto up by 1.03%, Realty up by 1.02%, Consumer discretionary up by 1.01%, PSU up by 0.79%, while FMCG down by 0.12% and Bankex down by 0.11% were the only losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.59%, NTPC up by 1.53%, Indusind Bank up by 1.09%, Mahindra & Mahindra up by 0.91% and SBI up by 0.62%. On the flip side, Axis Bank down by 0.94%, Nestle down by 0.83%, HDFC down by 0.67%, Hindustan Unilever down by 0.58% and HDFC Bank down by 0.50% were the top losers.

Meanwhile, The Organisation for Economic Co-operation and Development (OECD) in its latest report has cut its projection of India's economic growth by 0.2 percentage points to 9.7 per cent for the current financial year (FY22). The economy was projected to grow by 7.9 per cent next financial year, 0.3 percentage point slower than pegged by it earlier. If the projections come out to be correct, India's economy would be the fastest growing large economy in both these years. It would be followed by China at 8.5 per cent in 2021 and Spain at 6.6 per cent in 2022. China is pegged to be slowing down to 5.8 per cent in the next calendar year.

OECD said high-frequency activity indicators, such as the Google location-based measures of retail and recreation mobility, suggest global activity continued to strengthen in recent months, helped by improvements in Europe and a marked rebound in both India and Latin America.

However, it said the gap between output in India's economy from pre-pandemic level is projected to be too high. The output shortfall from the pre-pandemic path at the end of 2022 in the median G20 emerging-market economy is projected to be twice of that in the median G20 advanced economy, and particularly high in India and Indonesia. Besides, it projected consumer price inflation in India to fall to 5.9 per cent in the current financial year compared to 6.2 per cent in the previous year. At this rate, the inflation would be a tad lower than the upper range of the Reserve Bank of India's upper tolerance range -- six per cent. OECD saw inflation fall to 5.5 per cent next year.

The CNX Nifty is currently trading at 17558.05, down by 3.95 points or 0.02% after trading in a range of 17528.95 and 17601.10. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.00%, NTPC up by 1.49%, Tech Mahindra up by 1.49%, BPCL up by 1.37% and Indusind Bank up by 1.16%. On the flip side, Axis Bank down by 1.02%, Nestle down by 0.96%, HDFC down by 0.74%, HDFC Bank down by 0.72% and Hindustan Unilever down by 0.69% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 183.77 points or 0.62% to 29,655.94, Straits Times lost 19.65 points or 0.64% to 3,043.55, Taiwan Weighted slipped 335.67 points or 1.94% to 16,941.12 and Shanghai Composite was down by 10.56 points or 0.29% to 3,603.41, while Jakarta Composite rose 53.11 points or 0.88% to 6,113.87.