Sensex, Nifty add losses in late morning session

Weak trade continued over the Dalal Street in late morning session, with both Sensex and Nifty adding more losses. Negative cues from other Asian markets impacted domestic sentiments. Traders were cautious, after the World Bank said that East Asia and Pacific region's recovery has been undermined by the spread of the COVID-19 Delta variant, which is likely slowing economic growth and increasing inequality in the region. Economic activity began to slow in the second quarter of 2021, and growth forecasts have been downgraded for most countries in the region, according to the World Bank's East Asia and Pacific Fall 2021 Economic Update.

The street paid no heed towards reports that the Finance Ministry has set up two committees of state finance ministers which would rework rate slabs, review GST exempt items and identify potential evasion sources. Four years after the rollout of the national Goods and Services Tax (GST), which replaced the complex indirect tax structure, the center and states have started work on moving towards a ''simpler rate structure in GST'' by reviewing the current rate slabs, including special rates and merger of rate slabs.

On the global front, Asian markets were trading mostly in red, after China's industrial profits continued to grow at a slower pace as higher input prices as well as shortage of materials lifted production cost. The National Bureau of Statistics reportedly said that industrial profits increased 10.1 percent year-on-year in August, following an annual growth of 16.4 percent in July. During January to August period, industrial profits advanced 49.5 percent from the same period last year.

The BSE Sensex is currently trading at 59839.79, down by 238.09 points or 0.40% after trading in a range of 59761.34 and 60288.44. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.18%, while Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were PSU up by 2.46%, Utilities up by 2.45%, Power up by 2.40%, Oil & Gas up by 1.50% and Metal up by 1.32%, while Realty down by 2.93%, Telecom down by 1.72%, TECK down by 1.72%, IT down by 1.64% and Healthcare down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 6.39%, NTPC up by 4.57%, Titan Co up by 1.95%, Maruti Suzuki up by 1.11% and SBI up by 1.03%. On the flip side, Bharti Airtel down by 2.99%, HCL Tech. down by 2.44%, Bajaj Finance down by 1.85%, Infosys down by 1.77% and Tech Mahindra down by 1.66% were the top losers.

Meanwhile, with an aim to fund the revenue gap for reviving the pandemic-hit economy, the finance ministry has said that the government will borrow Rs 5.03 lakh crore in the second half of the current fiscal (H2 FY22). During the first half, the government has raised Rs 7.02 lakh crore by issuing bonds. It said out of gross market borrowing of Rs 12.05 lakh crore projected for FY 2021-22 in the Union Budget, Rs 7.24 lakh crore (60  per cent) was planned to be borrowed in first half (H1).

It said ‘the effective borrowing in H1 of FY 2021-22 was Rs 7.02 lakh crore. The Government now plans to borrow the balance Rs 5.03 lakh crore in second half year (H2) of FY 2021-22’. The H2 projection also factors requirements for release of balance amount to states on account of back-to-back loan facility in-lieu of GST compensation during the year, it added.

According to the Budget for 2021-22, the government’s gross borrowing was estimated at Rs 12.05 lakh crore, while net borrowing was pegged at Rs 9.37 lakh crore in the financial year beginning April 1. Gross borrowing includes repayments of past loans. Repayment for past loans in the next financial year has been pegged at Rs 2.80 lakh crore. The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills. The Budget has pegged fiscal deficit at 6.8 per cent for the next fiscal, down from 9.5 per cent of the GDP in the current financial year.

The CNX Nifty is currently trading at 17802.35, down by 52.75 points or 0.30% after trading in a range of 17777.55 and 17912.85. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 6.62%, Coal India up by 4.70%, NTPC up by 4.65%, Indian Oil Corp. up by 2.82% and Titan Co up by 2.01%. On the flip side, Bharti Airtel down by 2.94%, HCL Tech. down by 2.41%, Divi's Lab down by 2.12%, Bajaj Finance down by 1.89% and Infosys down by 1.77% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 149.35 points or 0.86% to 17,164.42, Nikkei 225 slipped 113.09 points or 0.37% to 30,126.97, KOSPI fell 30.54 points or 0.97% to 3,103.10, Straits Times trembled 14.83 points or 0.48% to 3,085.47 and Jakarta Composite lost 2.60 points or 0.04% to 6,119.90. On the flip side, Shanghai Composite gained 18.83 points or 0.53% to 3,601.66 and Hang Seng increased 352.97 points or 1.46% to 24,561.75.