Benchmarks continue lackluster trade slightly in red

Indian equity benchmarks continued their lackluster trade slightly in red in morning session ahead of the expiry of F&O September series contracts. Traders took a note of finance ministry stating that India’s external debt rose modestly by 2.1 per cent year-on-year to $570 billion as of March-end 2021, notwithstanding the COVID-19 pandemic. It said reserves to external debt ratio, however, increased to 101.2 per cent from 85.6 per cent during the same period, thereby consolidating the country’s position as a net creditor to the world. However, losses remain capped as traders found some support with Apparel Export Promotion Council (AEPC) Chairman A Sakthivel’s statement that the government's decision to expand the scope of the Rs 4.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) to support micro, small and medium enterprises would help deal with funds shortage and promote exports. Some support also came as in order to increase utilisation of the Emergency Credit Line Guarantee Scheme (ECLGS) and provide support to small businesses ahead of the festive season and economic upturn, the government has expanded the scheme by increasing the borrowing limit for availing loans

On the global front, Asian markets were trading mostly in green, as concerns about the China Evergrande situation eased after it unveiled plans to settle debt with a Chinese bank. Back home, on the sectoral front, automotive sector remained in watch as Union Minister for Heavy Industries Mahendra Nath Pandey said India would become a manufacturing hub and the automotive sector will play a major role in making the country a $5 trillion economy.

The BSE Sensex is currently trading at 59401.33, down by 11.94 points or 0.02% after trading in a range of 59228.22 and 59549.57. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.42%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were Telecom up by 1.37%, Consumer Durables up by 1.15%, Realty up by 1.14%, Industrials up by 0.51% and Healthcare up by 0.44%, while Oil & Gas down by 0.48%, Energy down by 0.44%, Metal down by 0.44%, Basic Materials down by 0.11% and Bankex down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 1.50%, Bharti Airtel up by 1.41%, Sun Pharma up by 1.10%, Titan Co up by 0.81% and Hindustan Unilever up by 0.68%. On the flip side, Power Grid Corporation down by 1.85%, Bajaj Auto down by 1.12%, Ultratech Cement down by 0.88%, Kotak Mahindra Bank down by 0.86% and Tech Mahindra down by 0.74% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) K V Subramanian has said that India will clock over 7 per cent annual growth during this decade on the back of strong economic fundamentals. During the current fiscal (FY22), he said, growth would be in double-digits and it could moderate to 6.5 - 7 per cent in the next financial year.

Subramanian said ‘when you look at the data itself actually, the V shaped recovery and quarterly growth patterns actually established that the fundamentals of the economy are strong...the kind of reforms that we've done on it, and the supply side measures that we've taken will enable strong growth not only this year but going forward as well.’ He also said ‘this decade will be India's decade of inclusive growth. In FY'23, we expect growth to be between 6.5 to 7 per cent, and then accelerating further as the impact of these reforms are seen. On average, I expect growth to be greater than 7 per cent in this decade for India’.

CEA also pointed out that the government is putting a lot of emphasis on capital expenditure as it has a multiplier effect. He noted that the Union Budget for 2021-22 has provided a capital outlay of Rs 5.54 lakh crore, an increase of 34.5 per cent over the Budget Estimate of 2020-21. It also said the Budget estimate of capital expenditure for FY2020-21 was Rs 4.12 lakh crore.

The CNX Nifty is currently trading at 17695.85, down by 15.45 points or 0.09% after trading in a range of 17658.45 and 17739.90. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.88%, Dr. Reddy's Lab up by 1.59%, Sun Pharma up by 1.49%, Bharti Airtel up by 1.19% and Titan Company up by 0.81%. On the flip side, Power Grid Corp down by 1.97%, ONGC down by 1.28%, Shree Cement down by 1.28%, Eicher Motors down by 1.20% and Hero MotoCorp down by 1.10% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 115.99 points or 0.69% to 16,971.45, Jakarta Composite soared 63.40 points or 1.03% to 6,225.95, Nikkei 225 surged 26.79 points or 0.09% to 29,571.08, KOSPI rose 15.52 points or 0.51% to 3,075.79, Straits Times advanced 14.85 points or 0.48% to 3,089.16 and Shanghai Composite gained 13.17 points or 0.37% to 3,549.46.

On the flip side, Hang Seng decreased 212.77 points or 0.86% to 24,450.73.