Indian equity markets extend previous session’s losses with gap-down opening

With a gap-down opening Indian equity markets extended their previous session’s losses. Markets are trading deeply in red in early deals on Friday on weak global cues. Losses in financial, Telecom and metal shares pulled the markets lower. The broader indices were also trading in red with the Midcap falling 0.36 per cent, and the Smallcap down 0.03 per cent. Traders were concerned as India's external debt stood at USD 571.3 billion at end-June, recording an increase of USD 1.6 billion over its level at the end of March 2021. Traders took note of report that former RBI Governor D Subbarao stressed on the need to accelerate India’s economic growth rate and make sure that this benefit of growth is shared, even as he said that unemployment has taken a form of crisis in the country. Subbarao further said the organised sector is shedding jobs and the labour force is moving from high productive sector to the unorganised sector.    

On the global front, Asian  markets are trading lower on Friday following the firmly negative cues overnight from Wall Street, as traders reacted to rising inflation worries and renewed concerns about the impact of Chinese real estate major Evergrande's debt woes.  The US markets ended lower on Thursday as Wall Street wrapped up its worst month of the year on a sour note. Back home, in stock specific development, Sterling and Wilson Solar surged as the company has received the first order worth Rs 1,500 crore for its waste-to-energy business from a leading developer of energy assets in the UK and Europe.

The BSE Sensex is currently trading at 58684.87, down by 441.49 points or 0.75% after trading in a range of 58577.96 and 58889.77. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.36%, while Small cap index down by 0.03%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.57%, Power up by 0.47%, Utilities up by 0.32%, Energy up by 0.16% and PSU up by 0.14%, while Telecom down by 1.15%, Metal down by 1.14%, Bankex down by 1.00%, Basic Materials down by 0.82% and TECK down by 0.57% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid Corp up by 1.90%, Mahindra & Mahindra up by 1.31%, Bajaj Auto up by 1.11%, NTPC up by 1.06% and Reliance Industries up by 0.17%. On the flip side, Maruti Suzuki down by 1.97%, HDFC Bank down by 1.70%, Bajaj Finserv down by 1.62%, Titan Co down by 1.36% and Sun Pharma Inds. down by 1.30% were the top losers.

Meanwhile, former Reserve Bank of India (RBI) Governor D Subbarao has stressed on the need to accelerate India’s economic growth rate and make sure that this benefit of growth is shared, even as he said that unemployment has taken a form of ‘crisis’ in the country. Subbarao further said the organised sector is shedding jobs and the labour force is moving from high productive sector to the unorganised sector.

According to Subbarao, faster growth is necessary but at the same time it is not sufficient, and there is a need to address the issue of rising inequality as well. Subbarao explained that economic growth comes from private consumption, private investment, government expenditure and net exports.

Observing that household incomes have gone down and households are uncertain about the future, so the country can't depend on consumption as a growth driver. 'So, we have to depend on government expenditure and net exports...We have to fire all cylinders,' he said. He pointed out that although inequality has grown, profits of corporates have also increased. He said large corporations' market share has increased at the cost of smaller companies. This is an evidence of growing inequality.

The CNX Nifty is currently trading at 17506.95, down by 111.20 points or 0.63% after trading in a range of 17459.25 and 17536.50. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.63%, Coal India up by 2.38%, Indian Oil Corp. up by 1.88%, Power Grid Corp up by 1.69% and NTPC up by 1.66%. On the flip side, Hindalco down by 2.24%, Maruti Suzuki down by 2.17%, Bajaj Finserv down by 1.66%, Adani Ports &Special down by 1.57% and HDFC Bank down by 1.40% were the top losers.

Asian markets are trading in red; Straits Times fell 39.90 points or 1.29% to 3,046.80, Taiwan Weighted dropped 292.83 points or 1.73% to 16,641.94, KOSPI lost 43.02 points or 1.40% to 3,025.80, Jakarta Composite declined 39.29 points or 0.62% to 6,247.65 and Nikkei 225 lost 590.83 points or 2.01% to 28,861.83.