Benchmarks trade under pressure in early deals

Indian equity benchmarks made flat-to-positive start on Monday but failed to hold on gains and slipped below neutral lines. Now, markets are trading flat with negative bias in early deals due to selling in most of the sector indices led by realty, consumer discretionary and consumer durables. Traders were concerned as foreign portfolio investors (FPIs) have turned net sellers in Indian market by pulling out Rs 3,825 crore in October so far. Also, some cautiousness also came in as in its recent Regional Economic Outlook (REO), the IMF notes that the pandemic has taken a turn for the worse in Asia since the spring, along with the region’s growth outlook. The growth projection for the Asia and Pacific region is downgraded by more than 1 percent to 6.5 percent compared to the April 2021 forecasts--more than for any other region. However, downside remained capped as industry chamber PHDCCI said it expects strong GDP growth in the coming quarters with the economic recovery gaining momentum. Out of the 12 lead economic and business indicators of QET (Quick Economic Trends), tracked by the industry body, nine have shown an uptick in the sequential growth for the month of September 2021 as compared to six showing the uptrend in August 2021.

On the global front, most of the Asian markets traded higher following the mixed cues from Wall Street on Friday, as traders reacted to mixed US earnings news from several big-name companies. Overall trading activity was somewhat subdued, with a lack of major U.S. economic data keeping some traders on the sidelines. Back home, power stocks were in focus as the Ministry of Power announced new rules to sustain economic viability of the sector, ease financial stress of various stakeholders and ensure timely recovery of costs involved in electricity generation. In scrip specific development, MCX India came under pressure as its September quarter net falls 44.2 per cent to Rs 32.66 crore YoY from Rs 58.55 crore. Revenue declines 27.8 per cent to Rs 99.27 crore YoY.

The BSE Sensex is currently trading at 60750.04, down by 71.58 points or 0.12% after trading in a range of 60675.53 and 61404.99. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 2.27%, while Small cap index was down by 2.26%.

The only gaining sectoral indices on the BSE were Bankex up by 1.26% and Energy up by 0.14%, while Realty down by 3.68%, Consumer discretionary down by 2.16%, Consumer Durables down by 2.16%, Basic Materials down by 2.13%, IT down by 1.78% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 8.50%, Mahindra & Mahindra up by 1.56%, Axis Bank up by 1.43%, NTPC up by 0.41% and Reliance Industries up by 0.33%. On the flip side, Indusind Bank down by 2.93%, Asian Paints down by 2.84%, HCL Technologies down by 2.57%, Titan Company down by 2.10% and Bajaj Auto down by 2.02% were the top losers.

Meanwhile, executing confidence over India’s economic growth, Industry chamber -- PHD Chamber of Commerce and Industry (PHDCCI) has said it expects strong GDP growth in the coming quarters with the economic recovery gaining momentum. Out of the 12 lead economic and business indicators of QET (Quick Economic Trends), tracked by the industry body, nine have shown an uptick in the sequential growth for the month of September 2021 as compared to six showing the uptrend in August 2021. Pradeep Multani, President, PHDCCI, said ‘the uptrend in the lead economic and business indicators in the recent months shows that the economic recovery is catching pace and strong economic growth is expected in the coming quarters’.

However, he suggested, at this juncture, there is a need to address the high commodity prices and shortages of raw materials to support the consumption and private investments in the country. PHDCCI stated GST collections, stock market, UPI transactions, exports, exchange rate, forex reserves, CPI inflation, WPI inflation and unemployment rate have registered positive sequential growth in September 2021 as compared to August 2021. Besides, the unemployment scenario improved to 6.9 per cent in September 2021 from 8.3 per cent in the previous month.

PHDCCI said ‘Stock Market (SENSEX -average of daily close) have recorded the sequential growth of 6.4 per cent from 55,238 in August 2021 to 58,781 in September 2021. GST collections registered the sequential growth of 4.5 per cent from Rs 1,12,020 crore in August 2021 to Rs 1,17,010 crore in September 2021’. Multani said supply-side issues such as high input prices, shortages of raw materials, among others are impacting the production possibilities and reducing the price-cost margins of the businesses. He observed that the drivers of household consumption need to be further strengthened to enhance the aggregate demand as it will have an accelerated effect on the expansion of capital investments.

The CNX Nifty is currently trading at 18058.05, down by 56.85 points or 0.31% after trading in a range of 18049.65 and 18241.40. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 8.44%, ONGC up by 2.77%, Axis Bank up by 1.57%, Mahindra & Mahindra up by 1.26% and IOC up by 0.46%. On the flip side, Asian Paints down by 3.00%, Divi's Lab down by 2.86%, Indusind Bank down by 2.71%, HCL Technologies down by 2.50% and Shree Cement down by 2.30% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 31.51 points or 0.12% to 26,158.44, Taiwan Weighted gained 25.05 points or 0.15% to 16,913.79, KOSPI rose 13.53 points or 0.45% to 3,019.69, Jakarta Composite added 2.10 points or 0.03% to 6,645.84 and Shanghai Composite was up by 13.46 points or 0.38% to 3,596.06. On the other hand, Nikkei 225 lost 250.67 points or 0.87% to 28,554.18 and Straits Times fell 1.86 points or 0.06% to 3,203.28.