Benchmarks trade lower in early deals; Energy, Bankex lead losers

Indian equity benchmarks made cautious start on Tuesday as traders weighed inflation risks and monitor the first face-to-face virtual summit between US President Joe Biden and Chinese leader Xi Jinping. Now, markets are trading lower with over one third of a percent cut in early deals due to selling in Energy, Bankex and Healthcare stocks. Though, downside remained capped as merchandise exports grew for the eleventh consecutive month to $35.65 billion, up 43 per cent on-year in October, as external demand continued to remain robust. The preliminary data released by the commerce and industry ministry showed growth being driven by higher demand for items, primarily engineering goods, petroleum products, gems and jewellery, as well as organic and inorganic chemicals, among other items. Traders took note of Union Finance Minister Nirmala Sitharaman’s statement that the Centre would release double the monthly amount of tax devolution -- a total of Rs 95,082 crore -- in November to enable the states to step up their capex and spur economic growth close to double digits this fiscal year.

Most of the Asian markets traded higher despite the slightly negative cues from Wall Street overnight, as traders reacted positively to news of the leaders of the U.S. and China in a virtual summit, even as some uncertainty about the near-term outlook for the markets continue on lingering inflation concerns. Also, traders are upbeat about the stimulus package and spending plan to revive the economy from the coronavirus pandemic. Back home, NBFCs stocks were in focus with a private report stating that reflecting rising festival-like demand, NBFCs sanctioned 17 per cent more loans in Q2FY22. The personal loan segment saw strong traction of 90 per cent, followed by consumer loan at 58 per cent. In scrip specific development, Rajesh Exports traded higher as its Q2FY22 net profit more-than-doubled to Rs 51.84 crore when compared with Rs 23.46 crore in Q2FY21.

The BSE Sensex is currently trading at 60452.61, down by 266.10 points or 0.44% after trading in a range of 60433.88 and 60802.79. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.29%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Auto up by 0.87%, Realty up by 0.80%, Metal up by 0.78%, Basic Materials up by 0.47%, Telecom up by 0.43%, while Energy down by 1.02%, Bankex down by 0.61%, Healthcare down by 0.27%, Oil & Gas down by 0.12%, Power down by 0.00% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.70%, Mahindra & Mahindra up by 0.89%, Tata Steel up by 0.77%, Tech Mahindra up by 0.53% and Infosys up by 0.38%. On the flip side, HDFC down by 1.29%, Reliance Industries down by 1.26%, Asian Paints down by 1.24%, ICICI Bank down by 0.70% and Kotak Mahindra Bank down by 0.70% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its article on the state of the economy has stated that the Indian economy is on the path of a durable recovery on the back of conducive monetary and credit conditions, the global headwinds notwithstanding. Domestically, there have been several positives on the COVID-19 front, in terms of reduced infections and faster vaccinations. The article said the Indian economy is clearly differentiating itself from the global situation, which is marred by supply disruptions, stubborn inflation and surges of infections in various parts of the world. Notwithstanding the global headwinds, the article said mobility is rapidly improving, the job market is recouping, and overall economic activity is on the cusp of a strengthening revival.

It noted ‘Overall monetary and credit conditions stay conducive for a durable economic recovery to take root’. The global economic outlook remains clouded by uncertainty with headwinds from multiple fronts at a time when many economies are still struggling with nascent recoveries. There is a risk of faster policy normalisation by major central banks leading to tightening of financial conditions and stifling of growth impulses, the article said. The central bank said views expressed in this article are those of the authors and do not necessarily represent the views of the Reserve Bank of India. On capital markets, it said the Indian equity market has outperformed major equity indices in 2021 so far.

It said ‘the spectacular gains have raised concerns over overstretched valuations with a number of global financial service firms turning cautious on Indian equities’. Despite widespread concerns over valuations, the article said it is noteworthy that the percentage holding of private promoters in companies listed on NSE increased by nearly 50 basis points to 44.90 per cent at September-end 2021 from 44.42 per cent at June-end 2021. The article also said that although only 5.2 per cent of the budgeted disinvestment target of Rs 1.75 lakh crore has been achieved so far, ‘the sale of Air India has marked a turning point in the disinvestment programme of the government’.

The CNX Nifty is currently trading at 18050.35, down by 59.10 points or 0.33% after trading in a range of 18033.40 and 18132.65. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.75%, Tata Motors up by 1.46%, Hero MotoCorp up by 1.03%, JSW Steel up by 1.03% and Mahindra & Mahindra up by 0.83%. On the flip side, Reliance Industries down by 1.41%, HDFC down by 1.29%, Asian Paints down by 1.26%, HDFC Bank down by 0.84% and Kotak Mahindra Bank down by 0.84% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 rose 39.08 points or 0.13% to 29,815.88, Hang Seng surged 245.60 points or 0.97% to 25,636.51, Taiwan Weighted added 0.13 points to 17,634.60, KOSPI inched up 1.91 points or 0.06% to 3,001.43, Jakarta Composite advanced 28.14 points or 0.43% to 6,644.17 and Shanghai Composite was up by 10.16 points or 0.29% to 3,543.46, while Straits Times was down by 0.63 points or 0.02% to 3,239.95.