Bears hold tight grip over Dalal Street

Bears were holding a tight grip over the Dalal Street in late morning session, with both Sensex and Nifty trading in deep red. Negative cues from other Asian markets impacted domestic sentiments over the Dalal Street. Traders got worried, as a private report said that even though the overall outlook for corporates have improved on the back of faster than expected recovery, and the same is likely to gain further traction in H2 but the rising commodity prices and logistics cost pose headwinds to their profitability. Besides, over 92 per cent of the eight crore informal sector workers registered on the e-Shram portal have a monthly income of Rs 10,000 or below and 72 per cent of the enrolled workforce belong to Scheduled Caste (SC), Scheduled Tribe (SC) and Other Backward Class (OBC), according to the latest data.

On the global front, Asian markets were mostly trading in red, even after non-oil domestic exports in Singapore climbed a seasonally adjusted 4.2 percent on month in October, Singapore's statistics department said on Wednesday. That easily exceeded expectations for an increase of 0.4 percent following the downwardly revised 1.0 percent gain in September.

The BSE Sensex is currently trading at 59469.64, down by 538.69 points or 0.90% after trading in a range of 59462.97 and 60177.52. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.77%, while Small cap index was down by 1.61%.

The top losing sectoral indices on the BSE were Auto down by 2.92%, Metal down by 1.98%, Realty down by 1.90%, Industrials down by 1.86% and Healthcare down by 1.81%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Power Grid up by 0.47% and Asian Paints up by 0.13%. On the flip side, Mahindra & Mahindra down by 3.35%, Maruti Suzuki down by 3.14%, HCL Tech. down by 2.84%, Dr. Reddy's Lab down by 2.41% and Indusind Bank down by 2.24% were the top losers.

Meanwhile, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy has said that India is on a path towards a higher growth trajectory, higher poverty reduction, higher employment, and a prosperous, more developed and better governed India and the country’s Gross domestic product (GDP) is likely to grow at around 10 percent in 2021-22.

Debroy has noted that at the beginning of FY2021-22, the forecasts for real growth were in the 8.5-12.5 per cent range. However, he said all kinds of high-frequency indicators, including GST revenue, e-way bill, power consumption, vehicle registrations, railway freight, corporate profitability, foreign direct investment (FDI) inflows and steel consumption now instil confidence about the fact that the real rate of growth will be at around 10 per cent this financial year. For the 2022-23 fiscal, he expects growth likely to be in the 6-7.5 percent range. According to him, growth and income growth has four drivers - consumption, investment, government expenditure and exports. Of those, three and a little bit of investment are showing fairly robust and broad-based growth.

He further said the export story in the country looks good at present. Also, government expenditure has been quite stepped-up. He said with improvement in capacity utilisation, investments are also going to pick up in another six months. He stated that there is a lot of uncertainty around the third wave of COVID-19. However, he said even if it comes, the impact on economic growth is not going to be very serious due to higher vaccination numbers and a better-equipped medical system.

The CNX Nifty is currently trading at 17712.95, down by 185.70 points or 1.04% after trading in a range of 17711.55 and 17945.60. There were 3 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 0.58%, SBI Life Insurance up by 0.24% and Asian Paints up by 0.19%. On the flip side, Tata Motors down by 4.37%, Mahindra & Mahindra down by 3.34%, Eicher Motors down by 2.96%, Hero MotoCorp down by 2.92% and Maruti Suzuki down by 2.84% were the top losers.

Asian markets were mostly trading in red; Hang Seng decreased 345.01 points or 1.35% to 25,305.07, Jakarta Composite lost 45.77 points or 0.69% to 6,630.03, Nikkei 225 slipped 17.25 points or 0.06% to 29,671.08, Shanghai Composite declined 4.56 points or 0.13% to 3,532.81 and KOSPI fell 3.55 points or 0.12% to 2,958.87. On the flip side, Straits Times advanced 1.49 points or 0.05% to 3,234.17 and Taiwan Weighted strengthened 45.08 points or 0.25% to 17,809.12.