Benchmarks trade lower with over half percent cut in early deals

Indian equity benchmarks made flat-to-negative start of new week amid mixed global cues. Markets soon extend their losses and are trading lower with over half a percent cut in early deals due to selling in Energy, Oil & Gas and Consumer Durables stocks. Some cautiousness came in as RBI data showed the country’s foreign exchange reserves declined by $ 763 million to $640.112 billion in the week ended November 12. Adding more pessimism, the government increased goods and services tax (GST) applicable on finished products such as apparel, textiles and footwear from 5 percent to 12 percent, effective January 2022. Traders largely overlooked report that a jump in government spending in September has led Icra to upgrade its GDP growth estimate for the second quarter of FY2021-22 to 7.9 per cent.

Global cues remained subdued as Asian markets traded mixed following the negative cues from Wall Street on Friday, as weak crude oil prices and worries about the global economy due to resurgence of coronavirus cases and fresh lockdown measures in Europe weighed on market sentiment. Back home, aviation stocks were in focus as DGCA data showed domestic air passenger volume spiked 70.46% in October to 89.85 lakh over the same month of 2020. In scrip specific development, shares of Bharti Airtel hit a new high after the telecom services provider increased its tariffs for telecom subscribers for a range of services effective November 26.

The BSE Sensex is currently trading at 59237.31, down by 398.70 points or 0.67% after trading in a range of 59125.16 and 59778.37. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.75%, while Small cap index was down by 0.87%.

The few gaining sectoral indices on the BSE were Telecom up by 4.30%, Metal up by 0.51%, TECK up by 0.25%, while Energy down by 2.55%, Oil & Gas down by 1.15%, Consumer Durables down by 1.11%, Realty down by 1.05%, Auto down by 0.85% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 5.33%, Power Grid up by 1.38%, Asian Paints up by 1.10%, Indusind Bank up by 1.00% and ITC up by 0.59%. On the flip side, Reliance Industries down by 3.12%, Bajaj Finance down by 2.22%, Kotak Mahindra Bank down by 2.04%, Maruti Suzuki down by 1.82% and Bajaj Finserv down by 1.40% were the top losers.

Meanwhile, the domestic rating agency -- Icra has upgraded its Gross Domestic Product (GDP) growth estimate for the second quarter of FY2021-22 to 7.9 per cent with a jump in government spending in September. Earlier, it had estimate real GDP growth for the July-September period at 7.7 per cent. The GDP had grown by over 20 per cent in Q1FY22 on a low base as the pandemic’s first wave raged.

It said ‘Economic activity in Q2 FY22 was supported by a pick-up in industrial and service sector volumes after the second wave of Covid-19 subsided and rising vaccine coverage revived confidence. Additionally, healthy Central and state Government spending, robust merchandise exports and continuing demand from the farm sector supported economic activity in that quarter’. It added this would be an improvement when compared to the COVID second wave-hit first quarter of the fiscal.

The agency said a normalising base is expected to lead to a moderation in the growth when compared with the year-ago period. The central government’s non-interest revenue expenditure expanded by 15 per cent in Q2FY22, compared to the contraction of 7.3 per cent in Q1FY22. Additionally, for the 22 state governments for which data is available, revenue expenditure expanded by 13.1 per cent in Q2FY22, a step up from the 10.6 per cent growth in Q1FY22. The agency estimates growth by gross value added basis for the industry, services and agriculture, forestry and fishing to come at 8.5 per cent, 7.9 per cent and 3.0 per cent, respectively, for the quarter.

The CNX Nifty is currently trading at 17652.95, down by 111.85 points or 0.63% after trading in a range of 17611.35 and 17805.25. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 5.54%, Asian Paints up by 1.70%, Cipla up by 1.53%, Power Grid up by 1.30% and Wipro up by 1.18%. On the flip side, Reliance Industries down by 2.96%, Kotak Mahindra Bank down by 2.28%, Bajaj Finance down by 2.16%, Maruti Suzuki down by 1.76% and Bajaj Finserv down by 1.73% were the top losers.

Asian markets are trading mixed; Straits Times rose 9.19 points or 0.28% to 3,241.53, Taiwan Weighted added 4.38 points or 0.02% to 17,822.69, KOSPI surged 37.89 points or 1.28% to 3,008.91 and Shanghai Composite was up by 23.00 points or 0.65% to 3,583.37. On the other hand, Nikkei 225 fell 34.91 points or 0.12% to 29,710.96, Hang Seng slipped 99.40 points or 0.40% to 24,950.57 and Jakarta Composite declined 18.20 points or 0.27% to 6,702.06.