Markets trim opening losses; trade tad below near neural lines in early deals

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Tuesday tracking weakness in global markets. But, soon domestic indices cut most of their losses and are trading near neutral lines with negative bias in early deals. Buying in Metal, Realty and Basic Materials counters supported the markets. Early cautiousness was due to report that foreign institutional investors (FIIs) net sold shares worth Rs 3,438.76 crore in the Indian equity market on November 22, as per provisional data available on the NSE. However, some respite came in as an SBI research report stated that the country's GDP growth is likely to be around 8.1 per cent in the second quarter of the current financial year and in the range of 9.3-9.6 per cent during fiscal 2022. It added that in the first quarter of FY 22, the economy grew 20.1 per cent. Adding more optimism, the preliminary data of the commerce ministry showed that the country's exports rose 18.8 per cent to $20.01 billion during the three week period of this month (November 1-21), due to healthy growth in sectors such as petroleum products, engineering goods, chemicals and gems and jewellery.

Global cues remained sluggish with most of the Asian markets trading lower following the negative cues from Wall Street overnight, as Treasury yields and the U.S. dollar jumped on concerns over quicker policy tightening after President Joe Biden announced his intent to nominate Jerome Powell for a second term as Federal Reserve Chair. Financial markets in Japan were closed on Tuesday for a holiday. Back home, telecom industry stocks were in focus as data released by telecom regulator TRAI showed that Bharti Airtel added 2.74 lakh mobile subscribers in September even as larger rival Reliance Jio lost 1.9 crore users and Vodafone Idea lost 10.77 lakh subscribers during the month. In scrip specific development, Vedanta jumped on reports that its promoters are looking to increase their stake in the company.

The BSE Sensex is currently trading at 58346.40, down by 119.49 points or 0.20% after trading in a range of 57718.34 and 58347.44. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.74%, while Small cap index was up by 0.82%.

The top gaining sectoral indices on the BSE were Metal up by 2.94%, Realty up by 1.50%, Basic Materials up by 1.46%, PSU up by 1.00%, Utilities up by 0.79%, while IT down by 0.77%, TECK down by 0.75%, Telecom down by 0.18%, Energy down by 0.17%, Bankex down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.01%, NTPC up by 0.92%, Maruti Suzuki up by 0.90%, Bajaj Finserv up by 0.86% and Power Grid up by 0.85%. On the flip side, Infosys down by 1.92%, ICICI Bank down by 1.27%, Bajaj Auto down by 0.66%, Hindustan Unilever down by 0.65% and Bharti Airtel down by 0.57% were the top losers.

Meanwhile, SBI in its latest research report, Ecowrap, has said that the country's Gross Domestic Product (GDP) growth is likely to be around 8.1 per cent in the second quarter of the current financial year (Q2FY22). As per SBI's Nowcasting Model, the full year (FY22) GDP growth is now revised upwards to 9.3-9.6 per cent from its earlier estimate of 8.5-9 per cent. It added that in the first quarter of FY 22, the economy grew 20.1 per cent. It highlighted that the projected 8.1 per cent growth rate in Q2 FY22 is the highest growth across all economies.

As per the report, the average GDP growth of 28 selected economies has decelerated to 4.5 per cent in Q3 (2021) as against 12.1 per cent. Also at an annual rate of 9.3-9.6 per cent, the country's real GDP growth would now be 1.5-1.7 per cent higher than the pre-pandemic level of FY20. On November 19, Prime Minister Narendra Modi announced the government will repeal the three farm laws. He also said that a committee will be set up to decide on matters, including promotion of zero budgeting farming, scientifically change the crop pattern keeping in mind the changing requirements of the country and make MSP (Minimum Support Price) more effective and transparent. The report also said that five agricultural reforms that could act as enablers even without these bills.

The report said ‘First, instead of MSP as a price guarantee that farmers are demanding, the government could insert a quantity guarantee clause for a minimum period of five years that procurement to production percentage of crops (being currently procured) should at least be equal to last year percentage’. It also suggested exploring converting the MSP to Floor Price of auction on the National Agriculture Market (eNAM). Further, the report said that efforts must continue to strengthen APMC market infrastructure and establish a contract farming institution in India that will have the exclusive right to oversee price discovery in contract farming. It also proposed ensuring a symmetric procurement across states. It also proposed ensuring a symmetric procurement across states.

The CNX Nifty is currently trading at 17399.20, down by 17.35 points or 0.10% after trading in a range of 17216.10 and 17410.10. There were 27 stocks advancing against 22 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were JSW Steel up by 3.52%, Tata Steel up by 2.83%, Adani Ports & SEZ up by 1.50%, Tata Motors up by 1.47% and Hindalco up by 1.36%. On the flip side, Infosys down by 1.90%, ICICI Bank down by 1.14%, Shree Cement down by 0.63%, Bajaj Auto down by 0.62% and Asian Paints down by 0.50% were the top losers.

Asian markets traded mostly in red; Straits Times fell 3.72 points or 0.11% to 3,233.36, Hang Seng lost 245.40 points or 0.98% to 24,705.94, Taiwan Weighted declined 80.38 points or 0.45% to 17,723.16, KOSPI slipped 13.93 points or 0.46% to 2,999.32 and Jakarta Composite weakened 34.89 points or 0.52% to 6,688.50, while Shanghai Composite was up by 15.45 points or 0.43% to 3,597.53.