Benchmarks continue lackluster trade slightly in red

Indian equity benchmarks continued their lackluster trade slightly in red in morning session, amid rising covid-19 cases across the globe. Some concern also came with report indicating that foreign institutional investors (FIIs) have been on a selling spree in India this financial year, with November seeing an outflow of over Rs 17,900 crore in the equity cash market, taking the net outflow in the segment since April to almost Rs 87,000 crore. However, losses remain capped as some support came with the Finance Ministry’s statement that India and the United States have agreed for a transitional approach on equalisation levy or digital tax on e-commerce supplies beginning April 1, 2021. In a major reform of the international tax system, on October 8, 2021, 136 countries, including India, have agreed to an overhaul of global tax norms to ensure that multinationals pay taxes wherever they operate and at a minimum 15% rate. Meanwhile, the Income Tax Department said it has issued refunds of over Rs 1.23 lakh crore so far this fiscal year.

On the global front, Asian markets were trading mixed as investors bet on interest rates rising more quickly in the United States than in other major economies such as Japan and the euro zone. Back home, on the sectoral front, rubber industry’s stocks remained in focus as the Automotive Tyre Manufacturers Association (ATMA) asked the government to allow free imports of natural rubber to the extent of a projected demand-supply gap of 4.4 lakh tonnes.

The BSE Sensex is currently trading at 58296.09, down by 44.90 points or 0.08% after trading in a range of 58143.86 and 58439.07. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.20%, while Small cap index was up by 0.25%.

The top gaining sectoral indices on the BSE were Energy up by 1.69%, Realty up by 0.76%, IT up by 0.45%, TECK up by 0.34% and Healthcare up by 0.30%, while Bankex down by 0.68%, Metal down by 0.67%, PSU down by 0.66%, FMCG down by 0.55% and Capital Goods down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.43%, Infosys up by 0.66%, Tech Mahindra up by 0.65%, Kotak Mahindra Bank up by 0.43% and HCL Technologies up by 0.16%. On the flip side, Indusind Bank down by 1.74%, ICICI Bank down by 1.57%, Axis Bank down by 1.13%, HDFC down by 1.07% and Hindustan Unilever down by 0.93% were the top losers.

Meanwhile, in order to mitigate the financial deepening challenges being faced in the country, Niti Aayog has proposed setting up of full-stack ‘digital banks’ or DBs, which would principally rely on the Internet and other proximate channels to offer their services and not physical branches. 

The Niti Aayog, in a discussion paper titled ‘Digital Banks: A Proposal for Licensing & Regulatory Regime for India’, makes a case and offers a template and roadmap for a digital bank licensing and regulatory regime for the country. It said digital banks are banks as defined in the Banking Regulation Act, 1949 (BR Act).

Besides, it mentioned ‘In other words, these entities will issue deposits, make loans and offer the full suite of services that the Banking Regulation Act empowers them to. As the name suggests, however, DBs will principally rely on the Internet and other proximate channels to offer their services.’

The CNX Nifty is currently trading at 17397.55, down by 17.50 points or 0.10% after trading in a range of 17351.70 and 17454.00. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.40%, Divi's Lab up by 1.09%, Adani Ports &SEZ up by 0.95%, Infosys up by 0.72% and Tech Mahindra up by 0.72%. On the flip side, Indian Oil Corporation down by 2.04%, Shree Cement down by 1.77%, Indusind Bank down by 1.63%, ICICI Bank down by 1.59% and Coal India down by 1.38% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 235.95 points or 0.81% to 29,538.61, Jakarta Composite soared 36.55 points or 0.55% to 6,719.83, Hang Seng increased 29.33 points or 0.12% to 24,714.83 and Taiwan Weighted strengthened 6.75 points or 0.04% to 17,649.27. On the flip side, Shanghai Composite declined 3.52 points or 0.1% to 3,589.18, Straits Times trembled 4.55 points or 0.14% to 3,222.60 and KOSPI fell 11.53 points or 0.39% to 2,982.76.