Sensex, Nifty remain in red terrain during late morning deals

Indian equity benchmarks remained in red terrain during late morning deals, but managed to cut some losses, on the back of positive cues from other Asian markets. Traders were getting some support, as the Union Cabinet has approved the continuation of Pradhan Mantri Awaas Yojana (Rural) for another three years to provide financial assistance for the construction of the remaining 155.75 lakh houses under the scheme. The scheme has been extended beyond March 2021, and till March 31, 2024. The total target is to construct 2.95 crore 'pucca' houses.

Besides, defending the central bank's more-than-anticipated dovish stance wherein the MPC unanimously voted to continue with an accommodative policy, Reserve Bank of India (RBI) Governor Shaktikanta Das has said that ‘our overarching policy focus and priority now is supporting growth’ amid the threat of a third wave of COVID-19 and the legroom a cooling inflation print offers.

On the global front, Asian markets were trading mostly in green, after consumer prices in China were up 2.3 percent on year in November, the National Bureau of Statistics said on Thursday. That was shy of expectations for a gain of 2.5 percent and up from 1.5 percent in October. On a monthly basis, inflation rose 0.4 percent - exceeding expectations for 0.3 percent but slowing from 0.7 percent in the previous month.

The BSE Sensex is currently trading at 58519.75, down by 129.93 points or 0.22% after trading in a range of 58340.85 and 58889.96. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Energy up by 1.23%, Telecom up by 1.15%, Capital Goods up by 1.03%, Oil & Gas up by 0.85% and Industrials up by 0.67%, while Consumer Durables down by 0.85%, Bankex down by 0.79%, Realty down by 0.59%, IT down by 0.50% and TECK down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.70%, Reliance Industries up by 1.39%, Asian Paints up by 1.36%, Bajaj Finance up by 0.82% and Mahindra & Mahindra up by 0.55%. On the flip side, Titan Co down by 2.01%, HDFC Bank down by 1.83%, Kotak Mahindra Bank down by 1.48%, Nestle down by 1.19% and NTPC down by 1.14% were the top losers.

Meanwhile, Fitch Ratings has cut India's Gross domestic product (GDP) growth forecast to 8.4 percent from the previous 8.7 percent for the current fiscal year ending March 31, 2022, saying the rebound after the second wave of COVID infections has been subdued than expected. However, it raised the economic growth projection for the next financial year (FY23) to 10.3 percent from previously forecast 10 percent.

According to the report, the economy had contracted by 7.3 per cent in the 2020-21 fiscal as restrictions imposed to curb spread of coronavirus pummelled business activity. It said India's economy staged a strong rebound in 3Q21 (July-September 2021) from the Delta variant-induced sharp contraction. It also said the GDP rose a sharp 11.4 per cent when compared to the preceding April-June quarter when it had slumped 12.4 per cent. However, it said the bounce was more subdued than it expected. The rebound in the services sector was weaker than hoped for.

Nevertheless, the report said business surveys and mobility data point to activity growing robustly in 4Q21 (October-December 2021). Growth in the manufacturing sector is constrained by ongoing supply shortages, but the supply bottlenecks are expected to ease in the coming months. Carmakers are signalling a ramp-up of production while domestic coal production is increasing to make up for shortages. Fitch said it expects the services sector to show a strong reading amid the lifting of most restrictions.

The CNX Nifty is currently trading at 17426.90, down by 42.85 points or 0.25% after trading in a range of 17379.60 and 17543.25. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 1.59%, Asian Paints up by 1.43%, Reliance Industries up by 1.34%, BPCL up by 1.19% and Adani Ports & SEZ up by 1.12%. On the flip side, Titan Co down by 2.01%, HDFC Bank down by 1.89%, Divi's Lab down by 1.60%, Kotak Mahindra Bank down by 1.39% and Nestle down by 1.18% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 213.15 points or 0.89% to 24,210.02, Shanghai Composite gained 37.47 points or 1.03% to 3,675.04, KOSPI rose 10.04 points or 0.33% to 3,011.84, Straits Times advanced 8.91 points or 0.28% to 3,138.68, Jakarta Composite soared 7.65 points or 0.12% to 6,611.45 and Taiwan Weighted strengthened 5.88 points or 0.03% to 17,838.30. On the flip side, Nikkei 225 slipped 89.52 points or 0.31% to 28,771.10.