Domestic indices trade tad lower in early deals: WPI eyed

Indian equity benchmarks made gap-down opening on Friday tracking weakness in global markets. Domestic indices soon trimmed some of their losses and are trading lower with marginal cut in early deals due to selling in Telecom, TECK Bankex stocks. Investors are eyeing on the Wholesale Price Index (WPI) data to be out later in the day for further cues. Some cautiousness came in with United Nations’ report that India is forecast to grow at 6.5 per cent in fiscal year 2022, a decline from the 8.4 per cent GDP estimate in previous financial year, and while the country's economic recovery is on a solid path amid rapid vaccination progress, coal shortages and high oil prices could put the brakes on economic activity in the near term. Traders took note of report that the FSDC sub-committee headed by Reserve Bank Governor Shaktikanta Das has reviewed the economic situation in the backdrop of the COVID-19 pandemic and resolved to keep a close watch on the unfolding developments with a view to ensure financial stability.

Global cues remained lackluster with most of the Asian markets traded lower following the broadly negative cues overnight from Wall Street, with energy and technology stocks primarily dragging the markets to the downside. Traders remain worried and cautious amid the rapid spread of the coronavirus Omicron variant in most countries and the likely economic impact of the related curbs. Back home, aviation industry stocks were in focus as ratings agency Crisil said the ongoing third pandemic wave led by Omicron could pose fresh turbulence for air traffic, pushing its full recovery into fiscal 2024. The agency had earlier expected the full recovery to happen in fiscal 2023. In scrip specific development, shares of Aurobindo Pharma were down over 2 per cent on the BSE after its Unit I, which is an API manufacturing facility in Hyderabad, has received a warning letter from the US FDA.

The BSE Sensex is currently trading at 61076.41, down by 158.89 points or 0.26% after trading in a range of 60757.03 and 61098.04. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.31%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.75%, Industrials up by 0.58%, Energy up by 0.51%, Auto up by 0.33%, PSU up by 0.30%, while Telecom down by 0.57%, TECK down by 0.53%, Bankex down by 0.51%, IT down by 0.45%, FMCG down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 0.79%, Power Grid up by 0.65%, NTPC up by 0.63%, Reliance Industries up by 0.60% and Maruti Suzuki up by 0.47%. On the flip side, Axis Bank down by 2.17%, HCL Technologies down by 1.97%, Asian Paints down by 1.69%, HDFC down by 1.24% and Wipro down by 1.03% were the top losers.

Meanwhile, Niti Aayog Vice-Chairman Rajiv Kumar has said the country needs much more 'equitable' growth as inequality could lead to tensions in society. Kumar further said the country's democracy will not permit the kind of K-shaped growth it has seen in the past, where different sections of the population have been growing at different paces. He said ‘within India, growing inequality will sooner rather than later create tensions and problems in our society which we will not be able to bear. We need to find ways now to make our growth much more equitable’. He emphasized the equitable growth should be the one which can empower people and give them the right opportunity to excel.

Kumar said there is an expectation that the economy will grow at 9.2 per cent this fiscal, 8.5 or 8.7 per cent in FY2023 and 7.5 per cent after that, making it one of the fastest growing economies in the world. He said ‘The question we need to ask is will that be good enough to meet the aspiration of our young population, to meet their ambition...this is not enough’. The challenge, he said, is to break through growth barriers soon. He pointed out ‘It is not simple but also not impossible. We need to have consistent, rapid and double-digit growth for the next two or three decades which will help us use our demographic dividend and also help us prevent our demographic dividend from turning into a waste and becoming difficult to handle’.

However, Kumar added that the growth which the country wants to achieve should not be at the cost of the environment. He said ‘We have to complete our economic transition in a manner that is green transition. It is a huge challenge again because very often in the past this has been seen as a trade-off between growth and environment, but we can't see it as a trade-off. We have to find ways and means to make it happen together’. According to Kumar, the private sector investment will be the driver of growth in the country going ahead.

The CNX Nifty is currently trading at 18223.90, down by 33.90 points or 0.19% after trading in a range of 18119.65 and 18228.35. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 2.21%, IOC up by 1.77%, Reliance Industries up by 0.85%, Larsen & Toubro up by 0.83% and BPCL up by 0.66%. On the flip side, Axis Bank down by 2.40%, HCL Technologies down by 2.15%, Asian Paints down by 1.85%, HDFC down by 1.21% and Wipro down by 1.08% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 441.25 points or 1.55% to 28,047.88, Hang Seng declined 248.64 points or 1.02% to 24,181.13, Taiwan Weighted fell 139.94 points or 0.76% to 18,296.99, KOSPI lost 40.57 points or 1.37% to 2,921.52, Jakarta Composite dropped 2.15 points or 0.03% to 6,656.21 and Shanghai Composite was down by 21.09 points or 0.59% to 3,534.17, while Straits Times rose 12.61 points or 0.39% to 3,269.91.