Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in afternoon session, with Sensex and Nifty trading below at 59,600 and 17800 levels, respectively. Sentiments were downbeat as the UN trade body said that Foreign Direct Investment (FDI) flows to India in 2021 were 26 per cent lower, mainly because large M&A deals recorded in 2020 were not repeated. Additional pressure come as rating agency Icra said while there is some evidence of the economic recovery becoming broad-based in the third quarter of fiscal 2022, it is yet to attain the durability being sought by the Monetary Policy Committee (MPC) as a precursor to policy transmission. The agency expects the real GDP to expand 6-6.5 per cent year-on-year in the third quarter of FY2022 (+8.4 per cent in Q2 FY2022).

On the global front, Asian markets were trading mostly higer as investors tentatively returned to buying after recent losses, with Chinese property firms enjoying a much-needed lift on fresh easing measures by the country's central bank. Back home, in scrip specific developments, Dhunseri Tea zoomed on inking MoU with Warren Tea to acquire Balijan North Tea Estate and SBI gained as Govt sanctions Rs 973.74 crore for ex-gratia payment to borrowers.

The BSE Sensex is currently trading at 59587.24, down by 511.58 points or 0.85% after trading in a range of 59476.94 and 60045.48. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Power up by 0.85%, Utilities up by 0.79%, PSU up by 0.67%, Metal up by 0.65% and Basic Materials was up by 0.42%, while IT down by 1.35%, TECK down by 1.15%, Energy down by 1.02%, FMCG down by 0.63% and Healthcare was down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 3.27%, Bharti Airtel up by 1.40%, Ultratech Cement up by 0.99%, Maruti Suzuki up by 0.84% and Tata Steel was up by 0.62%. On the flip side, Bajaj Finserv down by 2.36%, HDFC down by 2.12%, Infosys down by 2.05%, Hindustan Unilever down by 1.94% and Dr. Reddy's Lab was down by 1.81% were the top losers.

Meanwhile, Moody's Investors Service in its latest report has said that post-pandemic recovery will sustain growth in insurance premiums, improving profitability amid favourable government reforms in the state-owned insurance sector. It said the Indian insurance industry's growth prospects are favourable, underpinned by an expected 9.3 per cent GDP expansion in fiscal 2021, which ends March 2022, and by strong demand for health insurance in the wake of the pandemic,.

According to the report, total premiums grew 9 per cent in the first nine months of fiscal 2021, slightly ahead of the 8.6 per cent increase in fiscal 2020, with general insurance premiums (including health) up 11 per cent and life new business premiums rising seven per cent. It also said robust premium growth is positive for insurers' profitability, which is currently weak because of persistently low prices and the rising cost of claims.

The report further said the government's plans to recapitalise India's dominant state-owned insurers and list the country's biggest insurer, Life Insurance Corporation of India (LIC), on the stock market will encourage a more disciplined approach to underwriting in the respective general and life insurance sectors. It said this will pave the way for price increases across the market, further supporting insurers' profitability. It added that rising premiums and prices, in turn, will help insurers absorb higher claims. This pushed the average net loss ratio for general insurers to 95 per cent in the first three months of the financial year 2020-21 from 81 per cent in the previous year.

The CNX Nifty is currently trading at 17796.30, down by 142.10 points or 0.79% after trading in a range of 17768.40 and 17943.70. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 3.25%, Coal India up by 2.10%, Tata Consumer Products up by 1.46%, Bharti Airtel up by 1.46% and Grasim Industries was up by 1.36%. On the flip side, Bajaj Auto down by 3.26%, Bajaj Finserv down by 2.34%, Divi's Lab down by 2.28%, HDFC down by 2.19% and Infosys was down by 2.04% were the top losers.

Asian markets were trading mostly higher; KOSPI rose 19.43 points or 0.68% to 2,861.71, Hang Seng increased 629.43 points or 2.61% to 24,757.28, Nikkei 225 surged 305.70 points or 1.11% to 27,772.93, Jakarta Composite soared 38.84 points or 0.59% to 6,630.82, Shanghai Composite gained 1.07 points or 0.03% to 3,559.25 and Straits Times was up by 7.68 points or 0.23% to 3,291.62.

On the other hand, Taiwan Weighted was down by 9.18 points or 0.05% to 18,218.28.