Markets trim some of opening losses in early deals

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Friday mirroring weakness in global peers. Soon, markets trimmed some of their losses and are trading lower with cut of around half a per cent each in early deals. Selling in Consumer Durables, Bankex and Healthcare dragged the markets, whereas buying in FMCG and Auto stocks limit the downside. Persistent selling by FIIs weighted down on the markets. As per provisional data available on NSE, Foreign institutional investors (FIIs) sold shares worth Rs 4,679.84 crore on January 20. Some cautiousness came in as the government data showed that retail inflation for farm and rural workers rose to 4.78 percent and 5.03 percent respectively in December 2021, mainly due to higher price of certain food items. However, markets trimmed losses taking support with India Ratings and Research’s statement that the country’s economy is likely to grow at 7.6 per cent year-on-year in 2022-23.

Sell-off in the global markets weighted down on the domestic markets with most of the Asian markets trading lower following the broadly negative cues overnight from Wall Street, with weakness across all industry sectors, particularly technology stocks. 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 fresh curbs. Back home, NBFCs stocks were in focus as domestic rating agency Icra Ratings revised the asset under management (AUM) growth outlook of retail non-banking financial companies (NBFCs) to 5-7 per cent for the fiscal 2022 from an earlier expectation of 8-10 per cent. In scrip specific development, Reliance Industries remained in limelight ahead of its financial results to be out later in the day.

The BSE Sensex is currently trading at 59110.47, down by 354.15 points or 0.60% after trading in a range of 58683.01 and 59112.70. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.65%, while Small cap index was down by 0.08%.

The only gaining sectoral indices on the BSE were FMCG up by 0.31% and Auto up by 0.14%, while Consumer Durables down by 1.31%, Bankex down by 1.08%, Healthcare down by 1.01%, Realty down by 0.86%, TECK down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.84%, Hindustan Unilever up by 1.68%, Maruti Suzuki up by 0.57%, NTPC up by 0.56% and Asian Paints up by 0.24%. On the flip side, Bajaj Finserv down by 2.79%, Tech Mahindra down by 2.53%, Dr. Reddy's Lab down by 2.38%, Kotak Mahindra Bank down by 1.75% and Infosys down by 1.52% were the top losers.

Meanwhile, with a view to boost economic activities slowed down due to the impact of COVID-19, the Finance Ministry has relaxed spending norms for the fourth quarter in a bid to spur capital expenditure. As per the existing guidelines, more than 33 per cent and 15 per cent of the budget estimates (BE) shall be permissible to be spent by ministries and departments in the last quarter and last month of the financial year, respectively.

The Department of Economic Affairs under the Finance Ministry said it has now been decided to relax the upper limit of 33 per cent of the BE as applicable for the last quarter of the current financial year as a one-time measure. This is subject to the condition that the ceiling of revised estimate (RE) for 2021-22 is not exceeded.

It added ‘for the items of capital expenditure, the ceiling of 15 per cent of the BE in the last month for this fiscal is also relaxed, provided the capital or overall expenditure is within the RE 2021-22 ceiling’. In view of relaxation, ministries and departments have been asked to carry out consequential modifications in their quarterly expenditure plan (QEP)/monthly expenditure plan (MEP). The relaxation is applicable with immediate effect for the current financial year or until further order.

The CNX Nifty is currently trading at 17661.25, down by 95.75 points or 0.54% after trading in a range of 17525.35 and 17665.00. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 1.73%, Power Grid up by 1.72%, Hindalco up by 1.04%, Hero MotoCorp up by 0.90% and Bajaj Auto up by 0.73%. On the flip side, Bajaj Finserv down by 2.75%, Dr. Reddy's Lab down by 2.46%, Tech Mahindra down by 2.31%, Coal India down by 2.03% and Divi's Lab down by 1.95% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 401.32 points or 1.45% to 27,371.61, Straits Times fell 3.51 points or 0.11% to 3,291.31, Hang Seng lost 202.42 points or 0.81% to 24,749.93, Taiwan Weighted declined 292.95 points or 1.61% to 17,925.33, KOSPI plunged 35.50 points or 1.24% to 2,827.18 and Shanghai Composite was down by 29.68 points or 0.83% to 3,525.38, while Jakarta Composite rose 19.92 points or 0.30% to 6,646.79.