Indian benchmarks continue to trade in red in morning session

Indian equity benchmarks continued to trade in red in morning session amid weakness across global markets. Traders remained cautious 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. Some concern also came with domestic rating agency ICRA’s report stated that the recent surge in fresh Covid infections as well as subsequent localised lockdowns emanating from Omicron spread are likely to shave off around 100 bps of growth in toll collections in fiscal year 2021-22. Meanwhile, Union minister Nitin Gadkari has emphasised the need for attracting more foreign investments into the MSME sector as such entities are giving excellent viability and income to investors.

On the global front, Asian markets are trading mostly in red following the broadly negative cues overnight from Wall Street as concerns lingered over the Federal Reserve's tightening, U.S.-Russian tensions over Ukraine continued to simmer. Back home, on the sectoral front, stocks related to auto components industry remained in watch as private report stated that the domestic auto components industry is expected to see a revenue growth of 15-17 per cent this fiscal and 10-12 per cent in the next financial year on the back of recovery in automobile sales after having remained subdued in the last couple of years.

The BSE Sensex is currently trading at 58947.12, down by 517.50 points or 0.87% after trading in a range of 58683.01 and 59214.90. 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 0.88%, while Small cap index was down by 0.46%.

The few gaining sectoral indices on the BSE were FMCG up by 0.54% and Auto up by 0.07%, while Telecom down by 2.01%, Consumer Durables down by 1.82%, Bankex down by 1.54%, Realty down by 1.30% and TECK down by 1.09% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.18%, Power Grid Corporation up by 1.03%, Maruti Suzuki up by 0.75%, NTPC up by 0.56% and ITC up by 0.43%. On the flip side, Bajaj Finserv down by 3.97%, Tech Mahindra down by 3.03%, Bharti Airtel down by 2.45%, Axis Bank down by 2.43% and Dr. Reddy's Lab down by 2.10% were the top losers.

Meanwhile, domestic rating agency Icra Ratings said that it has revised the asset under management (AUM) growth outlook of retail non-banking financial companies (NBFCs) to 5-7 per cent for the current fiscal (FY22) from an earlier expectation of 8-10 per cent. In the first half of FY22, retail NBFCs grew by less than one per cent.

The agency said the growth outlook would be exposed to downside risk in case of significant disruptions caused by the new wave of infections in Q4 FY22. At present, while the infections rates remain high, the operational disruptions have been quite limited. 

The agency's Vice President (financial sector ratings) A M Karthik said ‘apart from the various regulatory changes over the last 3-4 months (such as scale-based regulations, prompt corrective action framework etc) and a muted H1 FY22, we note that some of the key segments of retail-NBFCs, especially vehicle finance, are faced with supply-side constraints, which could pull-down growth vis a vis our expectation, even if the demand remains less impacted by the new wave of infections.’

The CNX Nifty is currently trading at 17613.85, down by 143.15 points or 0.81% after trading in a range of 17525.35 and 17680.10. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.17%, Tata Consumer Product up by 1.76%, Bajaj Auto up by 1.52%, Hero MotoCorp up by 1.18% and Power Grid Corporation up by 1.09%. On the flip side, Bajaj Finserv down by 3.84%, Tech Mahindra down by 2.98%, Coal India down by 2.70%, Adani Ports &SEZ down by 2.51% and Shree Cement down by 2.43% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted dropped 319.39 points or 1.75% to 17,898.89, Nikkei 225 slipped 367.92 points or 1.32% to 27,405.01, Hang Seng decreased 186.09 points or 0.75% to 24,766.26, KOSPI fell 42.06 points or 1.47% to 2,820.62, Straits Times trembled 1.42 points or 0.04% to 3,293.40 and Shanghai Composite declined 29.68 points or 0.83% to 3,525.38.

On the flip side, Jakarta Composite soared 35.87 points or 0.54% to 6,662.74.