Benchmarks continue to trade in red in morning deals

Indian equity benchmarks continued to trade in red in morning deals, led by weakness in Capital Goods, Auto and Healthcare stocks. Traders remain concerned as rating agency Moody’s Investors Service said Indian economy’s fiscal strength is unlikely to improve in the medium term, thus remaining a key credit challenge compared with peers, even as the FY23 budget’s focus on capital expenditure will support near-term growth. However, losses remain capped as traders took some support with Commerce and Industries Minister Piyush Goyal stating that promoting exports through subsidies has not really given the desired results, but the government's RoDTEP (Remission of Duties and Taxes on Export Products) scheme is helping grow exports which is expected to reach a record $400 billion this year. On the global front, Asian markets were trading mixed after stunningly strong U.S. jobs data soothed concerns about the global economy but also added to the risk of an aggressive tightening by the Federal Reserve.

The BSE Sensex is currently trading at 58,307.07, down by 337.75 points or 0.58% after trading in a range of 58235.31 and 58707.76. 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 0.59%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Metal up by 1.49%, Utilities up by 1.09%, Power up by 0.77%, Energy up by 0.29% and Basic Materials up by 0.28%, while Capital Goods down by 1.55%, Auto down by 1.16%, Healthcare down by 1.07%, Consumer discretionary down by 0.82% and Consumer Durables down by 0.63% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.53%, Tata Steel up by 2.74%, Power Grid Corporation up by 1.26%, NTPC up by 0.89% and Tech Mahindra up by 0.56%. On the flip side, Larsen & Toubro down by 2.13%, Bajaj Finance down by 1.88%, HDFC Bank down by 1.62%, Mahindra & Mahindra down by 1.31% and ICICI Bank down by 1.25% were the top losers. 

Meanwhile, India Ratings and Research (Ind-Ra) has said covid-19's third wave is expected to have a benign impact on the hotel industry due to lesser restrictions along with the sector's pro-active preparation. According to the ratings agency, the impact across the sector will be lower because of lesser restrictions by Central and state governments than in the first and second waves.

Moreover, it stated as witnessed during the first two waves, the ebbing of the infection wave starts from metro cities; therefore, the minimal restrictions by the government and self-restrictions by the people will start blurring away in a couple of months.

Besides, it pointed out that unlike the first two waves, the overall impact will be benign due to the pro-active preparation by the sector in terms of cost cutting during the times when the cases begin to rise. However, it cited that recovery of the sector will be more protracted and patchier than its base case. It assumed near normal occupancy in FY23 but mass cancellation of planned events on the back of limits on number of attendees will impact the sector.

The CNX Nifty is currently trading at 17,516.30, down by 43.90 points or 0.25% after trading in a range of 17387.10 and 17536.75. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hindalco Industries up by 2.45%,ONGC up by 1.28%,  Sun Pharmaceutical up by 1.12%, Asian Paints up by 1.00% and Divi's Laboratories up by 0.95%. On the flip side, Hero MotoCorp down by 2.25%, SBI down by 1.97%, Mahindra & Mahindra down by 1.92%, NTPC down by 1.79% and Eicher Motors down by 1.57% were the top losers.

Asian markets were trading mixed; Taiwan Weighted strengthened 187.82 points or 1.06% to 17,862.22, Shanghai Composite gained 64.08 points or 1.91% to 3,425.52, Jakarta Composite soared 46.25 points or 0.69% to 6,777.64 and Straits Times advanced 10.77 points or 0.32% to 3,342.18.

On the flip side, KOSPI fell 7.66 points or 0.28% to 2,742.60, Hang Seng decreased 76.24 points or 0.31% to 24,497.05 and Nikkei 225 slipped 225.99 points or 0.82% to 27,214.00.