Bourses trade near neutral lines in late afternoon session

Markets traded near neutral lines with positive bias in late afternoon session. As for broader indices, Small cap index traded in red, while BSE Mid cap index continued to trade in green.  Traders were seen piling up positions in Power, Utilites and Energy sectors, while selling was witnessed in Bankex, Telecom and Healthcare sectors’ stocks. Traders took support after Finance Minister Nirmala Sitharaman pitched for expeditious and equitable distribution of vaccines to aid global recovery. She shared insights on India’s policy response to pandemic and suggested that recovery measures have to be built around a long-term vision. Sector wise, telecom sector remained in focused, as mobile user count in India fell by 12.8 million in December 2021 compared to the previous month, with Reliance Jio and Vodafone Idea suffering subscriber losses, even as Bharti Airtel added customers.

On the global front, Asian markets were trading mostly in green after notes from the latest Fed meeting showed officials are leaning toward more decision action on inflation but set no firm targets. However, European markets were trading lower as investors continued to monitor geopolitical tensions in eastern Europe, while digesting a slew of corporate earnings reports.

The BSE Sensex is currently trading at 58002.25, up by 5.57 points or 0.01% after trading in a range of 57635.43 and 58346.00. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.06%, while Small cap index was down by 0.27%.

The top gaining sectoral indices on the BSE were Power up by 1.92%, Utilities up by 1.53%, Energy up by 1.11%, Oil & Gas up by 0.64% and Capital Goods was up by 0.52%, while Bankex down by 0.88%, Telecom down by 0.38%, Healthcare down by 0.30%, PSU down by 0.26% and IT was down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.60%, Reliance Industries up by 1.21%, Tech Mahindra up by 0.61%, Larsen & Toubro up by 0.53% and Hindustan Unilever up by 0.53%. On the flip side, Axis Bank down by 1.80%, ICICI Bank down by 1.72%, Ultratech Cement down by 1.60%, Indusind Bank down by 1.30% and TCS down by 0.60% were the top losers.

Meanwhile, Acuite Ratings & Research in its latest report has said that India's FY22 current account deficit faces mild upside risk from high commodity prices. It said the wider merchandise trade deficits pulled India's Q2FY22 current account into the negative territory.

According to the report, the current account swung into negative territory with a deficit of $9.6 billion in Q2FY22 from a surplus of $6.6 billion in the preceding quarter. Recently, official data showed that the country's merchandise trade deficit widened by 20.23 per cent on a year-on-year basis to $17.42 billion in January 2022 from $14.49 billion in the like period of 2021. It had widened to $15.30 billion in January 2020. Merchandise trade deficit has a significant impact on current account deficit.

On net basis, the merchandise trade deficit could remain elevated as the recent surge in global commodity prices would have an adverse impact on India's terms of trade. Hence, if current levels of commodity prices hold (or increase further) in the near term, then ratings agency’s estimate of India's current account deficit of $46 billion in FY22 could face a mild upside risk.

On the trade front, the ratings agency pointed out that both merchandise exports and imports contracted sequentially in January 2022 amidst the global and domestic backdrop of rapid spread of the Omicron variant. For the first ten months of FY22, cumulative trade deficit stands at $160 billion, higher than $141 billion deficit seen in the corresponding pre-pandemic period of FY20.

The CNX Nifty is currently trading at 17337.55, up by 15.35 points or 0.09% after trading in a range of 17235.85 and 17442.90. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Consumer up by 2.86%, HDFC up by 2.10%, ONGC up by 1.72%, Reliance Industries up by 1.36% and HDFC Life Insurance up by 1.13%. On the flip side, Axis Bank down by 1.66%, Ultratech Cement down by 1.47%, ICICI Bank down by 1.30%, Indusind Bank down by 1.07% and Grasim Industries down by 0.74% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 73.87 points or 0.3% to 24,792.77, Taiwan Weighted strengthened 37.10 points or 0.2% to 18,268.57, KOSPI rose 14.41 points or 0.53% to 2,744.09, Straits Times advanced 9.38 points or 0.27% to 3,448.68 and Shanghai Composite was up by 2.21 points or 0.06% to 3,468.04. On the flip side, Jakarta Composite lost 15.08 points or 0.22% to 6,835.12 and Nikkei 225 was down by 227.53 points or 0.83% to 27,232.87.

European markets were trading lower, UK’s FTSE 100 decreased 31.67 points or 0.42% to 7,572.11, France’s CAC decreased 2.53 points or 0.04% to 6,962.45 and Germany’s DAX was down by 14.86 points or 0.1% to 15,355.44.