Weak trade continues over Dalal Street

Weak trade continued over the Dalal Street in late morning session, with both Sensex and Nifty trading in red. Negative cues from other Asian markets impacted domestic sentiments. Fears over Russian shelling at Europe's biggest nuclear plant in Ukraine also weighed on the market sentiment. Traders got worried, as The CBIC cautioned the public against sharing Aadhaar and PAN details without a valid reason or for monetary gains, saying that the information could be misused by fraudsters for GST evasion. Besides, the Federation of Automobile Dealers Associations (FADA) has said that domestic passenger vehicle (PV) retail sales declined 8 per cent in February 2022 as the companies continued to suffer production loss due to chip shortage. The PV sales dropped to 2,38,096 units in February, down 7.84 per cent from 2,58,337 units in February 2021.

On the global front, Asian markets were trading mostly in red, after the unemployment rate in Japan came in at a seasonally adjusted 2.8 percent in January. The Ministry of Internal Affairs and Communications said that exceeded expectations for 2.7 percent, which would have been unchanged from the December reading. The jobs-to-applicant ratio was 1.20, beating forecasts for 1,16, which would have been steady from the previous month.

The BSE Sensex is currently trading at 54298.06, down by 804.62 points or 1.46% after trading in a range of 53887.72 and 54653.59. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.00%, while Small cap index was down by 1.20%.

The only gaining sectoral index on the BSE was IT up by 0.03%, while Auto down by 2.90%, Consumer discretionary down by 2.86%, Consumer Durables down by 2.76%, Realty down by 2.52% and Telecom down by 2.20% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 1.69%, ITC up by 1.28%, Sun Pharma up by 0.53%, Tech Mahindra up by 0.33% and HCL Tech. up by 0.21%. On the flip side, Asian Paints down by 5.09%, Maruti Suzuki down by 5.01%, Hindustan Unilever down by 4.79%, Axis Bank down by 3.63% and Titan Co down by 3.26% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that the Indian aviation industry is expected to report a net loss of Rs 25,000-26,000 crore this fiscal (FY22). It said elevated aviation turbine fuel (ATF) prices, (which were 68 per cent higher year-on-year basis in 11 months of the ongoing fiscal FY2022) and continued fare caps continue to pose a major challenge for the profitability of the airlines. However, it said the domestic airlines are likely to post a reduced net loss of Rs 14,000-16,000 crore in the next financial year on the back of a notable recovery in air passenger traffic and lower level of debt. It also estimates that the industry will require an additional funding in the range of Rs 20,000-22,000 crore during FY22-FY24.

The ratings agency expects domestic air passenger traffic to witness a strong y-o-y growth of 50-55 per cent in 2021-22 supported by the fast pace of vaccination and gradual relaxations in restrictions by the regulatory authorities. However, it said this recovery will be on a much lower base of FY2021. It added that this will be significantly lower than the pre-COVID-19 levels, given that the recovery to pre-COVID-19 levels is expected by FY2024. With the onset of the second wave of the pandemic and the later emergence of the Omicron variant, the recovery in passenger traffic remained gradual in the current fiscal.

According to the report, the recovery in domestic air passenger traffic is expected to be supported by pent-up demand in the leisure travel segment and gradual recovery in business travel as corporate offices move towards the resumption phase, after the third wave. It stated that the impact of the pandemic has been more profound and long-lasting on international travel, compared to domestic travel, with scheduled international operations still under suspension. It said in the near term, the balance sheets of Indian carriers will remain stressed until the carriers are able to reduce their debt burden through a combination of improvement in operating performance and/ or through equity infusion.

The CNX Nifty is currently trading at 16239.20, down by 258.85 points or 1.57% after trading in a range of 16133.80 and 16364.85. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 1.71%, UPL up by 1.51%, ITC up by 1.28%, Sun Pharma up by 0.61% and Tech Mahindra up by 0.45%. On the flip side, Asian Paints down by 5.08%, Maruti Suzuki down by 4.94%, Hindustan Unilever down by 4.83%, Axis Bank down by 3.51% and Hero MotoCorp down by 3.28% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 599.89 points or 2.67% to 21,867.45, Nikkei 225 slipped 591.49 points or 2.23% to 25,985.78, Taiwan Weighted dropped 189.89 points or 1.06% to 17,744.51, KOSPI fell 32.33 points or 1.18% to 2,714.75, Shanghai Composite declined 22.81 points or 0.66% to 3,458.30 and Straits Times trembled 16.61 points or 0.51% to 3,237.04. On the flip side, Jakarta Composite soared 37.04 points or 0.54% to 6,905.44.