Indian equity benchmarks erased initial gains and slipped over half a percent in morning trades on account of selling in frontline counters. Sentiments turned pessimistic with a private report stated that lockdowns imposed by the states in April and May to contain the second wave of the deadly COVID-19 pandemic has likely led to the economy contracting 12 per cent in the June quarter as against 23.9 per cent contraction in the same quarter in 2020. Traders also took a note of assessment made by the Reserve Bank stating that the devastating second wave of the coronavirus pandemic in April-May is estimated to have cost the nation Rs 2 lakh crore in terms of output. It also said the second wave's toll is mainly in terms of the hit to domestic demand on account of regional and specific containment rather than a nation-wide lockdown. Meanwhile, India maintained 43rd rank on an annual World Competitiveness Index compiled by the Institute for Management Development (IMD) that examined the impact of COVID-19 on economies around the world this year.
On the global front, Asian markets were trading mostly in red as investors continued to digest comments from the U.S. Federal Reserve projecting interest rate hikes in 2023. While the Fed messaging indicated no clear end to supportive policy measures such as bond-buying, signals of faster-than-expected rate hikes indicated concerns about inflation as the U.S. economy recovers from the COVID-19 pandemic. Back home, on the sectoral front, IT sector’s stocks remained in watch as Nasscom said the sector continues to be a net hirer of skilled talent, and that the top 5 Indian IT companies are planning to add over 96,000 employees in 2021-22.
The BSE Sensex is currently trading at 51980.65, down by 342.68 points or 0.65% after trading in a range of 51912.35 and 52586.41. There were 5 stocks advancing against 25 stocks declining on the index.
The broader indices were trading in red; the BSE Mid cap index fell 1.86%, while Small cap index was down by 1.80%.
The top losing sectoral indices on the BSE were Metal down by 3.40%, Power down by 2.84%, Utilities down by 2.83%, PSU down by 2.54% and Realty down by 2.35%, while there were no gaining sectoral indices on the BSE.
The top gainers on the Sensex were Bajaj Auto up by 0.67%, Hindustan Unilever up by 0.50%, Dr. Reddys Lab up by 0.19%, HDFC Bank up by 0.06% and Infosys up by 0.04%. On the flip side, ONGC down by 3.40%, SBI down by 2.72%, Power Grid down by 2.50%, Mahindra & Mahindra down by 1.80% and NTPC down by 1.54% were the top losers.
Meanwhile, the Confederation of Indian Industry (CII) has said that the Indian economy requires a Rs 3 lakh crore fiscal stimulus, including cash transfer to households through Jan Dhan accounts to spur economic growth amid the pandemic. It also pitched for appointment of a 'Vaccine Czar' for speedy vaccination coverage. It also expects GDP to grow at 9.5 percent in 2021-22 as the strong growth in the second half of the fiscal year will be supported by robust external demand and large-scale coverage of vaccination, allowing resumption of economic activity.
CII has stated that the suitable fiscal measures to alleviate the stress of people impacted by the second wave of COVID-19 are the need of the hour. It said the Indian economy is a consumption-led economy and the pandemic has impacted the consumer demand. Due to this, the chamber has called for measures such as cash transfer as a number of actions are needed to deal with this demand shock.
Measures suggested by it include enhanced MNREGA allocations from the budgeted amount; short-term and focused GST cuts to boost demand; time bound tax relief/interest subvention/stamp duty concession for home buyers; LTC cash voucher scheme like last year; and extension of the Aatmanirbhar Bharat Rozgar Yojana till March 31, 2022. It also asked for ensuring timely payment to companies including MSMEs; accelerating public works programmes to ensure implementation of NIP; hiking ECLGS (Emergency Credit Line Guarantee Scheme) amount to Rs 5 lakh crore, reduction in excise duty on fuel and inclusion of ATF (aviation turbine fuel) and other fuel products in GST (Goods and Services Tax).
The CNX Nifty is currently trading at 15560.00, down by 131.40 points or 0.84% after trading in a range of 15550.25 and 15761.50. There were 7 stocks advancing against 43 stocks declining on the index.
The top gainers on Nifty were Adani Ports &SEZ up by 0.82%, Bajaj Auto up by 0.73%, Hindustan Unilever up by 0.40%, Dr. Reddys Lab up by 0.29% and Divi's Lab up by 0.22%. On the flip side, JSW Steel down by 4.07%, ONGC down by 3.56%, Tata Steel down by 3.41%, Tata Motors down by 3.25% and SBI down by 2.99% were the top losers.
Asian markets were trading mostly in red; Jakarta Composite lost 110.43 points or 1.82% to 5,958.02, Taiwan Weighted dropped 44.67 points or 0.26% to 17,345.94, Shanghai Composite declined 17.31 points or 0.49% to 3,508.29, Nikkei 225 slipped 16.82 points or 0.06% to 29,001.51 and Straits Times trembled 8.07 points or 0.26% to 3,130.24.
On the flip side, KOSPI rose 4.25 points or 0.13% to 3,269.21 and Hang Seng increased 169.55 points or 0.59% to 28,728.14.