Selling which emerged in late trade mainly spoil sport for Indian equity and dragged the frontline gauges below their neutral lines as traders opted to book their initial gains. Markets started the day on positive note as traders took encouragement with Chief Economic Adviser (CEA) K V Subramanian’s statement that a number of reforms undertaken by the government in the last one year especially focused on removing supply side frictions are expected to spur investment, including foreign investment. Markets traded with traction for most part of the day as Finance Minister Nirmala Sitharaman exhorted ministries to aim to achieve more than their capital expenditure (capex) targets for this fiscal, highlighting that enhanced spending will play a critical role in revitalising the economy post-pandemic. Some support also came as the Union Cabinet may soon clear a proposal to provide government guarantee to security receipts issued by the National Asset Reconstruction Company (NARCL) as part of resolution of bad loans. Indian Banks' Association (IBA), entrusted with the task of setting up a bad bank, has pegged the government guarantee to be around Rs 31,000 crore.
However, markets failed to hold on to their initial gains and selling in last leg of trade dragged markets lower as traders turned cautious after the Reserve Bank of India (RBI) in its latest data has showed that credit growth to the industrial sector remained in the negative territory during 2020-21, mainly due to the COVID-19 pandemic and resultant lockdowns. Weakness in European counters too dampened sentiments all the European counters were trading in red as worries about rising inflation and the Delta variant of the novel coronavirus hit economically sensitive sectors, even as technology stocks tracked an overnight surge in their U.S. peers. Asian markets ended mostly in green as investors were buoyed by optimism over a strong economic recovery despite fears over rising virus cases around the world.
Back home, pharma stocks remained in focus as sector majors including Cipla, Dr Reddy’s Laboratories, Sun Pharmaceutical Industries and Torrent Pharmaceuticals will collaborate for the clinical trial of the investigational oral anti-viral drug Molnupiravir for the treatment of mild COVID-19 in an outpatient setting in India. Banking stocks remained in focus with Standard and Poor's report that Indian banks face systemic risks as the country wades through the aftermath of the Covid-19 second wave. The banking sector's weak loans are likely to remain elevated at 11-12 per cent of gross loans in the next 12-18 months.
The BSE Sensex ended at 52482.71, down by 66.95 points or 0.13% after trading in a range of 52448.64 and 52875.92. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)
The broader indices ended mixed; the BSE Mid cap index slipped 0.03%, while Small cap index was up by 0.56%. (Provisional)
The top gaining sectoral indices on the BSE were IT up by 0.87%, Energy up by 0.66%, TECK up by 0.64%, Industrials up by 0.53% and Capital Goods up by 0.31%, while Utilities down by 1.20%, Power down by 0.91%, Bankex down by 0.61%, Oil & Gas down by 0.50%, Realty down by 0.43% were the top losing indices on BSE. (Provisional)
The top gainers on the Sensex were Reliance Industries up by 1.19%, Infosys up by 1.11%, Nestle up by 0.85%, Maruti Suzuki up by 0.74% and Tech Mahindra up by 0.73%. On the flip side, Bajaj Finserv down by 1.66%, Power Grid down by 1.55%, ICICI Bank down by 1.44%, NTPC down by 1.11% and HDFC down by 0.93% were the top losers. (Provisional)
Meanwhile, Finance Minister Nirmala Sitharaman has exhorted ministries to aim to achieve more than their capital expenditure (capex) targets for this fiscal (FY22), highlighting that enhanced spending will play a critical role in revitalising the economy post-COVID pandemic. She also urged the ministries and their Central Public Sector Enterprises (CPSEs) to ensure clearance of Micro, Small and Medium Enterprises (MSME) dues by July 31.
Sitharaman further urged the ministries to explore Public Private Partnership (PPP) mode for viable projects. While reviewing the capital expenditure performance of the ministries and their CPSEs, she emphasised that enhanced CAPEX will play a critical role in revitalising the economy post-pandemic and encouraged the ministries to front-load their capital expenditure. Union Budget for 2021-22 has provided a capital outlay of Rs 5.54 lakh crore, an increase of 34.5 percent over the Budget Estimate of 2020-21. However, she said the efforts from the budgetary side to increase the capital expenditure have to be complemented by the public sector enterprises.
The minister further said infrastructure expenditure is not just the central government budgetary expenditure on infrastructure but also includes infrastructure spending by state governments and private sector. It also includes government expenditure through extra-budgetary resources. Therefore, she said, ministries are to actively work on getting projects funded through innovative structuring and financing and provide all support to private sector for enhancing infrastructure spending.
The CNX Nifty ended at 15721.50, down by 26.95 points or 0.17% after trading in a range of 15708.75 and 15839.10. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)
The top gainers on Nifty were Coal India up by 1.49%, Divi's Lab up by 1.20%, Infosys up by 1.14%, Reliance Industries up by 1.09% and SBI Life Insurance up by 0.88%. On the flip side, Shree Cement down by 2.24%, UPL down by 1.56%, Bajaj Finserv down by 1.55%, Power Grid Corp down by 1.53% and ICICI Bank down by 1.44% were the top losers. (Provisional)
European markets were trading lower, UK’s FTSE 100 decreased 33.35 points or 0.47% to 7,054.20, France’s CAC decreased 47.03 points or 0.72% to 6,520.40 and Germany’s DAX was down by 142.81 points or 0.91% to 15,547.78.
Asian markets settled mostly higher on Wednesday even as the market remained a bit cautious amid worries about highly contagious Delta variant of the coronavirus that are quickly spreading in Asia. Meanwhile, investors are awaited the US monthly payroll data due later in the week for further clues on the US Federal Reserve’s monetary policy moving forward. Chinese shares ended higher on surge in major tech indexes that posted biggest quarterly gains in a year on policy support from Beijing and strong earnings expectations, but gains were capped after data showed that factory and service sector activity rose the least in four months amidst outbreaks of corona-virus in select regions. However, Japanese shares dipped on concerns over the outlook of the economy.
Asian Indices | Last Trade | Change in Points | Change in % |
Shanghai Composite | 3,591.20 | 18.02 | 0.50 |
Hang Seng | 28,827.95 | -166.15 | -0.57 |
Jakarta Composite | 5,985.49 | 36.44 | 0.61 |
KLSE Composite | 1,532.63 | -15.68 | -1.01 |
Nikkei 225 | 28,791.53 | -21.08 | -0.07 |
Straits Times | 3,130.46 | 40.97 | 1.33 |
KOSPI Composite | 3,296.68 | 10.00 | 0.30 |
Taiwan Weighted | 17,755.46 | 157.27 | 0.89 |