Indian equity benchmarks continued to trade lower in morning deals as concerns about the impact of elevated inflation and Covid-19 outbreaks on economic prospects weighs on sentiment. Traders also remained cautious as Niti Aayog CEO Amitabh Kant expressed concern over high food inflation due to higher prices of oilseeds and edible oils. Market participants paid no heed towards Services Export Promotion Council (SEPC) stating that the country's services exports are expected to grow 10 per cent in 2021-22 due to healthy growth of sectors such as professional and management consulting, audio visual, freight transport, and telecommunications. Traders also overlooked Finance Minister Nirmala Sitharaman’s statement that India's continuous wide-ranging reforms make the country an attractive destination for foreign investments. She also mentioned about stimulus packages announced recently; as well as strong, calibrated relief and reforms during COVID leading to sharp decline in new infections with ramping up of the vaccination programme. Meanwhile, RBI data showed that the country's foreign exchange reserves increased by $1.883 billion to touch a record high of $611.895 billion in the week ended July 9.
On the global front, Asian markets were trading in red as investors fretted about the impact of COVID-19 outbreaks and elevated inflation on global growth. Back home, on the sectoral front, there was some reaction in oil & gas industry stocks as Commerce and Industry Minister Piyuh Goyal said India has set a target of 20 per cent ethanol-blending with petrol by 2023-24 and the ultimate goal is to have 100 per cent ethanol-run vehicles.
The BSE Sensex is currently trading at 52760.40, down by 379.66 points or 0.71% after trading in a range of 52506.40 and 52821.17. There were 10 stocks advancing against 20 stocks declining on the index.
The broader indices were trading mixed; the BSE Mid cap index fell 0.07%, while Small cap index was up by 0.14%.
The top gaining sectoral indices on the BSE were Oil & Gas up by 0.56%, Utilities up by 0.52%, Telecom up by 0.49%, Healthcare up by 0.26% and Energy up by 0.21%, while Bankex down by 1.20%, Auto down by 0.65%, Consumer Disc down by 0.36%, IT down by 0.35% and Capital Goods down by 0.33% were the top losing indices on BSE.
The top gainers on the Sensex were NTPC up by 0.71%, Tata Steel up by 0.54%, ITC up by 0.53%, Titan Co up by 0.36% and Bharti Airtel up by 0.34%. On the flip side, HDFC Bank down by 2.38%, HDFC down by 2.10%, Indusind Bank down by 1.43%, Kotak Mahindra Bank down by 1.21% and Maruti Suzuki down by 0.98% were the top losers.
Meanwhile, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said that India’s economy will start witnessing a growth of 6.5 to 7 percent from fiscal 2023 onwards, helped by various reforms undertaken by the government so far and also as COVID-19 vaccination drive progresses. He said the second wave of COVID-19 is unlikely to have a very significant on the economy. The country's economy contracted by 7.3 per cent in fiscal 2020-21.
Subramanian said the momentum in recovery that was seen in the fourth quarter of FY21 and overall in the second half of FY21 got impacted to some extent by the second wave of COVID-19. While the second wave was quite devastating on the health side, he said the economic impact of that has been limited because the second way was much shorter in duration compared to the first wave and the economic restrictions that were placed were primarily at the state level.
CEA said the supply-side reforms undertaken by the government in sectors such as agriculture, labour, export PLI scheme, change in MSME definition, creation of the bad bank, privatisation of public sector banks among others, are going to push growth in the future. He said vaccination is important for the country to recover from the pandemic and to convert COVID-19 into effectively the common flu and reduce its impact significantly.
The CNX Nifty is currently trading at 15824.45, down by 98.95 points or 0.62% after trading in a range of 15735.95 and 15836.90. There were 20 stocks advancing against 30 stocks declining on the index.
The top gainers on Nifty were BPCL up by 1.92%, Indian Oil Corp. up by 1.08%, Divi's Lab up by 0.81%, ITC up by 0.77% and NTPC up by 0.63%. On the flip side, HDFC Bank down by 2.40%, HDFC down by 2.11%, Indusind Bank down by 1.45%, Kotak Mahindra Bank down by 1.23% and Maruti Suzuki down by 0.95% were the top losers.
All the Asian markets were trading in red; Hang Seng decreased 446.26 points or 1.59% to 27,558.42, Taiwan Weighted dropped 92.76 points or 0.52% to 17,802.49, Jakarta Composite lost 40.83 points or 0.67% to 6,031.68, KOSPI fell 29.51 points or 0.9% to 3,247.40, Shanghai Composite declined 11.14 points or 0.31% to 3,528.16, Straits Times trembled 26.55 points or 0.84% to 3,125.75 and Nikkei 225 slipped 321.68 points or 1.15% to 27,681.40.