Indian equity benchmarks continued to trade lower in morning session, on account of selling in frontline blue chip counters. The mood on the street remained cautious with the labour ministry’s statement that retail inflation for farm workers and rural labourers rise marginally to 3.92 per cent and 4.09 per cent in July, as compared to the previous month. The numbers in June had stood at 3.83 per cent and 4 per cent, respectively. Besides, fall in rupee value against dollar along with a weak trend at other Asian markets also dented the trading sentiments. Traders overlooked rating agency ICRA’s report that India's Gross domestic product (GDP) growth is estimated to come at the deceptively high level of 20 percent and the gross value added (GVA) will register a growth of 17 percent for the April-June 2021 quarter (Q1FY22) but is far below the same in the pre-COVID times.
On the global front, Asian markets were trading mostly in red following the mixed cues overnight from Wall Street, with falling commodity prices, renewed worries about slowing global economic recovery and uncertainty over Federal Reserve policy moves keeping investors nervous. The alarming spread of the highly contagious coronavirus variants in the region is also hurting sentiment. Back home, on the sectoral front, sugar industry’s stocks remained in focus as rating agency ICRA said firmed-up global prices have brightened the prospects of sugar exports from India for the 2021-22 marketing year starting October, even without the government subsidy. For the last two years, sugar exports have been undertaken with a government subsidy for a mandated quantity alone. About 6 million tonne quota was fixed for the 2020-21 marketing year (September-October) and mills have exported more than 90 per cent of it so far.
The BSE Sensex is currently trading at 55354.00, down by 275.49 points or 0.50% after trading in a range of 55013.98 and 55495.60. There were 7 stocks advancing against 23 stocks declining on the index.
The broader indices were trading in red; the BSE Mid cap index fell 1.19%, while Small cap index was down by 1.05%.
The top gaining sectoral indices on the BSE were FMCG up by 0.42%, Telecom up by 0.13%, TECK up by 0.08% and IT up by 0.02%, while Metal down by 5.74%, Basic Materials down by 3.05%, Realty down by 2.42%, PSU down by 1.85% and Auto down by 1.60% were the top losing indices on BSE.
The top gainers on the Sensex were Hindustan Unilever up by 2.57%, Asian Paints up by 1.86%, HDFC up by 0.81%, Bharti Airtel up by 0.57% and Bajaj Finance up by 0.43%. On the flip side, Tata Steel down by 6.32%, Dr. Reddy's Lab down by 2.54%, Kotak Mahindra Bank down by 2.34%, Larsen & Toubro down by 2.01% and ICICI Bank down by 1.55% were the top losers.
Meanwhile, rating agency ICRA in its latest report has said that India's Gross domestic product (GDP) growth is estimated to come at the deceptively high level of 20 percent and the gross value added (GVA) will register a growth of 17 percent for the April-June 2021 quarter (Q1FY22) but is far below the same in the pre-COVID times. It said the low base of the last year, when the GDP had contracted by close to 24 percent, conceals the impact of the second wave of COVID-19 infections.
According to the report, economic activity is boosted by robust government capital expenditure, merchandise exports, and demand from the farm sector. It also said the GVA is estimated to contract 15 percent when compared to the preceding March quarter, which shows the impact of the second wave. It added that the double-digit expansion expected in YoY terms in Q1FY22 is deceptively high, as it benefits inordinately from last year's contracted base.
Based on its assessment of volumes and available earnings, ICRA is forecasting a GVA expansion in the industry at a considerable 37.5 percent, led by construction and manufacturing, which experienced significantly fewer curbs in the just-concluded quarter compared to the situation during last year's stringent nationwide lockdown. With a contraction in the Government of India's (GoI's) non-interest non-subsidy revenue expenditure and continued impairment in demand for contact-intensive services, the agency expects GVA in the services sector to post a relatively lower expansion of 12.7 percent in Q1FY22.
The CNX Nifty is currently trading at 16439.75, down by 129.10 points or 0.78% after trading in a range of 16376.05 and 16509.55. There were 10 stocks advancing against 40 stocks declining on the index.
The top gainers on Nifty were Hindustan Unilever up by 2.53%, Asian Paints up by 1.75%, HDFC up by 0.74%, Infosys up by 0.15% and Nestle up by 0.12%. On the flip side, JSW Steel down by 6.77%, Tata Steel down by 6.31%, Hindalco down by 5.69%, ONGC down by 3.93% and UPL down by 2.83% were the top losers.
Asian markets were trading mostly in red; Hang Seng decreased 576.73 points or 2.28% to 24,739.60, Nikkei 225 slipped 224.13 points or 0.82% to 27,057.04, Shanghai Composite declined 57.40 points or 1.66% to 3,408.15 and KOSPI fell 27.31 points or 0.88% to 3,070.52.
On the flip side, Jakarta Composite soared 18.74 points or 0.31% to 6,011.06, Straits Times advanced 23.75 points or 0.77% to 3,110.72 and Taiwan Weighted strengthened 59.76 points or 0.36% to 16,435.16.