Indian equity markets have made negative start and are trading lower in early deals on Friday with the Sensex losing over 220 points and Nifty falling below the 16500 level, mirroring losses in other Asian markets, after reports that the US Fed is likely to start tapering its monthly asset purchases starting early 2022 or even in 2021. Traders were seen piling up position in Telecom, TECK, Power and IT, while selling was witnessed in Metal, Basic Materials, Bankex, PSU and Auto. Traders ignored report that Finance Minister Nirmala Sitharaman will launch an ambitious Ubharte Sitaare Fund for export-oriented firms and startups. The fund has been set up by Exim Bank and SIDBI. IT sector stocks were in focus as private report said that the government's information technology spending is projected to reach $8.3 billion in 2022, an increase of 8.6 per cent from 2021. Digitalization initiatives of Indian government organizations took a giant leap in 2020 because of the global Coronavirus (Covid-19) pandemic. The pandemic forced the government to shift priorities as supply chains and revenue streams dwindled.
On the global front, Asian markets are trading mostly lower on Friday as the fast-spreading delta virus strain stoked concerns about economic growth and China’s regulatory curbs sapped sentiment. The dollar was firm and commodities held a decline. The US markets ended mostly higher on Thursday after swinging between gains and losses throughout most of the session. Back home, stock specific development, shares of Mindtree hit a new record high of Rs 3,393, in an otherwise a weak market. In the past six months, the market price of Mindtree has appreciated 101 per cent as compared to a 9 per cent rise in the benchmark index.
The BSE Sensex is currently trading at 55403.44, down by 226.05 points or 0.41% after trading in a range of 55013.98 and 55430.82. There were 5 stocks advancing against 25 stocks declining on the index.
The broader indices were trading in red; the BSE Mid cap index was down by 0.44%, while Small cap index down by 0.28%.
The gaining sectoral indices on the BSE were Telecom up by 0.94%, TECK up by 0.28%, Power up by 0.25% and IT up by 0.20%, while Metal down by 3.34%, Basic Materials down by 1.64%, Bankex down by 0.94%, PSU down by 0.84% and Auto down by 0.69% were the losing indices on BSE.
The top gainers on the Sensex were Bharti Airtel up by 1.04%, Asian Paints up by 0.77%, Infosys up by 0.57%, Maruti Suzuki up by 0.38% and Hindustan Unilever up by 0.17%. On the flip side, Tata Steel down by 4.10%, Kotak Mahindra Bank down by 1.77%, Dr. Reddy's Lab down by 1.51%, SBI down by 0.92% and Axis Bank down by 0.91% were the top losers.
Meanwhile, Commerce and Industry Minister Piyush Goyal has said India is in “positive momentum” with respect to signing trade deals with the UK, Australia, Canada, Bangladesh, the European Union (EU), and Gulf Cooperation Council (GCC) nations. Goyal said while the government is working towards “early harvest” agreements with the UK and Australia as part of a larger trade pact, the US has indicated that it is not considering a new trade agreement with Indi.
India, he said, would look at working with the US on market access issues to promote bilateral trade. India has had extensive discussions with the US on a limited trade deal, but it didn't go through. He stated ‘UK is progressing well. Teams are talking to each other. Line ministries are identifying areas in which we can quickly close the deal in terms of early harvest, if possible. Instead of trying to address 11,000 (tariff) lines, we can look at their and our areas of interest and close an early harvest agreement and (then) negotiate on the rest of the agreement.’
Similarly, he said Australia has shown the “highest level of engagement” and significant interest to do an early harvest agreement. An early harvest deal is a precursor to a free trade agreement (FTA), in which trading partners reduce tariff barriers on limited goods to promote trade. Finalising a trade deal between India and the EU may not be a smooth ride, considering there are 27 nations in the trade bloc and talks have restarted after a gap of eight years. He said ‘We will work very hard to speed it up.’
The CNX Nifty is currently trading at 16489.50, down by 79.35 points or 0.48% after trading in a range of 16376.05 and 16495.00. There were 13 stocks advancing against 37 stocks declining on the index.
The top gainers on Nifty were SBI Life Insuran up by 1.57%, Bharti Airtel up by 1.02%, Asian Paints up by 0.85%, Infosys up by 0.49% and Maruti Suzuki up by 0.42%. On the flip side, Hindalco down by 4.53%, Tata Steel down by 4.21%, JSW Steel down by 3.50%, ONGC down by 3.09% and Kotak Mahindra Bank down by 1.66% were the top losers.
Asian markets are trading mostly in red; Nikkei 225 slipped 197.77 points or 0.72% to 27,083.40, Hang Seng lost 725.75 points or 2.87% to 24,590.58, KOSPI fell 21.60 points or 0.70% to 3,076.02 and Shanghai Composite was down by 57.40 points or 1.66% to 3,408.15. However, Straits Times rose 21.41 points or 0.69% to 3,108.38, Taiwan Weighted surged 42.94 points or 0.26% to 16,418.34 and Jakarta Composite gained 8.10 points or 0.12% to 5,999.64.