Published on 26/11/2020 1:04:30 PM | Source: LKP Securities Ltd

Benchmarks extend losses in afternoon session - LKP Securities

Posted in Market Outlook| #Market Outlook #LKP Securities Ltd

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Benchmarks extend losses in afternoon session

Indian bourses extended their losses in afternoon session with Sensex and Nifty trading down by 184 and 56 points respectively. Stocks from oil and gas, banking and IT counters were trading lower, while consumer durables, healthcare and telecom counters were supporting the markets. Traders were concerned with the Reserve Bank of India’s (RBI) report 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks (SCBs), September 2020' - indicating that bank credit growth decelerated to 5.8 percent in Q2 (July- September) of FY21 from 8.9 percent in the year-ago period. Meanwhile, RBI Governor Shaktikanta Das stated that after seeing a sharp GDP contraction in the first quarter, the Indian economy has exhibited a stronger than expected momentum in activity. However, he added that even as growth outlook has improved, downside risks remain with respect to the surge in Covid infections and thus the situation needs to be watched carefully.

On the global front, Asian markets were trading mostly higher with the continued optimism about the economic recovery and control over viral infections counting on the news about development of the covid vaccine. Back on street, in scrip specific development, Alembic Pharmaceuticals surged after its JV gets tentative approval for Testosterone Gel and Route Mobile jumped on winning contract from BSNL.

The BSE Sensex is currently trading at 43643.38, down by 184.72 points or 0.42% after trading in a range of 43582.40 and 44023.26. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.07%, while Small cap index was up by 0.08%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.49%, Healthcare up by 0.32%, Telecom up by 0.32%, Basic Materials up by 0.05% and Realty up by 0.01%, while Oil & Gas down by 0.81%, Bankex down by 0.70%, IT down by 0.63%, Utilities down by 0.58% and TECK was down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.54%, HCL Tech up by 1.21%, Bajaj Auto up by 0.97%, Titan Company up by 0.95% and Bajaj Finance was up by 0.66%. On the flip side, Maruti Suzuki down by 1.95%, Indusind Bank down by 1.69%, Infosys down by 1.50%, Tech Mahindra down by 1.47% and Asian Paints was down by 1.23% were the top losers.

Meanwhile, research firm International Data Corporation (IDC) has said that India's IT and business services market is expected to grow 5.4 percent annually to reach $13 billion by December 2020. The segment grew 5.3 percent year-on-year (y-o-y) in January-June (H1) 2020 period as compared to 8.9 percent growth in H1 2019.

Of the IT and business services market, IDC said the IT services market contributed 77.4 percent in H1 2020, growing 5.9 percent y-o-y as compared to 9.3 percent growth in the year-ago period. It also noted that IT services market will begin picking up momentum gradually from 2021 onwards and is projected to grow at a CAGR of 7.2 per cent between 2019-2024, to be valued at $13.4 billion by the end of 2024.

Research firm further said this reduced rate of growth in the IT services market in India is due to the COVID-19 pandemic. It noted that during H1 2020, application hosting services and infrastructure hosting services continued to be higher growth markets on account of increasing adoption of cloud applications (majorly collaboration applications and video-conferencing) and cloud infrastructure. It added that owing to increased demand for VPN licenses and requirement for higher network connectivity, network services witnessed higher adoption.

The CNX Nifty is currently trading at 12802.00, down by 56.40 points or 0.44% after trading in a range of 12790.40 and 12916.75. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.11%, Mahindra & Mahindra up by 1.46%, HCL Tech up by 1.37%, Bajaj Auto up by 0.94% and Adani Ports & SEZ was up by 0.90%. On the flip side, Eicher Motors down by 2.59%, Maruti Suzuki down by 2.02%, Indusind Bank down by 1.88%, Tech Mahindra down by 1.45% and Infosys was down by 1.42% were the top losers.

Asian markets were trading mostly in green; KOSPI rose 22.04 points or 0.85% to 2,623.58, Shanghai Composite gained 1.53 points or 0.05% to 3,363.86, Taiwan Weighted strengthened 106.83 points or 0.78% to 13,845.66, Hang Seng increased 60.84 points or 0.23% to 26,730.59, Nikkei 225 surged 240.45 points or 0.91% to 26,537.31 and Jakarta Composite was up by 41.32 points or 0.73% to 5,720.57. On the other hand Straits Times was down by 19.36 points or 0.67% to 2,850.19.


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