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After hitting record levels, Indian equity benchmarks erased all the day’s gains and closed marginally lower on Tuesday tracking losses in index majors Tech Mahindra, TCS, Maruti Suzuki and Reliance Industries amid a largely weak trend in global markets. After making cautious start, key indices traded flat with a positive bias, as traders found some solace with data from the Reserve Bank of India showed the government's Emergency Credit Line Guarantee Scheme (ECLGS) significantly boosted credit growth for the micro, small and medium enterprises (MSMEs) in the financial year ending March 2021 even as concerns about asset quality of this segment grew. Markets added gains in late morning session taking support from private report that business resumption activity continued to increase for the sixth straight week after the second wave-induced lockdowns started getting lifted. It noted that the Nomura India Business Resumption Index (NIBRI) rose up to 91.3 for the week ended June 4, from 86.3 the previous week, and is only 8.7 percentage points (pp) below pre-pandemic levels and 3.6 pp below pre-second wave level.

However, Indian shares reversed course to tick marginally lower, as traders turned wary with SBI Research in its latest report stated that household debt has sharply jumped to 37.3 per cent of the Gross domestic product (GDP) in the pandemic year (FY21) from 32.5 per cent in FY20, confirming the deeper financial impact of COVID-19. It also warned that the ratio may rise further this fiscal due to the second wave of the pandemic. However, losses were limited as some optimism remained among traders with the Reserve Bank of India’s (RBI) statement that the first purchase of government securities for an aggregate amount of Rs 20,000 crore under the G-sec Acquisition Programme (G-SAP 2.0) will be conducted on July 8, 2021. The RBI will purchase five government securities of different maturities through a multi-security auction using the multiple price method. Meanwhile, the government has decided not to impose anti-dumping on imports of certain copper products, used in the electrical industry, from China, Thailand, Korea and three other countries. In April, the commerce ministry’s arm Directorate General of Trade Remedies (DGTR) recommended imposing the duty on ‘copper and copper alloy flat-rolled products’ from China, Korea, Malaysia, Nepal, Sri Lanka and Thailand, after conducting a probe.

On the global front, Asian markets ended mixed on Tuesday as worries grew about China's crackdown on local tech companies and investors awaited minutes from the U.S. Federal Reserve's latest policy meeting for more clues on tapering. European markets were trading lower even as Eurostat said Euro zone monthly retail sales rose more than expected in May after a drop in April. The volume of retail sales rose 4.6 percent compared with April. Back home, on the sectoral front, stocks related to telecom sector were in focus as Telecom department's apex body the Digital Communications Commission (DCC) has cleared a provision of using satellite connectivity in telecom networks to provide services in remote areas where it is difficult to lay optical fibre network. Airline stocks closed higher after the country's aviation ministry allowed an increase in capacity on domestic flights to 65% until July-end, from 50% earlier.

Finally, the BSE Sensex fell 18.82 points or 0.04% to 52,861.18, while the CNX Nifty was down by 16.10 points or 0.10% to 15,818.25.       

The BSE Sensex touched high and low of 53,129.37 and 52,804.18, respectively and there were 11 stocks advancing against 19 stocks declining on the index.    

 The broader indices ended mixed; the BSE Mid cap index rose 0.19%, while Small cap index was down by 0.26%.

The top gaining sectoral indices on the BSE were Bankex up by 0.96%, Power up by 0.51%, Basic Materials up by 0.38%, Capital Goods up by 0.23% and Oil & Gas up by 0.02%, while Auto down by 1.85%, IT down by 1.22%, TECK down by 1.03%, Energy down by 0.74% and Industrials down by 0.68% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 3.22%, HDFC Bank up by 2.63%, Bajaj Finance up by 2.17%, Bajaj Finserv up by 1.42% and Kotak Mahindra Bank up by 1.34%. On the flip side, Tech Mahindra down by 2.30%, TCS down by 1.78%, Maruti Suzuki down by 1.13%, Reliance Industries down by 1.11% and Sun Pharma down by 1.06% were the top losers.

Meanwhile, Reserve Bank of India (RBI) has said that the first purchase of government securities for an aggregate amount of Rs 20,000 crore under the G-sec Acquisition Programme (G-SAP 2.0) will be conducted on July 8, 2021. The RBI will purchase five government securities of different maturities through a multi-security auction using the multiple price method.

The RBI said it reserves the right to decide on the quantum of purchase of individual securities, and purchase marginally higher/lower than the aggregate amount due to rounding-off. The result of the auctions will be announced on the same day. The next purchase under G-SAP 2.0 will be conducted on July 22 for Rs 20,000 crore.

The RBI had conducted open market purchase of government securities of Rs 1 lakh crore under the G-SAP 1.0 in first quarter of the financial year 2021-22. On June 4, RBI Governor Shaktikanta Das had announced that the central bank will conduct open market purchase of government securities of Rs 1.2 lakh crore under the G-SAP 2.0 in the second quarter of 2021-22 to support the market.

The CNX Nifty traded in a range of 15,914.20 and 15,801.00 and there were 19 stocks advancing against 31 stocks declining on the index. 

The top gainers on Nifty were Ultratech Cement up by 3.23%, Shree Cement up by 3.01%, HDFC Bank up by 2.44%, Bajaj Finance up by 2.16% and SBI Life Insurance up by 1.50%. On the flip side, Tata Motors down by 8.52%, Tech Mahindra down by 2.29%, Coal India down by 1.50%, TCS down by 1.43% and Mahindra & Mahindra down by 1.25% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 8.16 points or 0.11% to 7,156.75, France’s CAC decreased 18.17 points or 0.28% to 6,549.37 and Germany’s DAX decreased 55.19 points or 0.35% to 15,606.78.

Asian markets ended mixed on Tuesday as investors await minutes from the US Federal Reserve's latest policy meeting for more clues on tapering. Chinese shares ended down as China is widening its crackdown on the country's tech platforms through tighter regulations on data security and targeting more US listed companies. Hong Kong shares declined as healthcare firms slumped on worries over lofty valuations, while a survey showed the private sector in Hong Kong expanded at a slower pace in June. Meanwhile, Japanese shares ended slightly higher, despite worries over potential spike in coronavirus infections during the Olympics.

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