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Benchmarks settle in red for fourth straight day

Indian equity benchmarks settled in red for the fourth straight day on Friday, dragged by losses in index heavyweights like Bajaj Finserv, Maruti Suzuki and Bharti Airtel amid weakness across global markets. After opening in the red, benchmark indices slipped further lower, as traders were concerned with former RBI Governor D Subbarao stressed on the need to accelerate India’s economic growth rate and make sure that this benefit of growth is shared, even as he said that unemployment has taken a form of crisis in the country. Subbarao further said the organised sector is shedding jobs and the labour force is moving from high productive sector to the unorganised sector. Traders also took a note of the RBI report stating that India's external debt stood at $571.3 billion at end-June, recording an increase of $1.6 billion over its level at the end of March 2021. However, the external debt to GDP ratio declined to 20.2 percent at June-end 2021 from 21.1 percent as of March 31. Valuation gain due to the appreciation of the US dollar vis-a-vis the Indian rupee was at $1.7 billion.

Markets continued to trade on a negative note in late afternoon deals even as private survey stating that India’s manufacturing activity recovered slightly in September, from a slowdown in growth in the previous month of August as strengthening demand conditions amid the easing of COVID-19 restrictions boosted sales. According to the monthly IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) survey, manufacturing PMI stood at 53.7 in September, up from 52.3 in August. Market participants also paid no heed towards veteran banker KV Kamath’s statement that the country's economy is set for a stronger performance going forward, driven by growth in large corporates, agriculture and most importantly digital startup sector. Meanwhile, the Controller General of Accounts (CGA) in its latest data has said that the government's fiscal deficit stood at Rs 4.68 lakh crore or 31.1 per cent of the Budget estimates at the end of August 2021. The deficit figure in the current fiscal appears much better than the previous financial year when it had soared to 109.3 per cent of the estimates, mainly on account of a jump in expenditure to deal with the COVID-19 pandemic.

On the global front, Asian markets settled lower on Friday amid concerns the Federal Reserve might hurry to taper its stimulus to reign in the pace of inflation. Sentiment was also dented by concerns around energy price increases impacting production in China and fears that disruptions to global supply chains will continue into next year. European markets were trading lower, amid fears of a slowing economic recovery. IHS Markit noted Eurozone manufacturing growth weakened in September as producers report a growing toll from supply chain headwinds. The corresponding PMI dropped to 58.6 in September from 61.4 in August, posting the largest drop since April 2020.

Finally, the BSE Sensex fell 360.78 points or 0.61% to 58,765.58 and the CNX Nifty was down by 86.10 points or 0.49% to 17,532.05.      

The BSE Sensex touched high and low of 58,890.08 and 58,551.14, respectively and there were 11 stocks advancing against 19 stocks declining on the index.      

The broader indices ended mixed; the BSE Mid cap index was down by 0.11%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.85%, Metal up by 0.62%, Healthcare up by 0.60%, Basic Materials up by 0.52%, Oil & Gas up by 0.37% while, Realty down by 1.56%, Telecom down by 1.31%, TECK down by 0.77%, IT down by 0.63%, Bankex down by 0.52% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.05%, Dr. Reddy's Lab up by 1.38%, Ultratech Cement up by 1.24%, Sun Pharma up by 1.00% and Power Grid Corporation up by 1.00%. On the flip side, Bajaj Finserv down by 3.45%, Maruti Suzuki down by 2.39%, Bharti Airtel down by 2.22%, Asian Paints down by 2.02% and Bajaj Finance down by 1.94% were the top losers.

Meanwhile, Controller General of Accounts (CGA) in its latest data has said that the government's fiscal deficit stood at Rs 4.68 lakh crore or 31.1 per cent of the Budget estimates at the end of August 2021. The deficit figure in the current fiscal appears much better than the previous financial year when it had soared to 109.3 per cent of the estimates, mainly on account of a jump in expenditure to deal with the COVID-19 pandemic.

According to the data, in absolute terms, the fiscal deficit or gap between expenditure and revenue was Rs 4,68,009 crore at end of August. For the current financial year, the government expects the deficit at 6.8 per cent of GDP or Rs 15,06,812 crore. It also stated that the central government's total receipts stood at Rs 8.08 lakh crore or 40.9 per cent of the corresponding Budget Estimate (BE) 2021-22 up to August, 2021.

It further indicated that the total receipts were 16.8 per cent of the BE of 2020-21 during the corresponding period of the last financial year. Of the total receipts, the tax revenue was Rs 6.44 lakh crore or 41.7 per cent of BE. The tax revenue was only 17.4 per cent of BE of 2020-21 in the year-ago period. Centre's total expenditure was Rs 12.76 lakh crore or 36.7 per cent of BE up to August 2021. The fiscal deficit for 2020-21 was 9.3 per cent of the Gross Domestic Product (GDP), better than 9.5 per cent projected in the revised estimates in the Budget in February.

The CNX Nifty traded in a range of 17,557.15 and 17,452.90 and there were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.98%, Coal India up by 2.00%, Indian Oil Corporation up by 1.40%, UltraTech Cement up by 1.34% and Dr. Reddy's Lab up by 1.23%. On the flip side, Bajaj Finserv down by 3.21%, Maruti Suzuki down by 2.54%, Asian Paints down by 1.96%, Bajaj Finance down by 1.87% and Bharti Airtel down by 1.82% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 74.76 points or 1.05% to 7,011.66, France’s CAC fell 46.63 points or 0.72% to 6,473.38 and Germany’s DAX was down by 113.44 points or 0.74% to 15,147.25.

Asian markets settled lower on Friday tracking overnight fall in Wall Street amid concerns that the US central bank might hurry to taper its stimulus, while concerns over inflation following surging energy prices also impacted market sentiments. Even if a government shutdown was avoided, the United States still faces a potential default due to an impasse over raising the debt ceiling. Japanese shares tumbled to one-month low on fears over various supply constraints worldwide, which could keep inflation elevated for longer than expected. Seoul shares declined on concerns about power shortages in China that could hurt global economic growth. Meanwhile, Chinese and Hong Kong markets were closed for holidays.

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