IGI Logo

Indian equity benchmarks continued their weak trade in afternoon session due to weak global cues as US central bank projected at least two interest rate hikes in 2023, a year earlier than forecasted in the March meeting. Sentiments were also fragile as foreign institutional investors (FIIs) stood as net sellers in the capital market as they offloaded shares worth Rs 870.29 crore on June 16, as per provisional exchange data. Some anxiety also came with RBI’s article stating that bank deposits and currency holding with the public have been adversely impacted during the second COVID wave, indicating a heavy outgo towards pandemic-induced medical expenditure. On the global front, Asian markets were trading mixed after Federal Reserve officials sped up their expected pace of policy tightening.

The BSE Sensex is currently trading at 52324.82, down by 177.16 points or 0.34% after trading in a range of 52099.72 and 52523.88. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.87%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were IT up by 0.18%, Consumer Durables up by 0.13%, TECK up by 0.06% and FMCG was up by 0.02%, while Power down by 2.08%, Metal down by 1.53%, Utilities down by 1.25%, Industrials down by 1.21% and Bankex was down by 0.90% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.67%, Asian Paints up by 1.49%, Nestle up by 0.86%, Tech Mahindra up by 0.49% and Reliance Industries was up by 0.40%. On the flip side, NTPC down by 1.38%, Maruti Suzuki down by 1.34%, Axis Bank down by 1.31%, HDFC down by 1.27% and ICICI Bank was down by 1.09% were the top losers.

Meanwhile, The Reserve Bank of India (RBI) article has said that bank deposits and currency holding with the public have been adversely impacted during the second COVID wave, indicating a heavy outgo towards pandemic-induced medical expenditure. It noted that bank deposits -- having a share of around 55 percent in total assets of households -- decelerated by 0.1 percent at end-April 2021 on a m-o-m (month-on-month) basis as against a growth of 1.1 percent in April 2020.

It also stated that currency holding with the public has also decelerated significantly to 1.7 percent during April 2021 in comparison to the growth of 3.5 percent a year ago, implying heavy outgo towards COVID-induced medical expenditure. It said the rate of decline in bank deposits vis-a-vis bank credit has also been higher, indicating that this time around the banking sector component of household savings declined. This is in sharp contrast with the spike in savings witnessed during the first wave.  Amidst high uncertainty with respect to income, the article said precautionary savings tend to rise with decline in discretionary spending, as reflected in the private final consumption expenditure data on India during the pandemic period.

According to preliminary estimates by RBI, the household financial savings in Q3:2020-21 have come down to 8.2 per cent of GDP from 21 per cent and 10.4 per cent in the previous two quarters. The savings of High Networth Individuals (HNIs) and retail individuals in liquid funds surged sharply in Q1:2020-21, mirroring the impact of uncertainty amidst COVID-induced lockdown. Households also parked their funds in gold Exchange Traded Funds (ETFs).

The CNX Nifty is currently trading at 15698.85, down by 68.70 points or 0.44% after trading in a range of 15644.70 and 15769.35. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 1.57%, Shree Cement up by 1.34%, Asian Paints up by 1.31%, Nestle up by 0.94% and HDFC Life Insurance was up by 0.70%. On the flip side, Adani Ports down by 7.92%, Tata Steel down by 3.31%, Coal India down by 1.67%, NTPC down by 1.59% and Hero MotoCorp was down by 1.51% were the top losers.

Asian markets were trading mixed; Nikkei 225 slipped 272.68 points or 0.93% to 29,018.33, Hang Seng decreased 25.51 points or 0.09% to 28,411.33, KOSPI fell 13.72 points or 0.42% to 3,264.96, Jakarta Composite was down by 7.54 points or 0.12% to 6,071.03.

On the flip side, Taiwan Weighted strengthened 82.75 points or 0.48% to 17,390.61, Straits Times advanced 3.59 points or 0.11% to 3,143.16 and Shanghai Composite was up by 6.14 points or 0.17% to 3,524.47.

Above views are of the author and not of the website kindly read disclaimer