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Indices close flat with negative bias on Wednesday

Indian equity benchmarks recouped most intra-day losses in the dying hours but closed flat with a negative bias on Wednesday amid losses in Telecom and Banking stocks. For most part of the day benchmarks traded with a negative bias, amid report that India recorded 10,510 fresh Covid-19 cases of the coronavirus disease (Covid-19). The country reported a net reduction of 4,984 in active coronavirus cases to bring its count down at 143,416, which is 85.89 per cent lower than the September 18 peak of 1,017,754. India’s share of global active coronavirus cases has declined to 0.56 per cent (one in 179). The caseload tally stands at 10,858,300. The country continues to be second-most-affected globally, and ranks 17th among worst-hit nations by active cases.

However, last-minute buying helped benchmark indices cut losses. Traders also took some support with the finance ministry's monthly report said growth and inflation outlook for 2021-22 portends more than full recovery, and that the country has become the COVID-19 vaccine hub of the world. Some optimism also came with Agriculture Minister Narendra Singh Tomar stating that the government has been pursuing the target of doubling farmers' income by 2022 and several interventions taken are showing a positive impact. He also said the government has adopted several developmental programmes, schemes, reforms and policies that focus on higher incomes for the farmers. Traders also took a note of Minister of State for Finance Anurag Singh Thakur’s statement that gross non-performing assets (NPAs) of public sector banks (PSBs) declined from Rs 8.96 lakh crore in March 2018 to Rs 6.09 lakh crore in September 2020 due to various measures taken by the government.

On the global front, Asian markets ended mostly higher on Wednesday, amid signs of falling coronavirus infections, optimism over central U.S. central bank support and growing expectations the U.S. stimulus package will be approved in Congress. Separate reports showed China's consumer price inflation unexpectedly fell an annual 0.3 percent in January, while the country's factory gate prices rose for the first time in 12 months and at the fastest rate since May 2019. European markets were trading mostly lower as investors reacted to a mixed bag of earnings and watched for developments on U.S. coronavirus stimulus.

Finally, the BSE Sensex fell 19.69 points or 0.04% to 51,309.39, while the CNX Nifty was down by 2.80 points or 0.02% to 15,106.50. 

The BSE Sensex touched high and low of 51,512.86 and 50,846.22, respectively and there were 13 stocks advancing against 17 stocks declining on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.71%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Realty up by 1.72%, Consumer Durables up by 1.27%, Consumer Discretionary up by 0.99%, Auto up by 0.95% and Energy up by 0.57%, while Telecom down by 1.46%, Bankex down by 0.65%, Capital Goods down by 0.49%, Power down by 0.14% and FMCG down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.96%, Mahindra & Mahindra up by 2.21%, Bajaj Finance up by 1.47%, TCS up by 1.11% and Reliance Industries up by 0.99%. On the flip side, HDFC Bank down by 1.77%, Bharti Airtel down by 1.45%, Axis Bank down by 1.06%, ONGC down by 1.04% and Nestle down by 0.91% were the top losers.

Meanwhile, the finance ministry's monthly report has said growth and inflation outlook for 2021-22 (FY22) portends more than full recovery, and that the country has become the COVID-19 vaccine hub of the world. The report said the structural reforms and the policy push under the Aatmanirbhar Bharat Mission along with the slew of measures announced in the Union Budget 2021-22 towards achieving broad-based inclusive growth will strengthen the fundamentals of the economy and bring it back on to a strong and sustainable growth path in the year ahead.

Indian economy is estimated to contract 7.7 per cent in the current financial year, mainly due to the coronavirus pandemic. The latest Economic Survey projected growth rate to rebound to 11 per cent during 2012-22 while the Budget estimated real GDP to be between 10-10.5 per cent. The report said the Survey pitched for growth through counter cyclical fiscal policy emphasising that growth alone is the answer to sustaining the public debt burden of the country. Further, the report said the Budget implemented the counter cyclical fiscal policy by raising the target of fiscal deficit to 6.8 per cent of GDP, more than double the FRBM (Fiscal Responsibility and Budget Management) target.

The report noted that various measures taken by the government since March 2020 against the pandemic ensured minimum loss of life. It mentioned early lockdown, health-infra ramp up, gradual unlocking, blanket testing, social distancing, calibrated fiscal stimulus to minimise supply side disruptions and revive demand and structural reforms pursued diligently by government since March, 2020 have now come to fruition to limit the fatality rate to globally one of the lowest at 1.2 per cent. According to the report, with each day ending with positive COVID-19 cases falling to new lows and economic activity levels attaining new peaks, India has worked its way around the pandemic through the will of the brave people and astute policy interventions by the government.

The CNX Nifty traded in a range of 15,168.25 and 14,977.20 and there were 27 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.82%, Bajaj Finserv up by 2.75%, SBI Life Insurance up by 2.71%, HDFC Life Insurance up by 2.13% and Mahindra & Mahindra up by 2.04%. On the flip side, Eicher Motors down by 2.20%, Bharti Airtel down by 1.64%, HDFC Bank down by 1.24%, Tata Steel down by 1.13% and Britannia Industries down by 1.05% were the top losers.

European markets were trading mostly lower; France’s CAC fell 1.34 points or 0.02% to 5,690.20 and Germany’s DAX was down by 9.30 points or 0.07% to 14,002.50, while UK’s FTSE 100 increased 15.83 points or 0.24% to 6,547.39.

Asian markets ended mostly higher on Wednesday, despite overnight lackluster close on Wall Street. Global investors kept an eye on stimulus negotiations and impeachment proceedings. Optimism over more US fiscal stimulus and declining Covid-19 infections rates too supported market sentiments. Meanwhile, cautious investors are stayed away from making big bets ahead of the Lunar New Year holidays in China, which begins on Thursday. The latest Chinese inflation and bank lending data underscored a recovery in the world's second-largest economy. Japanese shares closed higher amid robust corporate earnings.

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