IGI Logo

Indian equity benchmarks ended with minor losses marked by volatility on Tuesday. Losses in metal, consumer durables and banking stocks pulled the headline gauges lower. After a positive opening, the domestic markets traded lower, as traders got anxious with Rating agency Crisil’s latest report stated that higher diesel prices will shave off the overall profitability of transporters despite an improvement in freight rates since last month following the withdrawal of the monsoons, consumption recovery and higher infrastructure activity. Some concern also came with report that India, speaking on behalf of the BASIC group, warned that lack of a serious approach to climate finance will jeopardise the enhanced mitigation and adaptation ambition as well as net zero pledges of parties. Traders were also worried on continuous outflow of foreign capital. Foreign Institutional Investors (FIIs) again stood as sellers as they offloaded shares worth Rs 860.65 crore in the capital market on Monday, exchange data showed.

The markets however, recovered most of their losses by the end of the day as traders found some solace with domestic rating agency Brickwork Ratings revised its growth estimate for the country's gross domestic product (GDP) to 10-10.5 per cent in the current financial year from an earlier expectation of a 9 per cent growth. It said many economic growth indicators are suggesting a faster-than-expected revival in economic activities. Some support also came with SBI report stating that India is now ahead of China in financial inclusion metrics, with mobile and internet banking transactions rising to 13,615 per 1,000 adults in 2020 from 183 in 2015 and the number of bank branches inching up to 14.7 per 1 lakh adults in 2020 from 13.6 in 2015, which is higher than Germany, China and South Africa. Meanwhile, Markets regulator SEBI allowed foreign portfolio investors (FPIs) to write off all debt securities that they are unable to sell. This will be applicable only to such FPIs who wish to surrender their registration.

On the global front, Asian markets ended mostly higher on Tuesday, while European markets were trading higher, following the positive cues from Wall Street, as traders reacted positively to news that the House of Representatives has passed a $1 trillion infrastructure bill over the weekend and support from crude oil prices. However, traders seem reluctant to make significant moves amid some uncertainty about the near-term outlook for the markets. Back home, on the sectoral front, power stocks were in action as the Union power ministry said that peak power demand deficit in the country was almost wiped out in 2020-21 period. Providing statistics, the ministry said the deficit stood at 0.4 per cent in 2020-21 compared to 16.6 per cent in 2007-08 and 10.6 per cent in 2011-12. Stocks related to pharmaceutical sector too were in focus as the Competition Commission of India (CCI) chief Ashok Kumar Gupta said that the CCI will identify measures to enhance competition in the country's pharmaceutical sector for ensuring affordability of drugs after analysing findings of its market study, which is likely to be concluded within a month.

Finally, the BSE Sensex fell 112.16 points or 0.19% to 60,433.45 and the CNX Nifty was down by 24.30 points or 0.13% to 18,044.25.           

The BSE Sensex touched high and low of 60,670.47 and 60,213.64, respectively and there were 14 stocks advancing against 16 stocks declining on the index.  

The broader indices ended in green; the BSE Mid cap index rose 0.82%, while Small cap index was up by 0.67%.

The top gaining sectoral indices on the BSE were Industrials up by 1.39%, Capital Goods up by 1.07%, Auto up by 1.04%, Oil & Gas up by 0.92% and Energy up by 0.76%, while Metal down by 0.91%, Consumer Durables down by 0.45%, Bankex down by 0.28% and FMCG down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.21%, SBI up by 1.17%, Reliance Industries up by 1.02%, ICICI Bank up by 0.99% and Larsen & Toubro up by 0.88%. On the flip side, HDFC Bank down by 1.66%, HDFC down by 1.44%, Maruti Suzuki down by 1.42%, NTPC down by 1.28% and Bajaj Finance down by 1.25% were the top losers.

Meanwhile, domestic rating agency Brickwork Ratings in its latest report has revised its growth estimate for India’s gross domestic product (GDP) to 10-10.5 per cent in the current financial year (FY22) from an earlier expectation of a 9 per cent growth. It said many economic growth indicators are suggesting a faster-than-expected revival in economic activities.

It expects the GDP growth for Q2 FY22 to be at 8.3 per cent (year-on-year), on the back of a 7.4 per cent contraction in Q2FY21. The country’s GDP grew at 20.1 per cent in the first quarter of fiscal 2022. The agency believes that the subsequent quarters too will see recovery if there is no resurgence of the virus in the form of a third wave.

It added ‘Amid the waning possibility of a third wave, we expect the economy to register better growth in the remaining part of the year’. The downside risks of a possible third wave to growth too are limited due to the progress achieved in vaccination. However, the agency said downside risks emanating from rising crude oil prices, mineral products, increasing costs of raw materials and freight rates, disruptions in semiconductor supply and coal supply shortages are likely to downplay the growth momentum.

The CNX Nifty traded in a range of 18,112.60 and 17,983.05 and there were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.24%, Tata Motors up by 1.91%, Hero MotoCorp up by 1.27%, SBI up by 1.10% and ONGC up by 1.07%. On the flip side, Britannia Industries down by 2.60%, HDFC Bank down by 1.70%, HDFC down by 1.39%, NTPC down by 1.39% and Bajaj Finance down by 1.35% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 5.99 points or 0.08% to 7,306.39, France’s CAC rose 7.51 points or 0.11% to 7,054.99 and Germany’s DAX was up by 37.01 points or 0.23% to 16,083.53.

Asian markets ended mostly higher on Tuesday tracking Wall Street gains overnight following passage of a $1 trillion infrastructure bill in the United States, but investors globally are stayed cautious ahead of the inflation data from the United States. Chinese shares gained despite concerns around Evergrande's debt crisis. The US Central bank Fed also warned that stresses in the Chinese real-estate sector from Evergrande's debt crisis could spill over to the United States. Reports suggested that Evergrande has raised around $145m (£107m) just before a deadline for a fresh debt interest payment. Seoul shares settled slightly higher amid institutional buying. However, Japanese shares declined with stronger yen, while some disappointing earnings updates also denting market sentiments.

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