IGI Logo

Indian equity benchmarks ended flat with negative bias after a highly volatile session on Tuesday. After making slightly positive start, markets soon slipped into red territory, as traders were concerned as India reported 31,222 new cases of Covid-19 and 290 deaths from the disease in 24 hours. Some cautiousness also came in as a private report projected a real gross value added (GVA) growth of 7 to 8 per cent year-on-year in the second quarter of current fiscal year versus 20.1 per cent growth in Q1 FY22. It said estimates suggest some moderation in economic activity index (EAI)-GVA growth in July, largely on account of weaker fiscal spending. Traders took note of a private report stated that industries have raised red flags over fresh notices being issued denying input tax credit (ITC), alleging wrongful claims, in turn leading to hardships for businesses.

The markets, however, surrendered all their losses to trade in the positive note in noon session, taking support from RBI’s data showing that sales of 1,647 listed private manufacturing companies recorded ‘extraordinarily high’ growth of 75 per cent in the first quarter of FY'22 mainly due to a very low base in the pandemic-hit year-ago period. Some support also came with report stated that sales growth (y-o-y) of information technology (IT) sector companies, which remained in the positive terrain throughout the pandemic, accelerated to 17.5 per cent in first three months period of 2021-22 from 6.4 per cent in the previous quarter. In absolute term, the sales were worth about Rs 1,13,807 crore. But, indices but failed to hold onto gains and ended the day with marginal losses, due to profit-booking at higher levels. Meanwhile, Capitals markets regulator SEBI (Securities and Exchange Board of India) has banned 85 entities from capital markets for up to one year for fraudulent trading practices.

On the global front, Asian markets ended mostly higher on Tuesday aided by hopes that U.S. interest rates would stay low for longer. Trading volumes were thin in the absence of fresh cues from Wall Street, which was closed overnight for a holiday. European markets were trading lower as investors assessed the global outlook against the backdrop of rising Delta coronavirus cases and signs of a slowdown in the economic recovery. Market participants also looked ahead to Thursday's meeting of the European Central Bank, which may act to slow down its massive bond-buying program in light of recent stronger-than-expected inflation data. Back home, on the sectoral front, aviation industry’s stocks were in focus as credit ratings agency ICRA said domestic air passenger traffic continued on the growth trajectory in August with volumes growing up to 31 per cent to 66 lakh over the previous month, helped by higher capacity deployment and a downward trend in the pandemic. Telecom stocks too were in watch as industry body COAI said telecom regulator Trai's recommendation to waive right of way charges for the next five years will significantly reduce the overall cost of network rollout for companies.  

Finally, the BSE Sensex fell 17.43 points or 0.03% to 58,279.48, while the CNX Nifty was down by 15.70 points or 0.09% to 17,362.10. 

The BSE Sensex touched high and low of 58,553.07 and 58,005.07, respectively and there were 12 stocks advancing against 18 stocks declineng on the index.    

The broader indices ended in red; the BSE Mid cap index fell 0.23%, while Small cap index was down by 0.42%.

The top gaining sectoral indices on the BSE were Telecom up by 3.08%, Consumer Durables up by 1.26%, FMCG up by 0.31%, Energy up by 0.24%, Consumer discretionary up by 0.12% while, Realty down by 2.24%, IT down by 1.24%, Utilities down by 1.10%, Oil & Gas down by 1.05%, Power down by 0.89% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.56%, Bharti Airtel up by 2.48%, Indusind Bank up by 1.20%, ITC up by 1.15% and Ultratech Cement up by 0.84%. On the flip side, Sun Pharma down by 1.81%, Tech Mahindra down by 1.69%, Axis Bank down by 1.62%, HCL Technologies down by 1.44% and Infosys down by 1.36% were the top losers.  

Meanwhile, with the support of state governments, Agriculture Minister Narendra Singh Tomar has said the Centre will increase the farmer database from the current 5.5 crore, created by the Ministry of Agriculture and Farmers Welfare, to 8 crore by December 2021. Tomar asked state governments to create a database for the state using the federated farmer database prepared by the central government and allow linkage to the state land record database.

Noting that agriculture has to be linked with digital technology, scientific research and knowledge, the minister emphasised that both the Centre and states must work together for agriculture to give a boost to the economy. He also said with the establishment of Agriculture Infrastructure Fund, Farmer Producer Organisations (FPOs), Mandis and start-ups will get loans easily.

According to him, a national farmer database is being created by taking data from existing schemes like PM-KISAN, soil health card and Pradhan Mantri Fasal Bima Yojana. The database will have connectivity to the state land records database. Meanwhile, stating that there is an increase in farm exports, Union Food and Commerce Minister Piyush Goyal said ‘India is emerging as a trusted export partner and there is further scope for improvement of agri-exports’. He emphasised that the infrastructure needs to be strengthened for storage and warehousing.

The CNX Nifty traded in a range of 17,436.50 and 17,287.00 and there were 19 stocks advancing against 31 stocks declining on the index.   

The top gainers on Nifty were Bharti Airtel up by 2.62%, HDFC up by 2.46%, Grasim Industries up by 1.57%, ITC up by 1.22% and Indusind Bank up by 1.00%. On the flip side, Sun Pharma down by 2.16%, BPCL down by 1.84%, Hindalco Industries down by 1.76%, Axis Bank down by 1.65% and Wipro down by 1.63% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 28.69 points or 0.4% to 7,158.49, France’s CAC decreased 1.70 points or 0.03% to 6,741.80 and Germany’s DAX decreased 40.06 points or 0.25% to 15,892.06.

Asian markets ended mostly higher on Tuesday, despite lack of directional cues from Wall Street which was closed overnight for a Labor Day holiday. Market sentiments improved by expectations that US interest rates would stay low for longer combined with talk of more stimulus in Japan and China. Chinese and Hong Kong shares gained after data showed China’s exports unexpectedly grew at a faster pace in August. Exports from China rose in August at a faster-than-expected rate of 25.6% from a year earlier from a 19.3% gain in July, while imports increased 33.1% annually after rising 28.1 percent in July. As a result, the trade balance showed a surplus of $58.34 billion, which was above the expected level of $51.05 billion and the previous month’s $56.59 billion reading. Moreover, Japanese shares closed higher on expectation that the ruling Liberal Democratic Party will compile additional economic stimulus to tackle the coronavirus crisis and its impact on the economy.

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