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Key gauges snap three-day winning streak on Thursday

Indian equity benchmarks snapped their three-day winning streak and ended lower by over a percent each on Thursday, as another spike in bond yields weighed on the overall global market sentiment. The benchmarks staged a gap down opening, as India’s tally of coronavirus cases has risen to 11,156,748, with a daily increase of 15,000 in total cases. Death toll has reached 157,471, with 110 fatalities in a day. India's count of active cases has jumped to 175,044. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases. But markets recovered partially from lower levels in afternoon trading, as traders took some solace with Fitch Solutions’ statement that household spending in India is likely to grow by a real rate of 7.9 percent year-on-year in 2021, marking an improvement from the negative 14 percent contraction in 2020. Some support also came as the income tax department said it has issued over Rs 1.98 lakh crore worth refunds to over 1.95 crore taxpayers so far this fiscal. Of this, personal income tax refunds of Rs 70,572 crore have been issued to over 1.92 crore taxpayers, and corporate tax refunds of Rs 1.27 lakh crore have been issued in 2.19 lakh cases.

However, markets failed to hold recovery and settled with heavy losses due to heavy selling in metal, banking, energy and telecom stocks. Market participants took a note of Commerce and Industry Minister Piyush Goyal’s statement that the need of the hour is to reduce logistics cost in the country as India cannot be competitive if this cost remains high. He said the investments in the Sagarmala project will boost the country's maritime infrastructure, expand freight corridors, make freight more cost-effective and bring down the current logistics cost, which is estimated to be about 13-14 percent. Meanwhile, Securities and Exchange Board of India (SEBI) has asked stock exchanges, clearing corporations and depositories to put in place code of conduct and institutional mechanism to prevent fraud or market abuse by them and their designated persons.

On the global front, Asian markets ended mostly lower on Thursday, as rising yields on benchmark U.S. Treasury bonds fanned worries about inflation and the economic outlook. Investors awaited U.S. Federal Reserve Chairman Jerome Powell's speech at a Wall Street Journal conference later today, where he may address concerns about the risk of a rapid rise in long-term borrowing costs. European markets were trading lower, as survey results from IHS Markit showed German construction activity contracted sharply in February as severe bad weather caused widespread disruption to work on sites. The construction Purchasing Managers' Index fell to 41.0 from 46.6 in January. Back home, on the sectoral front, sugar industry stocks were in focus as ISMA said that India's sugar production rose by 20 per cent to 233.77 lakh tonnes in the first five months of 2020-21 marketing year ending September on higher cane production, and demanded hike in MSP of the sweetener to boost mills' liquidity position. Construction equipment sector’s stocks too were in watch as ICRA revised the outlook on the construction equipment (CE) sector to stable from negative, following strong ramp up in volumes. Heightened focus on infrastructure spend, particularly in the road infrastructure segment has led to a sharp scale up in volumes since July 2020 (20%+ Y-o-Y growth during July-Jan’21 period).

Finally, the BSE Sensex fell 598.57 points or 1.16% to 50,846.08, while the CNX Nifty was down by 164.85 points or 1.08% to 15,080.75.

The BSE Sensex touched high and low of 51,256.55 and 50,539.92, respectively. There were 5 stocks advancing against 25 stocks declining on the index on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.48%, while Small cap index was up by 0.80%.

The top gaining sectoral indices on the BSE were Power up by 0.63%, Utilities up by 0.46%, Consumer Discretionary up by 0.32%, Consumer Durables up by 0.28%, Basic Materials up by 0.27% while, Metal down by 2.31%, Bankex down by 1.45%, Energy down by 1.01%, Telecom down by 0.92%, PSU down by 0.85% were the losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 4.07%, Dr. Reddys Lab up by 1.63%, Asian Paints up by 0.65%, Maruti Suzuki up by 0.13% and Hindustan Unilever up by 0.12%. On the flip side, HDFC down by 2.62%, Bajaj Finserv down by 2.49%, Larsen & Toubro down by 2.31%, SBI down by 2.28% and Axis Bank down by 2.24% were the top losers.

Meanwhile, Union minister Piyush Goyal has stressed on improving Indian quality standards to ensure that India is recognised as a quality-conscious country with which people can do business with confidence. He said ‘we must work towards ensuring India's recognition at the global stage as a quality conscious country, as a country with which people can do business with the confidence that they will get what we say, they will receive what they require. And they can be assured that an Indian product is a high quality product.’

Talking on Easing Compliance of BIS Certifications, Goyal said that quality is profit, and it prepares businesses for greater profits and quality speaks for itself, and is not expensive. He pointed out that it adds to the productivity, helps businesses to get bigger markets so that they can get economies of scale and helps to eliminate wastage. He said ‘I think now with the onset of an Indian standard one national standard representing quality, productivity, affordability, accessibility, which should truly make the Indian standard a world-wide accepted standard. And when we go anywhere in the world, a standard that we make in India should be respected, recognised, appreciated and be the gold standard of quality.’

The minister called for more and more use of artificial intelligence, big data and other technology-related solutions to help resolve standardisation issues facing industry and other entrepreneurs. He noted that the certification process will be simplified, stating that BIS should ensure the cost of testing never becomes a detriment to conforming to quality and getting certification, the minister said, adding that there will be reduction of fee for the certification for MSMEs.

The CNX Nifty traded in a range of 15,202.35 and 14,980.20. There were 12 stocks advancing against 38 stock declining on the index.

The top gainers on Nifty were Ultratech Cement up by 3.92%, Adani Ports & SEZ up by 2.97%, Shree Cement up by 2.91%, Grasim Industries up by 2.66% and Dr. Reddys Lab up by 1.43%. On the flip side, JSW Steel down by 2.95%, HDFC down by 2.64%, Hindalco down by 2.63%, Tata steel down by 2.52% and Tata Motors down by 2.44% were the top losers.  

European markets were trading lower;  UK’s FTSE 100 decreased 75.96 points or 1.14% to 6,599.51, France’s CAC fell 25.50 points or 0.44% to 5,804.56 and Germany’s DAX was down by 93.24 points or 0.66% to 13,986.79.

Asian markets ended mostly lower on Thursday following worries about rising yields on benchmark US Treasury bonds, while investors also awaited US Federal Reserve Chairman Jerome Powell's speech at a Wall Street Journal conference later today where he may address concerns about the risk of a rapid rise in long-term borrowing costs. Chinese shares declined after China’s banking regulator also voiced concerns over high valuations in foreign markets. Further, Japanese shares settled lower amid increased uncertainty across equities and bond markets.