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Key indices continue to trade lower

Indian equity benchmarks continued their lackluster trade in afternoon session, amid negative signals from other Asian markets. Stocks from Energy, Oil & Gas and PSU counters were supporting the markets, while those from Auto, Healthcare and Bankex counters were adding to the underlying cautious undertone. Traders were worried with reports that while the National Pension System (NPS) has a robust architecture, there are demand supply loopholes in the system and it also lacks flexibility, an essential component for the sector, as per findings of a discussion session held by NCAER. Adding pessimism, a report states that PE/VC investments in January 2021 reported a 35 per cent drop to $1.6 billion from $2.5 billion, a year ago. The number of deals reported also remained flat at 80.

On the global front, Asian markets were trading mostly lower amid disappointing US jobs and economic data. Back home, in scrip specific developments, Dabur India declined after nearly 10 million equity shares of the personal products company changed hands via block deals, while DLF surged as its JV completes acquisition of entire 52% stake in Fairleaf Real Estate.

The BSE Sensex is currently trading at 51210.12, down by 114.57 points or 0.22% after trading in a range of 51039.97 and 51432.99. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.28%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Energy up by 1.51%, Oil & Gas up by 1.02%, PSU up by 0.31%, Realty up by 0.25% and Industrials was up by 0.18%, while Auto down by 1.16%, Healthcare down by 0.94%, Bankex down by 0.75%, Consumer Discretionary down by 0.52% and Utilities was down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.57%, Indusind Bank up by 1.52%, NTPC up by 1.40%, Hindustan Unilever up by 1.27% and Mahindra & Mahindra was up by 0.46%. On the flip side, Power Grid down by 2.30%, ICICI Bank down by 2.24%, Bajaj Auto down by 2.23%, Asian Paints down by 1.93% and SBI was down by 1.45% were the top losers.

Meanwhile, Ratings agency Crisil in its latest report has said that packaging film companies are expected to see an improved profitability at a decade high of 19 percent in the current fiscal year (FY21) on the back of robust demand, growing in-home consumption, and benign input costs, among others. An analysis of Crisil-rated flexible packaging film companies, which account for over 60 per cent of the industry's revenue and debt, indicates brightening of their credit outlook over the near-to medium-term amid stable debt levels.

According to the report, with demand estimated to have been growing at around 12 percent this fiscal, and prices of inputs - mainly crude derivatives - down round 20 percent, prospects of packaging film makers have started to improve. It expects EBITDA (earnings before interest, taxes, depreciation, and amortization) margin to expand 400 basis points (bps) on-year to 19 percent this fiscal. Larger companies that are also into speciality and value-added products will benefit the most.

The report further said broadly, flexible packaging companies manufacture bi-axially oriented polypropylene (BOPP) and bi-axially oriented polyethylene (BOPET) films. It also said BOPET films have more oxygen retention power, high tensile strength, longer shelf life, and better print quality than BOPP films, resulting in diverse end-use applications.

The CNX Nifty is currently trading at 15081.20, down by 37.75 points or 0.25% after trading in a range of 15028.70 and 15144.05. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were UPL up by 4.20%, GAIL India up by 3.14%, BPCL up by 2.16%, Reliance Industries up by 1.49% and NTPC was up by 1.40%. On the flip side, Bajaj Auto down by 2.39%, ICICI Bank down by 2.27%, Tata Steel down by 2.23%, Power Grid down by 2.22% and Hero MotoCorp was down by 2.21% were the top losers.

Asian markets were trading mostly lower; Taiwan Weighted dropped 83.13 points or 0.51% to 16,341.38, Jakarta Composite lost 6.88 points or 0.11% to 6,193.43, Straits Times trembled 26.05 points or 0.90% to 2,882.80, Nikkei 225 slipped 218.17 points or 0.72% to 30,017.92 and Hang Seng was down by 53.55 points or 0.18% to 30,541.72.

On the flip side, KOSPI rose 20.96 points or 0.68% to 3,107.62 and Shanghai Composite was up by 19.69 points or 0.54% to 3,695.05.