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Indian equities continued their weak trade in the afternoon session on account of selling in frontline blue chip counters and taking cues from weak Asian markets. Sustained capital outflows by foreign investors and selling by retail investors ahead of earnings season beginning dampened investors’ sentiments. Foreign Institutional Investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 1,303.22 crore on Monday, exchange data showed. Market sentiments were dampened as the World Bank said that the debt burden of the world's low-income countries rose 12% to a record $860 billion in 2020 as countries responded to the COVID-19 crisis with massive fiscal, monetary, and financial stimulus packages. Further, majority of the sectoral indices were trading in red, sharp selling which was witnessed in IT and TECK stocks mainly dragged the major indices down. On the global front, Asian markets were trading mostly lower as global energy crunch fuelled inflation fears, clouding investor sentiment before the U.S. corporate earnings season. On the sectoral front, fertilizer stocks were buzzing as India is likely to provide additional Rs 286 billion ($3.8 billion) to fertilizer companies as compensation for selling products at lower than market prices to farmers.

The BSE Sensex is currently trading at 59977.75, down by 158.03 points or 0.26% after trading in a range of 59885.39 and 60263.61. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.18%, Consumer Discretionary up by 0.82%, Auto up by 0.46% and FMCG was up by 0.32%, while IT down by 1.50%, TECK down by 1.40%, Telecom down by 0.74%, Oil & Gas down by 0.50% and Utilities was down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 3.97%, Bajaj Finserv up by 3.89%, Bajaj Auto up by 2.34%, Bajaj Finance up by 1.01% and Kotak Mahindra Bank was up by 0.63%. On the flip side, HCL Tech down by 4.37%, Tech Mahindra down by 2.40%, Ultratech Cement down by 1.71%, TCS down by 1.32% and Infosys was down by 1.26% were the top losers.

Meanwhile; rating agency ICRA in its latest report has revised downwards the growth forecast for the auto components industry by 300 basis points for the ongoing fiscal year (FY22) due to the impact of semiconductor shortage on domestic vehicle manufacturers as well as on exports revenues. It said the components industry is now expected to grow at 17-20 percent in 2021-22, partly aided by the low base of last year and commodity passthrough besides growth driven by domestic OEM, replacement, and export volumes. However, it said the healthy volume growth would, however, come on a low base of FY2021.

According to the report, the operating profit margin (OPM) of auto ancillaries (excluding tire manufacturers) will remain lower than normal levels (FY2020), and added that the industry's exceptionally weak performance during the first quarter of 2020-21 due to the strict lockdown, dragged last year's profit margins. Though, it said this will result in year-on-year (YoY) improvement in margins optically, with the operating margins expected to expand by 75-125 bps due to improved operating leverage, a possible third COVID wave, and further lockdowns are downside risks to Icra's estimates.

ICRA further said the underlying demand remains strong, though near-term challenges on supply-chain and commodity inflation persist. It noted that while sequential moderation is likely, most domestic OE (original equipment) segments are expected to witness healthy demand in FY2022, with a preference for personal mobility and pick-up in infra activity being the growth drivers and added that pent-up demand and increase in economic activity will support aftermarket revenues.

The CNX Nifty is currently trading at 17895.35, down by 50.60 points or 0.28% after trading in a range of 17864.95 and 17995.75. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 4.27%, Bajaj Finserv up by 3.76%, Bajaj Auto up by 1.93%, Eicher Motors up by 1.88% and Hero MotoCorp was up by 1.30%. On the flip side, HCL Tech down by 4.46%, Tech Mahindra down by 2.30%, Coal India down by 1.85%, Ultratech Cement down by 1.59% and Indian Oil Corporation was down by 1.44% were the top losers.

Asian markets were trading mostly lower; KOSPI fell 39.92 points or 1.35% to 2,916.38, Taiwan Weighted dropped 177.59 points or 1.07% to 16,462.84, Shanghai Composite declined 65.76 points or 1.83% to 3,525.95, Straits Times trembled 19.06 points or 0.61% to 3,094.43, Nikkei 225 slipped 267.59 points or 0.94% to 28,230.61 and Hang Seng was down by 420.89 points or 1.66% to 24,904.20.

On the flip side; Jakarta Composite was up by 24.27 points or 0.38% to 6,483.97.

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