IGI Logo

Markets snap six-session winning run

Snapping their six-session winning streak, Indian equity benchmarks ended on a flat note with negative bias on Tuesday amid profit-booking in Auto, Realty and FMCG stocks. Key indices made positive start, as traders took encouragement with report that Finance Minister Nirmala Sitharaman said the government is taking steps to carefully monitor the fiscal deficit, which is estimated at 9.5 percent of the GDP for the current financial year. Some support also came in with a report that US President Joe Biden and Prime Minister Narendra Modi have agreed to work together on the fight against the COVID-19 pandemic, renew partnership on climate change, rebuild the global economy in a way that benefits the people of both countries and stand together against the scourge of global terrorism.

Key indices added gains in afternoon session, taking support from the European Union stating that its first high-level dialogue on trade with India saw interest by both sides in resuming negotiations for an ambitious, comprehensive and mutually beneficial trade and investment pact once their respective approaches and positions are ‘close enough’. Local investors cheered after private report stated that India will make up the biggest share of energy demand growth at 25 percent over the next two decades, as it overtakes the European Union as the world's third-biggest energy consumer by 2030. 

However, barometer gauges succumbed to the fag-end selloff and closed marginally lower, as some concern came with reports that securitisation volumes halved to Rs 24,400 crore during the December quarter compared to the year-ago period, but showed a healthy 61 per cent rise over the preceding September quarter. Domestic ratings agency Icra said it maintains that overall volumes of securitization, where a lender sells down its loan portfolio or future receivables to investors at a discount for upfront payment, will come at up to Rs 90,000 crore in FY2020-21, as against nearly Rs 1.90 lakh crore in FY2019-20.

On the global front, Asian markets ended mostly higher on Tuesday as U.S. lawmakers edged closer to a new stimulus for the world's top economy and a senior Federal Reserve official shrugged off concerns that further fiscal stimulus might generate an unhealthy jump in inflation this year. European markets were trading lower after data showed U.K. retail sales declined for the first time since last spring. Data from the British Retail Consortium showed total sales decreased 1.3 percent on a yearly basis in January as the current lockdown has hit non-essential retailers harder than in November. Back home, on the sectoral front, pharma stocks were in focus with Chemical and Fertiliser Minister D V Sadananda Gowda stating that the Indian pharmaceutical industry has proved to be a dependable supplier of quality drugs in a time of global need on account of the COVID-19 pandemic, and is expected to reach a size of $130 billion by 2030. Besides, telecom industry stocks too were buzzing with report that the government expects that the roll-out of 5G services will begin in early-2022 after another round of spectrum auction that is planned to be held after six month.

Finally, the BSE Sensex fell 19.69 points or 0.04% to 51,329.08, while the CNX Nifty was down by 6.50 points or 0.04% to 15,109.30.

The BSE Sensex touched high and low of 51,835.86 and 51,193.93, respectively and there were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.18%, while Small cap index was down by 0.26%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.43%, Telecom up by 0.99%, Capital Goods up by 0.55%, Bankex up by 0.16% and Basic Materials up by 0.11%, while Auto down by 1.43%, PSU down by 0.77%, Realty down by 0.72%, FMCG down by 0.66% and Metal down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 3.70%, ONGC up by 1.30%, Titan Company up by 1.23%, Larsen & Toubro up by 0.91% and Axis Bank up by 0.86%. On the flip side, Mahindra & Mahindra down by 3.62%, Bajaj Finance down by 1.83%, ITC down by 1.76%, Sun Pharma Industries down by 1.73% and Bajaj Auto down by 1.69% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that the government is taking steps to carefully monitor the fiscal deficit, which is estimated at 9.5 percent of the Gross domestic product (GDP) for the current financial year. She said the 'mool mantra' now is that fiscal deficit is something that one cannot escape, but at the same time, it needs to be carefully tackled.

Emphasising that the government has made the Union Budget transparent, Sitharaman said there was nothing under wraps or swept under the carpet. She also said whatever the government is borrowing or spending is open for everyone to see and the government has spent big on those areas that provide a big multiplier effect.

India has exceeded its fiscal deficit target of 3.5 percent in the current fiscal by a wide margin, due to higher spending to stimulate the economy amid the COVID-19 pandemic. The fiscal deficit -- the excess of government expenditure over its revenues -- has been pegged at 9.5 percent of the GDP in the current fiscal ending March 31, as per the revised estimate. For the next fiscal, the deficit has been pegged at 6.8 percent of GDP, which will be further lowered to 4.5 percent by fiscal 2025-26.

The CNX Nifty traded in a range of 15,257.10 and 15,064.30 and there were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 3.95%, Asian Paints up by 3.77%, HDFC Life Insurance up by 3.64%, ONGC up by 1.51% and Indian Oil Corporation up by 1.45%. On the flip side, Mahindra & Mahindra down by 3.04%, Tata Motors down by 2.98%, JSW Steel down by 2.20% and Bajaj Auto down by 1.87% and ITC down by 1.87% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 2.23 points or 0.03% to 6,521.30, France’s CAC fell 0.62 points or 0.01% to 5,685.41 and Germany’s DAX was down by 72.78 points or 0.52% to 13,987.13.

Asian markets ended mostly higher on Tuesday, driven by optimism over progress in the US stimulus talks. Tom Barkin, the president of the Richmond Fed, has shrugged off concerns that further fiscal stimulus might generate an unhealthy jump in inflation this year and saying the US economic recovery still needs support. Japanese shares closed higher, with sentiment underpinned by expectations of a quick economic recovery following strong domestic corporate earnings and progress on vaccine rollouts. Further, Chinese shares ended up following Beijing's latest reform measures for the stock market.

For More  LKP Securities Ltd Disclaimer  http://www.lkpsec.com/

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer