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Domestic markets trade flat with positive bias
Oct-21-2021

Indian equity benchmarks made gap-up opening with gains of around half a percent each on Thursday amid mixed global cues. But, soon markets move towards neutral lines and turned volatile in early deals. At this point, domestic indices are trading flat with positive bias as buying in Oil & Gas, PSU and Power aiding sentiments, whereas selling in Consumer Durables, IT and TECK limit the upside. Some support came in as US Special Presidential Envoy for Climate John Kerry said India's goal of reaching 450 GW of renewable energy (RE) by 2030 is doable as it has already crossed the 100 GW RE mark. Though, some cautiousness crept in as India, the world's third-largest energy consumer and importer, warned of high oil prices hurting the nascent and fragile global economic recovery. Meanwhile, Moody's Analytics has said in a report on reopening in the Asia Pacific region that a rebound in industrial production and demand owing to easing mobility restrictions fuelled India's current recovery with production appearing to have regained lost ground during the second Covid-19 wave. However, it has flagged concerns around volatility in inflation caused by rising food and fuel prices.

On the global front, Asian markets traded mixed following the mostly positive cues overnight from Wall Street, as traders reacted positively to another batch of largely upbeat corporate earnings news and rising crude oil prices. They also remain concerned about the coronavirus infections in the region, which is hindering economic activity. Back home, PSU banking stocks will be in focus as the Centre asked public sector banks (PSBs) to aggressively target financial inclusion, expand pension and insurance coverage and, at the same time, use financial technology (fintech) to extend credit to borrowers during the festive season through co-lending arrangements. In scrip specific development, Tata Communications traded higher as its Q2FY22 consolidated net rose 10.6 per cent to Rs 425.38 crore on a YoY basis.

The BSE Sensex is currently trading at 61299.12, up by 39.16 points or 0.06% after trading in a range of 61164.03 and 61621.20. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.01%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.52%, PSU up by 1.11%, Power up by 0.81%, Utilities up by 0.62%, Healthcare up by 0.61%, while Consumer Durables down by 1.07%, IT down by 0.58%, Telecom down by 0.53%, TECK down by 0.46%, Consumer discretionary down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.84%, HDFC up by 1.30%, Power Grid up by 1.13%, Sun Pharma up by 1.07% and NTPC up by 0.85%. On the flip side, HCL Technologies down by 1.48%, Titan Company down by 0.90%, Tech Mahindra down by 0.75%, TCS down by 0.75% and Reliance Industries down by 0.62% were the top losers.

Meanwhile, amid concerns about the rising oil prices, India, the world's third-largest energy consumer, has warned that high oil prices will undermine global economic recovery, and nudged Saudi Arabia and other OPEC nations to work towards affordable and reliable supplies. Petrol and diesel prices have shot up to record highs across the country after relentless price increases since early May. Oil Minister Hardeep Singh Puri said ‘If energy prices remain high, global economic recovery will be undermined’. International oil prices had crashed to $19 per barrel in April last year as demand evaporated with most nations clamping lockdowns to control the spread of coronavirus. The demand recovered this year as vaccination against the infection revived economies world over. International benchmark Brent crude has since rallied to $84 per barrel.

He said ‘This has made fuel expensive and stoking fears of inflation’. Puri said India's oil import bill has climbed from $8.8 billion in June 2020 quarter to $24 billion this year because of a spike in global oil prices. He also said ‘India believes energy access has to be reliable, affordable and sustainable’, and added that economic recovery after a devastating pandemic has been fragile and it is further being threatened by high prices. India, which imports almost two-thirds of its oil needs from West Asia, has told crude oil producers, including the Organisation of Petroleum Exporting Countries (OPEC) that high oil prices will hasten the transition to alternate fuels and such rates will be counter-productive for the producers.

Recently, Puri had flagged the issue of high oil prices to Saudi Arabia, the UAE, Kuwait, Qatar, the US, Russia and Bahrain. He conveyed India's strong preference on responsible and reasonable pricing, which is mutually beneficial for consumers and producers. Puri said volatility in international prices is not just hurting India but also industrialised nations. While the world has begun the transition towards cleaner fuels such as electric-powered vehicles and hydrogen, most nations are still dependent on oil to fuel their economies. And high oil prices will hurt demand recovery. India is 85 per cent dependent on imports to meet its oil needs and relies on overseas shipments to meet 55 per cent of the gas needs.

The CNX Nifty is currently trading at 18294.85, up by 28.25 points or 0.15% after trading in a range of 18247.55 and 18384.20. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were IOC up by 3.22%, ONGC up by 2.71%, BPCL up by 2.70%, Kotak Mahindra Bank up by 1.85% and Tata Motors up by 1.36%. On the flip side, HCL Technologies down by 1.54%, Titan Company down by 0.87%, Hero MotoCorp down by 0.81%, TCS down by 0.75% and Tech Mahindra down by 0.70% were the top losers.

Asian markets are trading mixed; Straits Times added 0.57 points or 0.02% to 3,198.65, Taiwan Weighted advanced 53.99 points or 0.32% to 16,941.81, KOSPI gained 4.65 points or 0.15% to 3,017.78 and Shanghai Composite rose 16.62 points or 0.46% to 3,603.62. On the other hand, Nikkei 225 declined 183.72 points or 0.63% to 29,071.83, Hang Seng fell 21.74 points or 0.08% to 26,114.28 and Jakarta Composite was down by 10.10 points or 0.15% to 6,645.90.
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