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Markets remain in red terrain in morning deals
Oct-22-2020

Indian equity benchmarks continued to trade in red terrain in morning deals, tracking losses in index majors ICICI Bank, Sun Pharma and Power Grid amid weak cues from global markets.  Traders remained cautious with a private report that the government expects the fiscal deficit to be close to 7 percent of GDP or thereabouts in the current financial year. The general deficit is unlikely to be lower than 11 percent, with the state government borrowings estimated at 4 percent levels. However, losses remain capped as the Reserve Bank announced an on tap Targeted Long-Term Repo Operations (TLTRO) scheme of up to Rs 1 lakh crore to enable banks to provide liquidity support to a host of sectors, including agriculture, retail, drugs and pharmaceuticals and MSMEs. On the sectoral front, Agriculture industry stocks were in focus as Government-owned FCI and state procurement agencies have bought 106.88 lakh tonnes of paddy so far in the kharif marketing season for Rs 20,180 crore.

On the global front, Asian markets were trading lower, as coronavirus counts continued to climb in Europe and North America and it remained unclear whether U.S. stimulus negotiations would continue ahead of the presidential election to be held on November 3. Some concern also came as the International Monetary Fund said the Asia Pacific region is likely to see economic output remain below pre-pandemic trends over the medium term, even as China’s recovery leads the rest of the world. In its latest assessment of the region, the IMF warned of significant downside risks and economic scarring as labor market participation falls with the most vulnerable likely to be the hardest hit.

The BSE Sensex is currently trading at 40574.13, down by 133.18 points or 0.33% after trading in a range of 40413.65 and 40721.57. 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 0.04%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Telecom up by 1.02%, Realty up by 0.82%, Capital Goods up by 0.70%, Industrials up by 0.59% and Consumer Durables up by 0.36%, while Healthcare down by 1.28%, Energy down by 0.61%, Bankex down by 0.55%, Auto down by 0.44% and Power down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.62%, Bajaj Finance up by 1.32%, Bharti Airtel up by 1.25%, Bajaj Finserv up by 1.20% and Larsen & Toubro up by 1.05%. On the flip side, ICICI Bank down by 1.33%, Sun Pharma down by 1.09%, Power Grid down by 1.07%, Indusind Bank down by 1.03% and Nestle down by 0.98% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its report on the Asia-Pacific region has slashed this year's economic forecast for Asia, reflecting a sharper-than-expected contraction in countries like India, a sign the coronavirus pandemic continues to take a heavy toll on the region. While the IMF upgraded next year's growth forecast, it warned the recovery will be sluggish and patchy with countries dependent on tourism seen taking a particularly hard hit.

It said fear of infection and social distancing measures are dimming consumer confidence and will keep economic activity below capacity until a vaccine is developed.  The IMF said it expects Asia's economy to contract 2.2% this year. That decline is 0.6 of a percentage point larger than its forecast in June, due to sharp slumps in countries like India, the Philippines and Malaysia. India's economy is likely to shrink 10.3% this year in stark contrast to China, which is set to expand 1.9%.

It said Asia's economy is likely to grow 6.9% in 2021 thanks to the boost from expected stronger recoveries in China, the United States and the euro area. China's recovery can boost regional trade, weak global growth, closed borders, and festering tensions around trade, technology, and security have worsened the prospects for a trade-led recovery in the region.

The CNX Nifty is currently trading at 11882.15, down by 55.50 points or 0.46% after trading in a range of 11853.55 and 11939.55. There were 13 stocks advancing against 36 stocks declining, while 1 stock remains unchanged on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 1.94%, ONGC up by 1.70%, Britannia Industries up by 1.47%, Bajaj Finance up by 1.05% and Tata Motors up by 1.04%. On the flip side, Dr. Reddys Lab down by 2.91%, Cipla down by 1.90%, Eicher Motors down by 1.49%, ICICI Bank down by 1.44% and Hindalco down by 1.40% were the top losers.

Asian markets were trading lower; Hang Seng decreased 55.31 points or 0.22% to 24,699.11, Nikkei 225 slipped 161.01 points or 0.68% to 23,478.45, Taiwan Weighted dropped 22.43 points or 0.17% to 12,854.82, KOSPI fell 26.82 points or 1.13% to 2,344.04, Straits Times trembled 5.51 points or 0.22% to 2,520.10, Shanghai Composite declined 27.70 points or 0.83% to 3,297.32 and Jakarta Composite lost 16.43 points or 0.32% to 5,080.02.
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