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Weak trade continues over Dalal Street
Jan-15-2021

Weak trade continued over the Dalal Street in late morning deals, with both the Sensex and the Nifty trading lower in deep red. Mixed cues from other Asian markets impacted sentiments over the street. Traders were seen taking a note of reports that Former Reserve Bank of India (RBI) Governor Raghuram Rajan says the government should take advantage of the peaks in the Indian equity markets right now and sell stakes in PSUs while prioritising spending to get the economy back on track. He said the upcoming Budget for the fiscal year beginning April 1 should look to provide 'relief to the poorer households and small and medium enterprises.'  On the global front, Asian markets were trading mixed, after the Bank of Japan upgraded its economic assessment of three out of nine regions and downgraded one. Many regions, while noting that their economy had been in a severe situation due to the impact of the novel coronavirus, there were signs of picking up. However, the impact of a resurgence of Covid-19 had been pointed out recently, primarily in the services industry, the bank noted. The bank raised the assessment of Hokuriku, Shikoku and Kyushu- Okinawa regions and lowered its view on Hokkaido. Meanwhile, assessment of all other five regions, namely Tohoku, Kanto-Koshinetsu, Tokai, Kinki and Chugoku were left unchanged.

The BSE Sensex is currently trading at 49217.97, down by 366.19 points or 0.74% after trading in a range of 49088.03 and 49656.71. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.60%, while Small cap index was down by 0.60%.

The only gaining sectoral indices on the BSE were Telecom up by 3.05% and Power up by 0.23%, while Bankex down by 1.05%, FMCG down by 0.90%, IT down by 0.89%, Auto down by 0.76% and Consumer discretionary down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.38%, Bajaj Auto up by 0.75%, TCS up by 0.21%, NTPC up by 0.20% and Reliance Industries up by 0.17%. On the flip side, HDFC down by 1.80%, ICICI Bank down by 1.74%, HCL Tech. down by 1.73%, Ultratech Cement down by 1.50% and Kotak Mahindra Bank down by 1.31% were the top losers.

Meanwhile, rating agency CRISIL has projected CPI Inflation at 6.4% for fiscal 2021 (FY21).  It mentioned that after eight months above the Reserve Bank of India (RBI's) target band of 2-6%, Consumer Price Index (CPI) inflation was finally back in range, declining for the second straight month to a below-consensus 4.6% in December, from 6.9% in November. Average CPI inflation during April-December now measures 6.6%, down from the April-November average of 6.9%.

According to CRISIL, not only did CPI inflation fall on-month, aided by a massive decline in food prices, but the high base effect of last year also helped pull down headline inflation. But while core inflation softened marginally, fuel inflation went up in December. It said Core inflation, i.e., headline sans food and beverages, and fuel and light, softened only marginally at 5.6%, just 15 basis points (bps) lower than November, suggesting continuing stickiness in core inflation. This could be reflective of mild improvement in demand conditions on one hand and rising input prices on the other. Core inflation has a weight of 47.3%, and is a sizeable contributor to headline inflation.

It noted that clothing and footwear inflation rose to 3.5% in December, from 3.4% in November. Another category that saw upward inflation price pressure was recreation and amusement that rose to 5.2% from 4.5%. Health inflation also rose to 6.0% from 5.6%. That said, inflation softened in idiosyncratic categories, i.e. personal care and effects (to 11.7% from 12.0%) and transport and communication (to 9.3% from 11.1%).

The CNX Nifty is currently trading at 14500.30, down by 95.30 points or 0.65% after trading in a range of 14445.85 and 14617.45. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 3.42%, UPL up by 1.96%, Bajaj Auto up by 0.87%, GAIL India up by 0.66% and Tata Steel up by 0.66%. On the flip side, Hindalco down by 2.45%, BPCL down by 2.09%, Hero MotoCorp down by 1.67%, HCL Tech down by 1.65% and Shree Cement down by 1.61% were the top losers.

Asian markets were trading mixed; Nikkei lost 202.66 points or 0.71% to 28,495.60, KOSPI declined 52.19 points or 1.66% to 3,097.74, Jakarta Composite fell 37.18 points or 0.58% to 6,391.14 and Shanghai Composite was down by 18.94 points or 0.53% to 3,546.96. On the other hand, Straits Times rose 11.22 points or 0.37% to 3,011.22, Hang Seng gained 0.12 points to 28,496.98 and Taiwan Weighted added 71.55 points or 0.46% to 15,778.74.

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