The key equity indices continued to trade near the flat line in mid morning trade. At 11:26 IST, the barometer index, the S&P BSE Sensex, was down 9.84 points or 0.02% to 58,240.42. The Nifty 50 index was trading flat at 17,353.55.
In the broader market, the S&P BSE Mid-Cap index rose 0.25% while the S&P BSE Small-Cap index added 0.32%.
The market breadth was positive. On the BSE, 1728 shares rose and 1207 shares fell. A total of 171 shares were unchanged.
Investor sentiment was dampened amid fears that the delta variant of the COVID-19 virus may slow down economic recovery.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 222,509,916 with 4,595,999 deaths. India reported 393,614 active cases of COVID-19 infection and 441,749 deaths according to the data from the Ministry of Health and Family Welfare, Government of India.
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Economy:
S&P Economist for Asia Pacific, Vishrut Rana, speaking at the 'India Credit Spotlight 2021', said, Looking ahead we continue to expect fairly strong economic growth going into calendar Q3 and Q4.
He made this statement even as he listed out the challenges the economy is likely to face in the second half of the FY. The second wave of the pandemic has been pretty costly to economic activity. Households have been affected . households are going to be repairing their balance sheets and withholding from spending which means activity will remain below trend once the recovery gets underway, said Rana.
He added, The outlook is mixed and energy prices are likely to remain elevated but the real influential element in the inflation basket is going to be food. We have monsoon rains below normal so far which could lead to rise in food inflation. Overall inflation is likely to remain elevated and prevent the central bank from taking too much easing measures.
Given India's weak fiscal settings and high stock of debt around 90% of GDP, the nominal GDP growth is going to be very important to prevent any further erosion of fiscal settings in the country and to enable some degree of fiscal consolidation going forward, S&P Global Ratings Director (Sovereign) Andrew Wood said.
Meanwhile, Indian government and the Asian Development Bank (ADB) on Wednesday signed a $300 million loan as additional financing to scale up improvement of rural connectivity to help boost rural economy in Maharashtra. The additional financing for the ongoing Maharashtra Rural Connectivity Improvement Project will help improve an additional 1,100 rural roads and 230 bridges for a total length of 2,900 kilometers in 34 districts.
The Ministry of Finance in a statement said with the additional financing, the overall project will improve the condition and safety of five thousand kilometer of rural roads and over 200 bridges connecting rural communities.
Buzzing Index:
The Nifty Realty index slipped 0.88% to 417, extending losses for the third day. The index has declined 3.26% in three sessions.
Prestige Estates (down 2.43%), Indiabulls Real Estate (down 2.15%), Sobha Developers (down 1.50%), Sunteck Realty (down 1.18%), DLF (down 1.08%), Oberoi Realty (down 0.59%), The Phoenix Mills (down 0.56%) and Godrej Properties (down 0.26%) edged lower.
Stocks in Spotlight:
Rain Industries soared 6.12% to Rs 243.45. The company said its US-based subsidiary, Rain Carbon, has resumed calcined petroleum coke (CPC) production at three of its US facilities. "The restart process has begun at a fourth plant that was impacted by Hurricane Ida, which hit the Gulf Coast on August 29," the company said in a statement.
Godawari Power & Ispat hit an upper circuit of 5% at Rs 1,097.05 after the company said that its board will consider a stock split and bonus issue of shares on Tuesday, 14 September 2021. Further, the board will re-consider the scheme of arrangement of Godawari Power and Ispat with Jagdamba Power and Alloys.
Global Markets:
Asian stocks mostly edged lower on Thursday as investors continue to fret over a slowdown in the recovery from the pandemic.
China's consumer price index rose 0.8% year-on-year in August. Meanwhile, the producer price index jumped 9.5% from a year ago.
Wall Street ended lower on Wednesday, spooked by worries that the Delta coronavirus variant could blunt the economy's recovery and on uncertainty about when the US Federal Reserve may pull back its accommodative policies.
Meanwhile, the Federal Reserve said in its latest Beige Book that U.S. businesses are experiencing rising inflation that is being intensified by a shortage of goods and likely will be passed onto consumers in many areas.
The Fed also reported that growth overall had downshifted slightly to a moderate pace amid rising public health concerns during the July through August period that the report covers. The deceleration in economic activity was largely attributable to a pullback in dining out, travel, and tourism in most Districts, reflecting safety concerns due to the rise of the Delta variant, and, in a few cases, international travel restrictions, the report said.
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