The domestic equity benchmarks continued to trade with minor cuts in mid morning trade. The Nifty was trading a tad above the 15,700 mark. PSU banks witnessed value buying after a two-day losing streak.
At 11:28 IST, the barometer index, the S&P BSE Sensex, was up 60.38 points or 0.12% to 52,422.33. The Nifty 50 index lost 15.20 points or 0.10% to 15,706.30.
In the broader market, the S&P BSE Mid-Cap index gained 0.01% while the S&P BSE Small-Cap index rose 0.25%.
The market breadth was positive. On the BSE, 1585 shares rose and 1407 shares fell. A total of 139 shares were unchanged.
Investor sentiment was upbeat after the U.S.' National Institute of Health reportedly said India's Covaxin effectively neutralizes both Alpha and Delta variants of coronavirus. While this report is still in its early stages, if true, this could help prevent a deadly third wave.
Economy:
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The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) fell to 48.1 in June from 50.8 in May, slipped below the critical no-change mark of 50.0 for the first time since July 2020. The latest reading pointed to a renewed deterioration in the health of the sector that was, however, moderate.
India's eight infrastructure sectors grew 16.8% in May because of the low base of last year, while statewide lockdowns because of the second wave of the coronavirus pandemic meant the output actually contracted 3.7% from April. Coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity count among the core sectors, which constitute 40% of the Index of Industrial Production.
India's fiscal deficit at the end of May came in at 8.2% of the budgeted estimate for FY22 as against 59% in the same period last year, on the back of better revenues and lower subsidy pay out, according to official data released Wednesday. Fiscal deficit in April-May stood at Rs 1.23 lakh crore, data showed. The budget target set for fiscal deficit in FY2021-22 is Rs 11.40 lakh crore.
India's current account deficit (CAD) for the quarter ended March 2021 widened to 1% of GDP, or $8.1 billion, from 0.3% ($2.2 billion) in the preceding quarter on the back of a higher trade deficit. For the quarter ended March 2020, the current account was in a surplus of $600 million due to lower trade volumes.
The Reserve Bank of India (RBI) said that the CAD in Q4FY21 was primarily because of a higher trade deficit and lower net invisible receipts than in the corresponding period of the previous year.
For the full year FY21, the current account balance recorded a surplus of 0.9% of GDP as against a deficit of 0.9% in FY20 on the back of a sharp contraction in the trade deficit to $102.2 billion from $157.5 billion in FY20. This is the first time that the country has recorded an annual current account surplus in 17 years.
India's external debt surged by $11.5 billion year-on-year to $570 billion as of March-end 2021, according to the Reserve Bank of India data released on Wednesday. The external debt to GDP ratio rose to 21.1% as of March-end 2021 from 20.6% a year ago, the data on India's External Debt showed.
Buzzing Index:
The Nifty PSU Bank index rose 0.38% to 2,528.30. The index declined 1.89% in the past two sessions.
SBI (up 0.68%), Canara Bank (up 0.63%), Jammu and Kashmir Bank (up 0.62%), Bank of India (up 0.45%) and Bank Of Baroda (up 0.35%) advanced.
Indian Bank (down 1.31%), Indian Overseas Bank (down 1.25%), Punjab & Sind Bank (down 1.14%) and Central Bank of India (down 0.36%) declined.
Union Bank of India rose 0.52% to Rs 38.75. The bank's board has approved raising of equity capital not exceeding Rs 3,500 crore, within the overall limit of Rs 9,700 crore, through public issue (i.e. Follow-on Public Offer) and/or rights issue and/or private placements, including Qualified Institutions Placements and/or preferential allotment to the Government of India and/or other institutions and/or through any other mode(s).
Global Markets:
Most Asian stocks declined on Thursday amid concerns about the more contagious delta strain of Covid-19 and looked ahead to a U.S. payrolls report. Markets in Hong Kong are closed on Thursday for a holiday.
China's factory activity expanded at a softer pace in June. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) fell to 51.3 last month from May's 52, marking the 14th month of expansion.
Japanese big manufacturers' business confidence improved in the second quarter to hit a two-and-half-year high, a central bank survey showed. Service-sector sentiment also turned positive for the first time in five quarters, the Bank of Japan's (BOJ) Tankan survey showed.
The S&P 500 nabbed its fifth straight record closing high on Wednesday as investors shrugged off positive economic data and looking toward Friday's highly anticipated employment report.
U.S. private payrolls increased more than expected in June. Private payrolls increased by 692,000 jobs in June. Data for May was revised lower to show 886,000 jobs added instead of the initially reported 978,000.
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