The benchmark indices were currently trading near the flat line with some negative bias in morning trade. The Nifty was trading below the 17,350 mark. IT shares declined for the third day in a row.
At 10:23 IST, the barometer index, the S&P BSE Sensex, was down 31.33 points or 0.05% to 58,218.93. The Nifty 50 index lost 13.95 points or 0.08% to 17,339.55.
In the broader market, the S&P BSE Mid-Cap index rose 0.16% while the S&P BSE Small-Cap index added 0.24%.
The market breadth was positive. On the BSE, 1683 shares rose and 1121 shares fell. A total of 145 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.
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 IT index shed 0.34% to 34,562.00, extending losses for third day. The index has declined 2.43% in three sessions.
MindTree (down 0.94%), Wipro (down 0.83%), Tech Mahindra (down 0.73%), Infosys (down 0.49%), Coforge (down 0.39%) and Mphasis (down 0.37%) declined.
Stocks in Spotlight:
SBI Life Insurance Company tumbled 3.95% to Rs 1171.75, amid block deal buzz. On the BSE, 2.37 crore shares of the company were traded in the counter so far as against an average trading volume of 1.52 lakh shares in the past one month.
According to media reports, Canada Pension Plan Investment Board (CPPIB) is set to sell nearly 2.3 crore shares of the insurance company equalling 2.3% equity, for around Rs 2,800 crore in a block deal. CPPIB held 2.85 crore shares (equivalent to 2.86% stake) of the company as on 30 June 2021.
Blue Dart Express added 1.96% to Rs 6493.50. The company partnered with drone delivery startup Skye Air to flag off the first drone flight for Telangana Government's ambitious project - 'Medicine from the Sky'. The drone delivery trials for delivery of medicines and vaccines will be held in Vikarabad, Hyderabad from 9th September till 17th October, the company said.
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