Shares bounce back; metal stocks correct

Equity indices bounced back from the day's low in mid-morning trade. IT, banks and financial stocks supported the recovery while metal shares corrected.

At 11:30 IST, the barometer index, the S&P BSE Sensex, was up 27.86 points or 0.06% at 48,204.88. The Nifty 50 index was down 4.65 points or 0.03% at 14,128.80.

In broader market, the S&P BSE Mid-Cap index rose 0.37% while the S&P BSE Small-Cap index was added 0.41%.

The market breadth turned positive. On the BSE, 1459 shares rose and 1271 shares fell. A total of 158 shares were unchanged.

On Monday, foreign portfolio investors (FPIs) bought shares worth Rs 1,843.22 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 715.21 crore in the Indian equity market, provisional data showed.

Economy:

The Ministry of Finance has released the 10th weekly installment of Rs 6,000 crore to the states to meet the GST compensation shortfall. Now, more than 50% of the estimated GST compensation shortfall has been released to the States and UTs with the Legislative Assembly. The government had set up a special borrowing window in October 2020 to meet the estimated shortfall of Rs 1.10 lakh crore in revenue arising on account of implementation of GST. The borrowings are being done through this window by the Central Government on behalf of the States and UTs. The amount released this week was the 10th installment of such funds provided to the States. The amount has been borrowed this week at an interest rate of 4.1526%. So far, an amount of Rs 60,000 crore has been borrowed by the central government.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 8,56,44,224 with 18,52,208 deaths. India reported 2,31,036 active cases of COVID-19 infection and 1,49,850 deaths while 99,75,958 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Buzzing Index:

The Nifty Metal index slipped 1.52% to 3,372.45 on profit selling. The index rallied 7.36% in past four trading sessions.

Hindalco Industries (down 2.58%), JSW Steel (down 1.95%), NMDC (down 1.92%), National Aluminium Company (down 1.8%), Coal India (down 1.68%), Tata Steel (down 1.59%), Jindal Steel & Power (down 1.27%), Steel Authority of India (down 1.07%) and Vedanta (down 0.68%) declined.

Stocks in Spotlight:

Force Motors declined nearly 1%. The commercial vehicle manufacturer on Monday said its production tanked 47.12% to 1,258 units in December 2020 as against 2,379 units in December 2019. Domestic sales slumped 68.73% to 787 units in December 2020 as against 2,517 units in December 2019. However, exports jumped 29.13% to 297 units in December 2020 as against 230 units in December 2019.

KNR Construction gained 3.27% after the infrastructure company received orders worth of Rs 603.63 crore from Project Director, Highways (FAC), Chennai Kanyakumari Industrial Corridor Project, Chennai.

Global Markets:

Asian advanced on Tuesday. The sentiment was fragile as fears surrounding the coronavirus pandemic lingered.

US stocks dropped on Monday, the first trading day of 2021, amid concerns about global coronavirus cases and the Georgia runoff elections.

Investors are keeping eye on Tuesday's Senate runoffs in Georgia, which could have a big impact on incoming U.S. President Joe Biden's economic policies.

In the U.K., Prime Minister Boris Johnson imposed a national lockdown on England to curb the spread of the new coronavirus variant. As part of the new restrictions, people can only leave their homes for essentials, work if they can't from home and exercise. Most schools will also move to remote learning, including universities.

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