Markets remains in red despite the surge in IT and tech stocks

Indian markets are not looking coming out of their slumber anytime soon and continue to trade in tight range after their initial fall. There is no serious recovery attempt till the noon and both the major indices were still lower by around a percent, with broader indices going neck-in-neck to the benchmarks. Traders seem to have concentrated on the IT and tech stocks only after the better than expected Infosys numbers. The IT bellwether has not only surpassed market expectations on almost all operating and financial fronts but gave a surprise to the street with a 1:1 bonus announcement. However, the company has maintained its guidance at 7-9% in dollar revenue growth, which is much lower than Nasscom’s growth rate of around 13-15%. The market sentiment was further being weighed down by the weakness in rupee which fell in early trade on Friday due to fresh demand for the US currency from banks and importers. The weak start of the European markets too had added pressure on the local indices sentiment.

The BSE Sensex is currently trading at 26450.82, down by 186.46 points or 0.70% after trading in a range of 26301.38 and 26555.92. There were 6 stocks advancing against 24 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 lost 0.32%.

The gaining sectoral indices on the BSE were IT up by 2.56%, TECK up by 1.66%, Consumer Durables up by 0.15% while, Metal down by 2.59%, FMCG down by 1.81%, Auto down by 1.65%, Bankex down by 1.15%, Capital Goods down by 0.96% were the major losers.

The top gainers on the Sensex were Infosys up by 6.88%, BHEL up by 2.44%, Dr. Reddys Lab up by 1.62%, Hero MotoCorp up by 1.54% and Sun Pharma Inds up by 1.13%. On the flip side, Tata Motors down by 3.84%, Hindalco down by 3.65%, Tata Steel down by 2.97%, Sesa Sterlite down by 2.50% and HDFC down by 2.49% were the top losers.

Meanwhile, in order to boost the international trade, India has initiated measures to ease customs norms. The government has decided to set up a national committee which will have representation from 7-8 departments to look after all aspects of trade facilitation. The committee will suggest and implement measurers to ensure seamless movement of cargo by addressing constraints like high transaction costs and poor infrastructure.

The move to ease custom norms came after the government blocked an international agreement on easing trade regulations. On July 31, India vetoed the trade facilitation agreement at the World Trade Organisation (WTO), arguing that there should be parallel deal on food security issue. However, India is fully committed to trade facilitation which is aimed at simplifying customs procedure, reducing transactions cost and increasing transparency.

Prime Minister Narendra Modi, during his US visit, had told President Barack Obama that trade facilitation was important for India and it expected the US' support in addressing India's concerns over public stockholding for food security. Moreover, Finance Minister Arun Jaitley in its budget speech had said that the government will allocate significant funds towards trade facilitation and provide facility like extension of 24x7 customs clearance facilities to many more ports, airports and sea ports.

The CNX Nifty is currently trading at 7902.80, down by 57.75 points or 0.73% after trading in a range of 7854.50 and 7914.20. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Infosys up by 6.86%, HCL Tech up by 2.54%, BHEL up by 2.47%, Asian Paints up by 2.42% and Dr Reddys Lab up by 1.72%. On the flip side, Jindal Steel & Power down by 4.56%, Tata Motors down by 3.96%, Hindalco down by 3.67%, Cairn India down by 3.40% and Tata Steel down by 3.13% were the top losers.

In the Asian region, all the major indices are trading in red Hang Seng slumped by 426.52 points or 1.81% to 23,108.01, Nikkei 225 lost 178.38 points or 1.15% to 15,300.55, Jakarta Composite decreased by 37.63 points or 0.75% to 4,956.25, Straits Times was lower by 33.08 points or 1.01% to 3,226.17, KOSPI Index was down by 24.33 points or 1.24% to 1,940.92, Shanghai Composite decreased by 17.95 points or 0.75% to 2,371.42 and FTSE Bursa Malaysia declined by 17.18 points or 0.94% to 1,812.55.