Benchmarks continue to trade in red in late morning session

After getting a cautious start, Indian equity benchmarks continued to trade in red in late morning session as funds and retail investors engaged in reducing positions, after India's exports contracted for the eighth straight month by 10.3 percent in July to USD 23.13 billion, pushing the trade deficit to USD 12.81 billion. Down in red with loss of over 0.80%, both Sensex and Nifty were trading below the psychological 27,800 and 8,450 levels respectively. Weak trend in Asian stocks coupled with depreciation in rupee value too weighed on the sentiment. However, gains in selected PSU have restrained the market to extend losses. PSU banks like Bank of Baroda came into jubilant mood after the government launched seven-pronged revamp plan to revive the ailing PSU Banks, including a Rs 20,000-crore capital infusion lifeline. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 403.76 crore on August 14, 2014. On global front, Asian stock markets were dragged lower by volatile Chinese equities on Monday, as relative stability in the yuan failed to assuage underlying concerns that Beijing may push its currency further down after last week's surprise devaluation. Overnight, US stocks ended modestly higher in the last session on getting some positive economic data, though traders remained concerned about the timing of the Federal Reserve’s plans to raise interest rates. Back home, Indian rupee depreciated 15 paise to 65.15 against the US dollar in early trade due to appreciation of the American currency overseas.

Back on street, stocks from Consumer Durables, PSU and Metal counters were supporting the markets’ uptrend, while those from Realty, Oil & Gas and Capital Goods counters was adding to the underlying cautious undertone. In scrip specific development, Shares of Birla Corporation have rallied after the company announced plans to acquire the Jojobera and Sonadih cement businesses from Lafarge India for an enterprise value of Rs 5,000 crore. On the flip side, shares of Oil and Natural Gas Corporation (ONGC) have dipped after the company reported net profit of Rs 5,460 crore for the quarter ended June 30, 2015 against an average analyst estimates of Rs 6,029 crore.

The market breadth on BSE was negative, out of 2243 stocks traded, 975 stocks advanced, while 1197 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27761.22, down by 306.09 points or 1.09% after trading in a range of 27739.13 and 28095.97. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.01%, while Small cap index down by 0.13%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.56%, PSU up by 0.32% and Metal up by 0.05%, while Realty down by 1.75%, Oil & Gas down by 1.31%, Capital Goods down by 1.24%, IT down by 1.11% and TECK down by 0.96% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.94%, Tata Steel up by 0.89%, Sun Pharma up by 0.73% and Coal India up by 0.36%. On the flip side, Cipla down by 3.99%, ONGC down by 3.01%, Hindalco down by 2.52%, Vedanta down by 2.24% and Infosys down by 2.08% were the top losers.

Meanwhile, reflecting the sluggish global commodity prices, especially of petroleum products, rice, iron ore, oil meal and leather products, India's merchandise exports contracted for the eighth month running in July, registering a 10.3 per cent drop over last year. While exports came in at $23.1 billion, Imports too fell 10.3 per cent to $35.95 billion and the trade deficit widened to $12.8 billion in July from $10.8 billion in June. However, compared with July last year, when it was $ 14.27 billion, the deficit has narrowed. The trade deficit for April-July, 2015-16 was estimated at $45 billion compared with $47.5 billion in the period during April-July, 2014-15.

Exports during July, 2015 were valued at $23137.26 million, 10.30 per cent lower in Dollar terms than the level of $25792.68 million during July, 2014. In rupee term Exports were of Rs 147233.94 crore, 4.95 per cent lower in compared to Rs.154907.25 crore in the same period last year. Cumulative value of exports for the period April-July 2015-16 was US $ 89828.16 million  as against $105726.16 million, registering a negative growth of 15.04 per cent in Dollar terms and  in rupee term it stood at Rs 570549.18 crore compared to Rs 632793.07 crore, down by 9.84 per cent in the same period last year.

Imports during July, 2015 were valued at $35949.72 million in Dollar terms, lower by 10.28 per cent at $ 40068.01 million. In rupee term the Imports stood at Rs 228766.07 crore, lower by 4.94 per cent from Rs 240642.83 crore in July, 2014. Cumulative value of imports for the period April-July 2015-16 was $134866.28 million as against $ 153274.90 million, registering a negative growth of 12.01 per cent. In rupee terms inports valued at Rs 856596.37 crore compared to Rs 917413.18 crore, down by 6.63 per cent in the same period last year.

Oil imports during July, 2015 were valued at $9486.93 million, 34.91 per cent lower than oil imports valued at $14574.45 million in the corresponding period last year. Oil imports during April-July, 2015-16 were at $ 34144.90 million which was 37.91 per cent lower than the oil imports of $ 54991.04 million in the corresponding period last year.

Non-oil imports during July, 2015 stood at $26462.79 million, 3.80 per cent higher than non-oil imports of $25493.56 million in July, 2014. Non-oil imports during April-July, 2015-16 were valued at $ 100721.38 million, 2.48 per cent higher than the level of such imports valued at $ 98283.86 million in April-July, 2014-15.

India's exports were hurt because of a stronger currency and going further may suffer in the coming months too on account of the impact of devaluation of the Chinese currency and with global demand not showing any signs of a pickup.

The CNX Nifty is currently trading at 8447.45, down by 71.10 points or 0.83% after trading in a range of 8428.05 and 8530.60. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 11.17%, PNB up by 3.34%, SBI up by 3.13%, Idea Cellular up by 0.99% and Sun Pharma up by 0.89%. On the flip side, Cipla down by 4.02%, ONGC down by 2.90%, Vedanta down by 2.33%, Hindalco down by 2.09% and Mahindra & Mahindra down by 2.04% were the top losers.

Asian markets were trading mostly in red; Hang Seng was down by 0.99%, Taiwan Weighted down by 0.89%, FTSE Bursa Malaysia KLCI down by 1.51%, Straits Times down by 0.78%, KOSPI Index down by 0.45% and Shanghai Composite was down by 0.12%. On the flip side, Jakarta Composite was up by 0.02% and Nikkei 225 was up by 0.16%