Benchmarks trade lower amid weak global cues in early morning deals

After making a flat opening, Indian equity markets slipped in red, extending their previous session’s losses, on account of rising fears about the stability of Chinese economy. The sentiments were also under pressure on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 255.42 crore on August 18, 2015, as per provisional data released by the stock exchanges. Depreciation in Indian rupee against dollar too weighed down the sentiments. The rupee weakened by 12 paise to 65.43 against the US dollar in early trade today at the Interbank Foreign Exchange. Metal shares were trading lower amid concerns of weak demand from China.  However, Realty stocks were trading higher following environment minister Prakash Javadekar’s announcement that the eco-sensitive zone (ESZ) around the Okhla Bird Sanctuary in Delhi will be kept within reasonable limits, keeping in mind the requirements of property buyers within the 10 km radius of the sanctuary.

In scrip specific development, Glenmark Pharmaceuticals was trading higher after the company received final approval by the US drug regulator for Drospirenone and Ethinyl Estradiol tablets.

On the global front, US markets ended modestly lower as investors digested a mixed bag of quarterly results and an upbeat report on home construction in July. Asian markets were trading mostly in red after big fall in Chinese shares raised fresh fear about the stability of China's economy.

Back home traders were seen piling up position in Healthcare, Realty, Oil & Gas, IT and Consumer Durables, while selling was witnessed in Metal, Auto, Power, Capital Goods and Bankex. The market breadth on BSE was positive in the ratio of 1001: 725 while 65 scrips remained unchanged. 

The BSE Sensex is currently trading at 27800.00, down by 31.54 points or 0.11% after trading in a range of 27721.25 and 27865.85. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.09%, while Small cap index gained 0.28%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.19% Realty up by 0.72%, Oil & Gas up by 0.64%, IT up by 0.46% and Consumer Durables up by 0.37%, while Metal down by 0.84%, Auto down by 0.45%, Power down by 0.39%, Capital Goods down by 0.38% and Bankex down by 0.27% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 2.22%, Cipla up by 1.89%, Dr. Reddys Lab up by 1.05%, Lupin up by 0.89% and Wipro up by 0.74%. On the flip side, Bharti Airtel down by 2.02%, Hindalco down by 1.52%, HDFC down by 1.17%, Mahindra & Mahindra down by 1.04% and Coal India down by 1.02% were the top losers.

Meanwhile, moving a step further in the policy of improving the ease of doing business in the country, the government will soon finalise three new important laws - the litigation policy, the bankruptcy code and an arbitration law. Finance Minister Arun Jaitley stated that the litigation policy is more or less ready, after being cleared by a small informal group of ministers. The bankruptcy code was to be ready by the end of July and it's going to be ready any of these days. The arbitration law is already cleared by Cabinet and it will be introduced in Parliament. So, all the three are ready.

Jaitley further stated that when legal reforms are involved, it's not merely between the litigant or the industry at one hand and the government on the other, but there is a third agency which is the courts. Therefore, courts not being a part of the legislative process, are only interpreters of the legislative decisions.

India is ranked at 142th position in terms of ease of doing business among the 189 nations that the World Bank ranks. In 2015, of the 10 parameters that the World Bank considers while giving final cumulative rankings, India improved on only one, protecting minority investors, while it came close to the bottom in two categories. It stood a wretched 184th in the category “Dealing with Construction Permits,” and 186th in “Enforcing Contracts.”  According to World Bank getting construction permits in India involved an average of 25 procedures that took 186 days, and cost 28 per cent of the warehouse value. Enforcing contracts took 46 procedures and 1420 days - nearly four years. Getting electricity took 106 days and registering a property took 47 days.

India plans to improve its position in terms of ease of doing business to 50th by 2017.  World Bank President Jim Yong Kim had in July last year said India could jump 50 spots by just implementing the Gujarat model of reforms. According to the World Bank report, the overall ease-of-doing-business ranking tells only part of the story, and so do changes in rankings.

The CNX Nifty is currently trading at 8456.70, down by 9.85 points or 0.12% after trading in a range of 8425.95 and 8471.25. There were 16 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 2.19%, Cipla up by 2.00%, BPCL up by 2.00%, Lupin up by 1.20% and Dr. Reddys Lab up by 0.97%. On the flip side, Bharti Airtel down by 2.19%, NMDC down by 1.57%, Bank Of Baroda down by 1.48%, Hindalco down by 1.41% and HDFC down by 1.11% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 213.9 points or 0.91% to 23,261.07, Nikkei 225 decreased 177.4 points or 0.86% to 20,377.07, Taiwan Weighted decreased 136.04 points or 1.66% to 8,041.18, Shanghai Composite decreased 116.76 points or 3.12% to 3,631.40, KOSPI Index decreased 34.13 points or 1.74% to 1,922.13 and Jakarta Composite decreased 30.78 points or 0.68% to 4,479.70.

On the flip side, Straits Times increased 0.74 points or 0.02% to 3,050.39 and FTSE Bursa Malaysia KLCI increased 3.86 points or 0.24% to 1,583.46.