Markets pare some losses but continue to trade in red

Indian equity benchmarks have pared some of their early losses but continue to trade in red in the early noon deals with losses of around a quarter percent, which has once again dragged Sensex and Nifty below psychologically crucial 25,150 and 7,650 levels respectively, on sustained selling activities by market-participants amid weak global cues. Asian markets were trading lower as investors remained on toes after the mixed US jobs data which failed to give clarity on the time of Fed rate hike. Back home, the weakness in rupee too was weighing down the sentiments. The rupee depreciated by 17 paise to 66.63 against the dollar in noon trade as the US currency strengthened in overseas markets. However, losses remained capped with government stating that it wants an extended Monsoon session so that the Constitutional amendment GST bill can be approved and has also appealed to Congress to support the key reform to accelerate the country's growth.

The BSE Sensex is currently trading at 25135.02, down by 66.88 points or 0.27% after trading in a range of 25056.80 and 25387.32. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.39%, while Small cap index declined by 0.87%.

The top losing sectoral indices on the BSE were Metal down by 1.49%, Power down by 1.30%, PSU down by 1.00%, INFRA down by 0.95%, Capital Goods down by 0.94%, while there were no gainers on the sectoral index.

The top gainers on the Sensex were HDFC up by 2.53%, Maruti Suzuki up by 1.04%, Cipla up by 1.02%, Tata Motors up by 1.01% and ITC up by 0.49%. On the flip side, GAIL India down by 2.76%, Coal India down by 2.70%, Lupin down by 2.06%, Dr. Reddys Lab down by 1.59% and BHEL down by 1.50% were the top losers.

Meanwhile, finance minister Arun Jaitley, asserting that India is on a “sound footing” as manufacturing and services sectors have begun picking up and the government was focused on strengthening the real economy rather than being swayed by the market volatility, has said that factors like the Chinese devaluation of yuan and the US Fed's likely interest rate hike are 'transient' and it will be only the real economy that will dictate the currency rate fluctuations and markets in India.

Jaitley while speaking on the sidelines of the G20 meeting of Finance Ministers and Central Bank Governors, pitched for global safety nets to address concerns over volatility in currency and stock markets, a demand that came against the backdrop of the economic shocks triggered by the Chinese devaluation of yuan. He also sought well-designed and quickly-triggered safety nets under IMF (International Monetary Fund) by strengthening of liquidity arrangements by multilateral swap arrangements between member countries to tackle negative spillovers arising from domestic action.

The FM also said that Fed hike remains a matter which the US will decide later this month. But, according to me, whatever situation emerges, that would be only a transient phase and therefore our response is that we have to strengthen our own real economy. He said that India needs to ensure that the parameters of its own real economy are strengthened and the government progresses well on that track.

Meanwhile, the G20 which includes the advanced economies such as the USA and Europe as well as the as the BRICS members, called for moving towards market-determined currency rates, in backdrop of China's surprise decision to revalue the yuan as it tried to contain the market turmoil that caused the currency to drop the most in 21 years last month.

The CNX Nifty is currently trading at 7628.80, down by 26.25 points or 0.34% after trading in a range of 7606.85 and 7705.05. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.63%, Maruti Suzuki up by 1.10%, Cipla up by 1.02%, Tata Motors up by 0.87% and Grasim Industries up by 0.63%. On the flip side, Coal India down by 2.91%, GAIL India down by 2.81%, Idea Cellular down by 2.75%, Lupin down by 2.08% and HCL Tech. down by 1.73% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite decreased 95.57 points or 2.16% to 4,319.77, Hang Seng decreased 94.05 points or 0.45% to 20,746.56, Shanghai Composite decreased 41.09 points or 1.3% to 3,119.08, Straits Times decreased 15.1 points or 0.53% to 2,848.71, Taiwan Weighted decreased 14.04 points or 0.18% to 7,986.56, FTSE Bursa Malaysia KLCI decreased 8.86 points or 0.56% to 1,580.30 and KOSPI Index decreased 2.82 points or 0.15% to 1,883.22. On the flip side, Nikkei 225 increased 24.86 points or 0.14% to 17,817.02.