Benchmarks continue to trade weak in late afternoon session

Indian equity markets continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters. Investors didn’t took any relief from Finance Minister Arun Jaitley’s statement that the government is confident of the new GST regime to roll out from the next fiscal and expressed confidence about an early resolution of pending disputes on direct taxes front. Traders were seen piling position in Power, Infra and PSU stocks while selling was witnessed in FMCG, Consumer Durables and Oil & Gas sector stocks. In the scrip specific development, DTH and cable operators like Dish TV and Den Networks were trading in green on report of FDI hike. The government is considering a proposal to hike foreign direct investment (FDI) limits to 100% in broadcasting carriage and content services, including direct-to-home (DTH) and cable networks in order to attract overseas investment and improve infrastructure.

On the global front, the Asian markets were trading mostly in red, while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,000 and 26,200 levels respectively. The market breadth on BSE was positive in the ratio of 1430:1040 while 122 scrips remained unchanged.

The BSE Sensex is currently trading at 26147.37, down by 71.54 points or 0.27% after trading in a range of 25972.54 and 26190.25. There were 9 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index up by 0.86%.

The gaining sectoral indices on the BSE were Power up by 1.18%, INFRA up by 1.16%, PSU up by 0.51%, Bankex up by 0.45%, Capital Goods up by 0.34% while, FMCG down by 0.71%, Consumer Durables down by 0.49%, Oil & Gas down by 0.26%, IT down by 0.17%, Realty down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 2.43%, Maruti Suzuki up by 1.67%, Axis Bank up by 1.33%, Tata Motors up by 1.13% and GAIL India up by 0.80%.

On the flip side, Reliance Industries down by 1.45%, Cipla down by 1.25%, Dr. Reddy’s Lab down by 1.16%, HDFC down by 1.11% and Bharti Airtel down by 1.02% were the top losers.

Meanwhile, India’s merchandise exports are forecast to hit its lowest in five years in 2015-16 between $265-268 billion, significantly lower than $310.5 billion in the previous fiscal, mainly on account of sharp erosion in commodity prices globally, according to Associated Chambers of Commerce & Industry of India (ASSOCHAM).

ASSOCHAM has said that it is not as if the entire export drop is coming around on the back of fall in demand for Indian goods. It is only that the global merchandise economy has moved away sharply from a very high cost, ultra bullish commodity situation to a bearish and low cost situation where demand relates mainly to the actual consumption which is rather low key.

It further stated that “Indian exports had achieved a landmark of $300 billion in 2011-12 for the first time making the country a sizeable player in global exports. Afterwards somehow, for one reason or the other we could reach a maximum of $314 billion in 2013-14, only to retrieve in the following year at $310 billion. But the fall this year is going to be very steep,”. The pricing power as was being mirrored in the futures trading markets all over the world - be it for crude oil, metals, coal, copper or even edible items turned out to be rather myopic and has totally disappeared. Hence no sentiment was build up around commodities and hence the demand remained restricted to the real consumption.

It further stated that with the erosion in price tags, the exports in value terms have dropped while in volume, the scenario is not that bad across sectors. India’s export basket comprises commodities, including engineering goods (mostly iron ore /steel and other metals), petroleum products, which have been hit in value terms. For the month of August, the exports of engineering goods were down 29 per cent and petroleum products by 47.88 per cent. However, the erosion is consumption demand, which is more disturbing is seen in leather goods, apparels, gems and jewellery. These products are not a commodity play and reflect the slowdown in consumption and pressure on the consuming economies. Both leather products saw a decline of close to 13 percent readymade garments 7.32 per cent in August. Gems and jewellery witnessed a modest gain of 2.66 per cent which is largely a play of changing gold prices.

The CNX Nifty is currently trading at 7967.85, down by 14.05 points or 0.18% after trading in a range of 7908.35 and 7978.75. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.96%, Power Grid up by 2.28%, Tata Power up by 1.79%, Maruti Suzuki up by 1.71% and Kotak Mahindra Bank up by 1.45%.

On the flip side, Bosch down by 1.73%, Asian Paints down by 1.58%, Reliance Industries down by 1.46%, Bharti Airtel down by 1.32% and Dr. Reddy’s Lab down by 1.27% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 163.9 points or 0.75% to 21,756.93, Taiwan Weighted decreased 155.1 points or 1.83% to 8,307.04, KOSPI Index decreased 31.27 points or 1.57% to 1,964.68, FTSE Bursa Malaysia KLCI decreased 29.13 points or 1.74% to 1,640.32, Jakarta Composite decreased 3.92 points or 0.09% to 4,376.40 and Straits Times decreased 1.78 points or 0.06% to 2,877.81.

On the other hand, Shanghai Composite increased 58.62 points or 1.89% to 3,156.54. Nikkei stock exchange was closed on account of ‘Respect for the Aged Day’ holiday.

The European markets were trading mostly in green; UK’s FTSE 100 increased 15.99 points or 0.26% to 6,120.10, France’s CAC increased 16.16 points or 0.36% to 4,552.01 while, Germany’s DAX decreased 78.5 points or 0.79% to 9,837.66.