Benchmarks continue to trade in red in late morning session

After getting a gap down start, Indian benchmarks showed some strength in early morning trade, but the sentiments turned bearish once again in late morning trades on sustained foreign fund outflows and a weak trend in other Asian markets, tracking overnight losses in the US after oil sank to a seven-year low. Besides, absence of positive cues and weakness in Indian rupee also dampened the sentiment. The rupee was trading lower by 10 paise at 66.83 against the dollar in early trade on increased demand for the U.S. currency from importers. However, losses remained capped with ratings agency Fitch, while maintaining a stable outlook for India, stating that the country’s economy will grow by 7.5 percent in the current fiscal that will stand out globally, but warned that its business environment would remain weak despite improvements. Meanwhile, stocks of tyre-making companies like MRF and JK Tyre witnessed buying interest on the report that the government is looking at anti- dumping and anti-subsidy duty investigations on imports of bus and truck radial tyres from China to protect domestic manufacturers, Parliament was informed. On the other hand, shares of oil exploration and production (E&P) firms declined along with steep slide in global crude oil prices.

On the global front, Asian stock markets teetered near their weakest levels in three weeks on Tuesday, as a rout in oil prices knocked energy company shares lower and many investors moved to the sidelines ahead of next week’s meeting where the Federal Reserve is expected to raise US interest rates. Oil trades near the lowest level in more than six years amid speculation a global glut will persist with Opec having effectively abandoned its strategy of limiting output to control prices.  Back home, selling pressure was visible in Metal, PSU, Oil & Gas and Realty stocks. At the same time, some amount of buying was seen in auto, FMCG and IT stocks. In scrip specific development, shares of Infosys have surged after the report that the company will expand its operations in Ireland and intends to create 250 new jobs over the next three years. Furthermore, Ashok Leyland has gained after the company has resumed regular operations at its Ennore manufacturing plant near Chennai after production activity was halted at the facility due to heavy rains.

The market breadth on BSE was negative, out of 2465 stocks traded, 1083 stocks advanced, while 1248 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25466.94, down by 63.17 points or 0.25% after trading in a range of 25431.22 and 25542.47. There were 7 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in mix; the BSE Mid cap index was down by 0.12%, while Small cap index up by 0.01%.

The top gaining sectoral indices on the BSE were IT up by 0.87%, TECK up by 0.71%, FMCG up by 0.64% and Auto up by 0.44%, while Metal down by 1.80%, PSU down by 1.01%, Oil & Gas down by 0.97%, Realty down by 0.72% and Consumer Durables down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.37%, Infosys up by 1.21%, ITC up by 1.04%, Hindustan Unilever up by 0.50% and TCS up by 0.47%. On the flip side, Vedanta down by 2.63%, ONGC down by 2.59%, Coal India down by 2.24%, Dr. Reddys Lab down by 2.21% and Hindalco down by 2.21% were the top losers.

Meanwhile, NITI Aayog Vice Chairman Arvind Panagariya  while commenting on the passage of the Good and Services Tax (GST) bill has said that India is moving in the right direction on big ticket reforms and that he is hopeful about the passage of the GST bill during the Winter Session of Parliament.

Under this big ticket reform, central and state taxes will get included into GST, which will reduce the multiplicity of taxes, and thus bring down the compliance cost. With GST, the burden of Central Sales Tax (CST) will also be phased out. Panagariya said that GST will hopefully come into play and a lot of changes will happen.

Panagariya though urged the industry to improve their efficiencies rather than asking for tax reliefs to increase profitability. He further said that for achieving transformational economic growth, the industry would have to think big in terms of production, scale and efficacy to capture bigger markets domestically as well as abroad.

The NITI Aayog Vice Chairman while highlighting the meeting of the fiscal deficit target amid 7th Pay Commission report said that the government is committed and the pay panel report will not kick in for most of the current fiscal year.

The CNX Nifty is currently trading at 7751.95, down by 13.45 points or 0.17% after trading in a range of 7734.10 and 7771.25. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 2.26%, Tata Motors up by 1.34%, Infosys up by 1.22%, Zee Entertainment up by 1.07% and ITC up by 0.86%. On the flip side, Cairn India down by 3.13%, Vedanta down by 2.74%, ONGC down by 2.57%, Hindalco down by 2.33% and GAIL India down by 2.33% were the top losers.

Asian markets were trading in red, Hang Seng was down by 1.7%, Nikkei 225 decr down by 1.02%, Taiwan Weighted down by 1.2%, Shanghai Composite down by 1.35%, KOSPI Index down by 0.52%, Jakarta Composite down by 0.71% and FTSE Bursa Malaysia KLCI was down by 0.11%.