Indian equity markets trade lower amid weak global cues

Markets have made a flat start but are now trading in red with marginal losses in early deals on Monday. The session was proving harrowing for broader indices, which are trading with losses in the range of 1.40-2.50%. Weakness in global markets weighed on the sentiments as oil continued its slide. Further, the sentiments were under pressure on report that India’s Services exports fell by 3.8 per cent year-on-year to $ 12.01 billion in November 2015. Foreign institutional investors continue to remain sellers in equities with net sales of Rs 1,124 crore on Friday, as per provisional stock exchange data that kept pressurizing the markets. On the sectoral front, most of the sectoral indices on BSE were trading in red, with prominent losers being the stocks from Capital Goods, Realty, Consumer Durables and Auto. On the flip side, stocks from IT and TECK counters were the only gainers.

In the scrip specific development, Oberoi Realty surged 6% on the BSE after the company reported 164% year-on-year (YoY) jump in consolidated net profit at Rs 209 crore for the quarter ended December 2015 driven by robust sales.

On the global front, US markets closed lower on Friday extending its worst start to a year on record, as the major indices were besieged by further declines in oil, continued signals of weakening growth in China. Asian markets were trading in red amid increased risk aversion as weak U.S. economic data, the slowdown in China and the fall in crude oil prices to below $30 a barrel for the first time since late 2003 stoked concerns about the global economy.

Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,450 and 24,450 levels respectively. The market breadth on BSE was negative in the ratio of 216: 1642 while 64 scrips remained unchanged.

The BSE Sensex is currently trading at 24410.14, down by 44.90 points or 0.18% after trading in a range of 24348.80 and 24524.85. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.43%, while Small cap index lost 2.51%.

The gaining sectoral indices on the BSE were IT up by 0.59% and TECK up by 0.25%, while Capital Goods down by 2.14%, Realty down by 1.72%, Consumer Durables down by 1.12%, Auto down by 1.12% and PSU down by 0.83% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.28%, NTPC up by 0.95%, Coal India up by 0.91%, Sun Pharma Inds. up by 0.72% and Axis Bank up by 0.63%. On the flip side, Adani Ports &Special down by 2.91%, ONGC down by 2.87%, Cipla down by 2.65%, Bajaj Auto down by 2.51% and Bharti Airtel down by 2.09% were the top losers.

Meanwhile, amid the worries of continuous slide in rupee, the industry body Assocham in its latest paper has said that India should allow its currency to slide while the RBI should use ample foreign exchange reserves to defend the currency only if there is a rout situation. However, there is a distinct possibility that rupee could actually strengthen over the medium term.

Assocham said that any depreciation in rupee on account of China-led turmoil in the global financial markets should only be welcome sign for India, or else Indian exports will suffer more at the hands of China and other emerging countries witnessing correction in their currencies.

The industry body said that India must also ensure that Indian exports need to get back their competitiveness even in the midst of global slowdown. The major challenge is coming from China in various forms with sizeable influence on the currency valuation. The paper further highlighted that Yuan devaluation, third in the last five months, will negatively impact Indian firms which have export exposure to China in sectors such as tyres, pharmaceuticals, steel and organic chemicals textiles due to a volatile change in terms of trade. “The impact of this devaluation will depend on the time horizon....However, the short-term impact can be negative in some sectors which also include capital goods among others,' the ASSOCHAM paper on 'Implications of Devaluation of Chinese Yuan’ noted.

It said that the devaluation will make Indian exports expensive to the neighbouring country, affecting the competitiveness. Even in a third country market, the currency devaluation in China can make things difficult for Indian goods since the rupee depreciation has not been sharp enough to give competitive edge to the country's exporters. The CNX Nifty is currently trading at 7422.50, down by 15.30 points or 0.21% after trading in a range of 7405.80 and 7463.65. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 1.78%, HCL Tech. up by 1.58%, Infosys up by 1.28%, NTPC up by 1.06% and Coal India up by 0.83%. On the flip side, Cairn India down by 4.18%, Adani Ports &Special down by 3.00%, Cipla down by 2.96%, ONGC down by 2.87% and PNB down by 2.28% were the top loser

Asian markets were trading in red, Nikkei 225 decreased 333.01 points or 1.94% to 16,814.10, Hang Seng decreased 284.16 points or 1.46% to 19,236.61, Taiwan Weighted decreased 38.57 points or 0.5% to 7,723.44, Jakarta Composite decreased 38.02 points or 0.84% to 4,485.96, Shanghai Composite decreased 14.12 points or 0.49% to 2,886.85, FTSE Bursa Malaysia KLCI decreased 13.85 points or 0.85% to 1,614.70 and KOSPI Index decreased 3.1 points or 0.16% to 1,875.77.