Weakness persist in local markets; Nifty continues trading below 8,600 mark

Indian equity markets continued trading in negative territory amid sustained selling across the board ahead of GST debate in Rajya Sabha. The 30-share BSE benchmark was down 232.95 points, while Nifty continued to trade below the 8,600 mark. Beides, the broader indices also witnessed a sharp selloff, with the BSE mid-cap index slipping 1.26 percent and the BSE small-cap index losing 0.89 percent. Sentiments remained down-beat with a private report stating that consumer confidence in India declined in the second quarter this year with concerns over fuel prices and rising inflation, making the country lose the top position it occupied for the last two years as the most confident globally, adding some pessimism on the street. Besides, weak Asian cues also influenced investors sentiments.

Meanwhile, some buying was observed in Metal counters on the report that India is expected to impose an anti-dumping duty of up to $557 per tonne on imports of certain steel products from six countries, including China, Japan and Korea.  However, banking stocks remained under pressure on the global rating agency S&P’s report that banks in India and China will continue to face pressures on their asset quality, profitability, and capitalization over the next 12-24 months.  Meanwhile, shares of companies in the logistics sector were trading mixed ahead of the Goods and Services Tax (GST) Bill that is likely to be tabled in Rajya Sabha today.

On the global front, Asian markets fell for second straight day on Wednesday, with Japanese shares leading losses after the yen gained on disappointment over Prime Minister Shinzo Abe’s stimulus steps. Back home, barring Metal index which gained 0.26%, all the other indices were in the negative, with FMCG, Power and Realty indices being significant losers. In scrip specific development, Torrent Power declined after the company reported nearly 80% y-o-y drop in consolidated net profit at Rs 46.52 crore for the quarter ended June 2016. On the other hand, HCL Technologies rallied after the company reported a better than expected 6.3% quarter-on-quarter (QoQ) growth in consolidated net profit at Rs 2,047 crore for the quarter ended June 2016.

The market breadth remained pessimistic as there were 692 shares on the gaining side against 1702 shares on the losing side, while 104 shares remained unchanged.

The BSE Sensex is currently trading at 27748.76, down by 232.95 points or 0.83% after trading in a range of 27733.69 and 28015.43. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.26%, while Small cap index was down by 0.89%.

The only gaining sectoral index on the BSE was Metal up by 0.26%, while FMCG down by 1.78%, Power down by 1.17%, Realty down by 1.16%, Consumer Durables down by 1.03%, Auto down by 0.96% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.37%, Asian Paints up by 1.19%, Coal India up by 0.63%, Hero MotoCorp up by 0.61% and Wipro up by 0.44%. On the flip side, ITC down by 2.57%, Power Grid down by 2.04%, Maruti Suzuki down by 1.92%, Tata Motors down by 1.87% and Reliance Industries down by 1.46% were the top losers.

Meanwhile, the government is targeting to construct 50,000 new rural roads at the rate of 133 km a day and with an investment of Rs 33,000 crore, it will also use technology to identify roads which can be developed under the Pradhan Mantri Gram Sadak Yojana (PMGSY). Rural Development Minister Narendra Singh Tomar has said that the pace of construction of rural roads was 100 km per day between 2014-2016 compared to an average of 73 km during 2007-14 and now the government is planning to increase the pace to 133 km/day.

The minister further said that the Centre has launched a mobile app ‘Meri Sadak’ in which a person can lodge a complaint for roads being developed under the PMGSY and it would respond to the complaint within 7 days. He said Centre gives funds to the states under the scheme which in turn transfers to respective districts and added that the Centre releases the fund without any delay as and when request for funds is received from the state.

He further said that the government has created a robust monitoring mechanism to look into the progress of rural road construction under the Yojana, he added that four states-Haryana, Punjab, Gujarat and Karnataka-have utilised the funds in the first phase of PMGSY and the Rural Development Ministry will act and money would be recovered from the states which are found lacking in implementation. PMGSY was introduced in the year 2000 by the then Prime Minister Atal Bihari Vajpayee and roads have been constructed to connect villages with roads at a fast pace, which has ushered in progress.

The CNX Nifty is currently trading at 8562.75, down by 60.15 points or 0.70% after trading in a range of 8555.45 and 8635.45. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 3.61%, Bharti Infratel up by 2.06%, Cipla up by 1.40%, Asian Paints up by 1.22% and Idea Cellular up by 0.91%. On the flip side, ITC down by 2.76%, Power Grid down by 2.15%, BHEL down by 2.02%, Aurobindo Pharma down by 1.88% and Tata Motors down by 1.79% were the top losers.

Asian markets were trading mostly in red; Hang Seng slipped 1.64%, Nikkei 225 declined 1.58%, Taiwan Weighted decreased 0.74%, KOSPI Index lost 0.93%, FTSE Bursa Malaysia declined 0.53% and Jakarta Composite was down by 0.13%. On the other hand, Shanghai Composite was up by 0.24%.