Markets at day’s low; Sensex slips below 28000 mark

Indian equity markets are trading near day’s low and both benchmark indices were witnessing a sharp selling across major heavy weights. Sensex slipped over 160 points, while Nifty holding the 8,600 level. Sentiments remained down-beat with the country’s weak macroeconomic data. Retail inflation shot up to nearly two-year high of 6.07 per cent in July, well above the Reserve Bank of India’s (RBI’s) comfortable level, on surge in prices of food items as the demand for sugar, oil & fats and spices rose ahead of the festival season. Besides, Industrial production data better than a growth rate of 1.1% in previous month but sharply below 4.2% a year ago showed a poor performance of manufacturing sector as also a heavy contraction in capital goods output.  However, global sentiments remained supportive as lackluster data on the world’s biggest economies fuels speculation that the global central banks will continue to support them with stimulus and loose monetary policy. Some support also came with Prime Minister Narendra Modi, vowing to keep inflation under control stating that he has tried to stay away from populism which the past regimes practiced to get recognition while 'emptying the exchequer'. Today’s session is more like stock-specific play, rather than sector-specific. Infosys have declined to its lowest level since December 9, 2015, after a key client Royal Bank of Scotland (RBS) scrapped a project to set up a separate bank in the United Kingdom, for which IT major was a key technology partner. Jet Airways India has slipped after the company reported a 53.47% decline in net profit for the June quarter, hit by higher operating expenses and lower sales. On the other hand, State Bank of India (SBI) has extended gains second consecutive day after state-owned banking major reported lower-than-expected rise in bad loans in the June quarter.

On the global front, Asian markets were trading mixed, supported by a jump in oil prices and investor expectations of an extended phase of easy monetary policy around the globe. However, Japanese stocks declined sharply as weakness in domestic demand-driven stocks offset gains in cyclicals such as exporters in a relatively quiet holiday-thinned market. Back home, stocks from Oil & Gas, Metal and Power counters were supporting the markets, while those from Consumer Durables, Realty and information technology (IT) counters were adding to the underlying cautious undertone.

The market breadth remained pessimistic as there were 989 shares on the gaining side against 1341 shares on the losing side, while 112 shares remained unchanged.

The BSE Sensex is currently trading at 27988.87, down by 163.53 points or 0.58% after trading in a range of 27983.92 and 28199.10. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mix; the BSE Mid cap index was up by 0.02%, while Small cap index down by 0.23%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.37%, Metal up by 0.23%, Power up by 0.23%, PSU up by 0.19% and Capital Goods up by 0.10%, while Consumer Durables down by 1.50%, Realty down by 1.38%, TECK down by 1.15%, IT down by 0.98% and Auto down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 4.62%, Cipla up by 2.25%, Power Grid up by 1.69%, ITC up by 0.61% and NTPC up by 0.56%. On the flip side, Tata Motors down by 1.82%, Axis Bank down by 1.65%, Reliance Industries down by 1.64%, HDFC down by 1.49% and Infosys down by 1.44% were the top losers.

Meanwhile, overseas Investments or outward foreign direct investments by the Indian firms in the month of July rose by 60.8% to $ 2.30 billion from $1.43 billion in the same month last fiscal. According to the RBI data, the overseas investments in the month of June 2016 were at $1.86 billion.

The total outward foreign direct investment of $2.30 billion was in the form of equity, loan and issue of guarantee. Of the total investment equity, loan and issue of guarantee stood at $916.07 million, $489.42 million and $892.93 million respectively in the month of July 2016, as compared to $336.38million, $211.38 million and $881.60 million respectively during July 2015. 

The major investors overseas during the month included Sanmar Group International, invested $ 962.23 million in a wholly owned unit in Switzerland, and New Delhi Television (NDTV) which invested $ 111.13 million in a UK-based wholly owned subsidiary. Vedanta and Vadinar Oil Terminal invested $ 610 million and $ 100 million respectively in their wholly-owned and joint venture firms in Mauritius.

The CNX Nifty is currently trading at 8624.25, down by 47.90 points or 0.55% after trading in a range of 8623.40 and 8682.35. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 4.30%, Hindalco up by 2.90%, Cipla up by 2.86%, BPCL up by 2.24% and Power Grid up by 1.66%. On the flip side, Bharti Infratel down by 5.35%, Aurobindo Pharma down by 2.31%, Tech Mahindra down by 2.30%, Grasim Industries down by 2.27% and Tata Motors down by 2.08% were the top losers.

Asian markets were trading mixed; Nikkei 225 declined 1.17%, Taiwan Weighted decreased 0.42%, Shanghai Composite shed 0.4% and Hang Seng was down by 0.06%. On the flip side, KOSPI Index rose 0.07%, FTSE Bursa Malaysia KLCI increased 0.5% and Jakarta Composite was up by 0.84%.