Markets trade marginally in red, 13 month high manufacturing PMI fails to entice

Indian markets despite a choppy trade were hovering near the neutral line in the late morning session, while some weak economic data was weighing down the sentiments; traders were unable to get any support with report that manufacturing output in India grew at its fastest pace in thirteen months in August. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers Index edged higher in August, at 52.6 compared with 51.8 in July. All eyes were on the Reliance Industries AGM where the chairman Mukesh Ambani formally launched RJio, dedicating it to Prime Minister Narendra Modi’s Digital India initiative, Ambani emphasised on affordability of data connection. Back to street, there was not much happening amid weak global cues but some drag in sectors like technology, realty and healthcare was putting the market gains in check, above all it was sharp fall in the telecom stocks after the launch of RJio that was weighing down the sentiments.

The BSE Sensex is currently trading at 28421.16, down by 31.01 points or 0.11% after trading in a range of 28416.54 and 28542.72. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices too were trading in red; the BSE Mid cap index was down by 0.10%, while Small cap index was tad lower by 0.01%.

The top gaining sectoral indices on the BSE were Auto up by 0.61%, Consumer Durables up by 0.48%, Bankex up by 0.15% and FMCG up by 0.08%, while Realty down by 1.14%, TECK down by 1.10%, Capital Goods down by 0.44%, IT down by 0.31% and Metal down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.32%, ICICI Bank up by 1.46%, Tata Motors up by 1.21%, Coal India up by 0.88% and Mahindra & Mahindra up by 0.83%. On the flip side, Bharti Airtel down by 7.83%, Wipro down by 1.51%, Asian Paints down by 0.97%, HDFC Bank down by 0.79% and Sun Pharma Inds. down by 0.79% were the top losers.

Meanwhile, the government has given its approval for creation of a project development fund (PDF) with a corpus of Rs 500 crore for catalysing Indian economic presence in CLMV nations - Cambodia, Laos, Myanmar and Vietnam, which have a unique position in the regional value chains and offer a gateway for market access to China, European Union (EU) and other markets due to various trade agreements.

Despite plenty of opportunities in the CLMV region, Indian businesses in these countries so far have been slim due to limited information, infrastructure and other contingent risks, the new fund will benefit India’s industrial community for business expansion and maintaining cost competitive supply chains besides integrating with global production networks.

The PDF will be housed in the Department of Commerce and Exim Bank will operate the fund. The PDF shall be governed by an Inter-Ministerial Committee under the chairpersonship of the Commerce Secretary. The fund could be used to carry out a variety of activities including feasibility studies, acquiring land or getting clearances. India will have the advantage in the regional value chain by securing a dedicated market for domestic raw materials and intermediate goods on a long term basis. The regional access will also help India with availability of inputs and raw materials for Indian industry.

The CLMV nations, as part of the ten-member ASEAN region, has a number of FTAs with countries such as China, the EU, Japan, South Korea, New Zealand and Australia. Once Indian investments are made in these countries, the investors can have access to the markets of their FTA partners on preferential terms.

The CNX Nifty is currently trading at 8772.90, down by 13.30 points or 0.15% after trading in a range of 8770.60 and 8811.75. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.40%, ICICI Bank up by 1.36%, Tata Motors up by 1.18%, Coal India up by 1.05% and Mahindra & Mahindra up by 0.97%. On the flip side, Idea Cellular down by 7.87%, Bharti Airtel down by 7.43%, BPCL down by 2.57%, Wipro down by 1.80% and Bharti Infratel down by 1.77% were the top losers.

The Asian markets were mostly in red, barring Nikkei 225 which was up by 39.44 points or 0.23% to 16,926.84 and Hang Seng gaining 178.11 points or 0.78% to 23,154.99

On the other hand, Taiwan Weighted declined by 67.7 points or 0.75% to 9,001.15, Jakarta Composite down by 50.4 points or 0.94% to 5,335.68, FTSE Bursa Malaysia KLCI decreased 6.16 points or 0.37% to 1,671.90, Shanghai Composite was down by 4.52 points or 0.15% to 3,080.97 and KOSPI Index was lower by 2.75 points or 0.14% to 2,031.90.