Benchmarks make sluggish start on weak global cues

Pressurized by weak global cues, Indian equity markets have made a sluggish start and are trading with a cut of around half a percent, breaching their crucial 28,600 (Sensex) and 8,800 (Nifty) levels. Traders also remained on sidelines ahead of F&O expiry on Thursday this week. Traders failed to get any sense of relief with Reserve Bank of India’s Governor, Urjit Patel downplaying the risk of inflation and harping on the focus on growth. Patel reportedly said that the GST regime would not harden inflation and the growth objective will remain part of the newly constituted MPC's mandate. Traders also shrugged off Niti Aayog Vice-Chairman Arvind Panagariya’s statement that a good monsoon, reforms and timely decision making at the Centre will definitely push India’s growth beyond the 8 per cent mark in subsequent quarters of this fiscal.

On the global front, US markets ended lower on Friday and all the Asian counters were trading in red at this point of time, as investors’ attention turned from central banks to American politics ahead of the first US presidential debate. Back home, foreign portfolio investors (FPIs) sold shares worth a net Rs 299.98 crore on Friday as per provisional data released by the stock exchanges. The broader indices were out-performing benchmarks and the market breadth remained in favor of advances, as there were 1,054 shares on the gaining side against 856 shares on the losing side while 108 shares remain unchanged.

The BSE Sensex is currently trading at 28553.72, down by 114.50 points or 0.40% after trading in a range of 28505.98 and 28630.92. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.07%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Energy up by 0.79%, Metal up by 0.55%, Capital Goods up by 0.51%, Power up by 0.23% and Oil & Gas up by 0.14%, while Bankex down by 0.81%, Finance down by 0.64%, Telecom down by 0.46%, FMCG down by 0.42% and Auto down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.50%, Power Grid up by 1.25%, Tata Steel up by 0.94%, Larsen & Toubro up by 0.88% and Dr. Reddys Lab up by 0.81%. On the flip side, ICICI Bank down by 1.99%, HDFC down by 1.28%, GAIL India down by 1.24%, ITC down by 1.14% and Adani Ports &Special down by 0.96% were the top losers.

Meanwhile, Niti Aayog Vice-Chairman Arvind Panagariya has expressed his confidence that good monsoon, policy reforms and timely decision making at Centre will definitely push India’s growth beyond 8% mark in subsequent quarters of this fiscal. Panagariya further elaborated that “This will happen because there will be impact of reforms also (besides a good monsoon). We still have not seen (the impact of reforms). There were serious governance issues earlier. Projects were stuck. The decisions were not taken at the Centre.”

He admitted that the 7.1 per cent is a slight dampener in the first quarter, he said, “It was slightly lower than my expectations. First quarter data did not have any impact of the good monsoon this year.” He said that the impact of reforms has not seen yet, also there were serious governance issues earlier thus projects were stuck and the decisions were not taken at the Centre. He expressed confidence that Gross Domestic Product (GDP) number will be over 8% mark in subsequent quarters of this fiscal, as there will be impact of reforms with good monsoon.

India's growth rate fell to a 6 quarter low of 7.1% in April-June quarter due to subdued performance of mining, construction and farm sectors. In same quarter previous year economy expanded by 7.5%. In January-March quarter of 2016 the figure was 7.9%.

Further he said that India's foodgrain output is estimated to rise by 9% to an all-time high of 135.03 million tonnes (MT) in the kharif season (summer sown) of 2016-17 on record output of rice and pulses following bountiful rains. Foodgrain production stood at 124.01 MT in the kharif season of 2015-16 crop year (July-June). Higher output of pulses will also help soften retail prices, which have remained a sticking point. The country's overall foodgrain production had fallen to around 252 MT level in each of the previous two full crop years, including kharif and rabi due to two consecutive years of drought.

The CNX Nifty is currently trading at 8794.85, down by 36.70 points or 0.42% after trading in a range of 8780.70 and 8809.55. There were 14 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.56%, Power Grid up by 1.14%, Coal India up by 0.87%, Dr. Reddys Lab up by 0.75% and Tata Steel up by 0.74%. On the flip side, ICICI Bank down by 1.86%, HDFC down by 1.29%, GAIL India down by 1.26%, ACC down by 1.18% and Kotak Mahindra Bank down by 1.13% were the top losers.

Asian markets were trading in red; Hang Seng decreased 159.78 points or 0.67% to 23,526.70, Nikkei 225 fell 140.77 points or 0.84% to 16,613.25, Taiwan Weighted declined 74.68 points or 0.8% to 9,209.94, Jakarta Composite shed 31.13 points or 0.58% to 5,357.78, Shanghai Composite dropped 21.56 points or 0.71% to 3,012.34, KOSPI Index slipped 7.42 points or 0.36% to 2,046.65 and FTSE Bursa Malaysia KLCI was down by 2.45 points or 0.15% to 1,668.54.