Indian benchmarks end a disappointing day with over half a percent cut

Indian equity markets concluded the fresh week on a depressing note, tracking weak global cues as US President Donald Trump's failure on healthcare reform, raised questions about his ability to push through tax cuts and fiscal spending to boost the economy. The focus also remains on Brexit-related events ahead of the British government's planned triggering of Article 50 this week. On the domestic front, sentiments were undermined by Skymet Weather prediction that monsoon 2017 would be below normal with error margin of plus and minus 5%. Between June and September, which is the monsoon season in India, rainfall is forecast to be at 95% of the long period average of 887 mm. About 70% of India’s rainfall happens in this period and irrigates almost half of India’s farmland, being of particular importance for Kharif crops. There is a fifty percent chance of an El Nino developing in the second half of the monsoon season, which translates into deficit rainfall in the months of July. Although expectations about roll out of the Goods and Services Tax from July 1, 2017 appear to be limiting the market's downside, the mood is quite cautious with investors looking ahead to the reporting season that is just a few sessions away. Meanwhile, aviation stocks gained traction after the report that India has become the third largest aviation market in terms of domestic passenger traffic. India’s domestic air passenger traffic stood at 100 million in 2016 and was behind only the US (719 million) and China (436 million). Further, PSU Bank gained as Finance Minister Arun Jaitley last week said that the government, in tandem with the RBI, is working on a radical proposal to resolve the issue of bad loans in the banking system.

On the global front, Asian equity markets ended mostly lower on Monday as cautiousness prevailed among investors with lingering doubts about the future policy agenda of the new U.S. administration following the health care reform failure. President Donald Trump suffered a stunning political setback in a Congress controlled by his own party when Republican leaders pulled legislation to overhaul the US healthcare system, a major 2016 election campaign promise of the president and his allies. Further, Japan's Nikkei edged lower as the yen rebounded in the face of renewed US dollar weakness. In South Korea, the Kospi declined after South Korean prosecutors said they will seek a detention warrant for ousted President Park Geun-hye, who has been accused of taking bribes from big businesses.  Meanwhile, European shares fell in early deals, hit by losses among miners and banks.

Back home, the local benchmarks got off to a somber opening as pessimistic sentiments prevailed across Asian markets. The selling pressure accentuated in the noon trades as investors took to across the board risk aversion post weak opening of European markets. However, late short covering in blue-chip stocks ensured that local bourses go home with relatively small losses. Finally, the NSE’s 50-share broadly followed index - Nifty plunged by over half a percent to settle below the crucial 9,050 support level, while Bombay Stock Exchange’s Sensitive Index - Sensex took a triple digit cut and closed below the psychological 29,250 mark. On the BSE sectoral front, the Metal pocket bore the maximum brunt of selling pressure as it got thrashed by about three percent, followed by Energy index, which too went home with hefty losses of over 1.5%. On the other hand, the Consumer Durables pocket remained the top gainer in the space with over a percent gain. The Power and FMCG pockets too managed a close in positive territory with moderate gains. The market breadth remained pessimistic, as there were 1158 shares on the gaining side against 1630 shares on the losing side, while 231 shares remained unchanged.

Finally, the BSE Sensex decreased 184.25 points or 0.63% to 29,237.15, while the CNX Nifty was down by 62.80 points or 0.69% to 9,045.20. 

The BSE Sensex touched a high and a low of 2703.21 and 2670.54, respectively and there were 5 stocks on gainers side as against 25 stocks on the losers side on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.27%, while Small cap index was down by 0.04%.

The sole gaining sectoral index on the BSE was Consumer Durables up by 0.88%, while Metal down by 2.56%, Energy down by 1.64%, Oil & Gas down by 1.02%, Telecom down by 0.91% and Healthcare was down by 0.83% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.20%, Power Grid up by 0.88%, HDFC up by 0.87%, Dr. Reddys Lab up by 0.59% and ITC up by 0.30%. On the flip side, Tata Steel down by 3.15%, Reliance Industries down by 2.76%, Asian Paints down by 2.07%, Coal India down by 2.06% and Wipro down by 1.77% were the top losers.

Meanwhile, with an aim to protect domestic players and give a fillip to the sector, the government may impose an anti-circumvention duty on certain stainless steel products originating from seven destinations- China, Korea, EU, South Africa, Taiwan, Thailand and the US. 

The government has resumed the investigations into circumvention of anti-dumping duties on cold-rolled flat products of stainless steel widths from 600 mm to 1,250 mm after the stay order was vacated by a court on March 8, 2017. The probe was initiated in February, 2016 by the Directorate General of Anti-Dumping and Allied Duties (DGAD), under the Commerce Ministry, on a complaint by Jindal Stainless, but it was stayed on April 27, 2016, by the Delhi High Court.

The DGAD in its earlier notification had stated that it has sufficient evidence of circumvention of anti-dumping duties leviable on cold-rolled flat products of stainless steel originating from these seven destinations. The probe would determine the existence, degree and effect of the alleged circumvention as well as examine the need to extend the existing anti-dumping duty to the circumventing products. It was alleged that the existing anti-dumping measures imposed in 2010, and amended later, are being circumvented.

The CNX Nifty traded in a range of 9,094.85 and 9,024.65. There were 12 stocks in green as against 39 stocks in red on the index.

The top gainers on Nifty were Bank of Baroda up by 1.69%, Bharti Infratel up by 1.56%, Indusind Bank up by 1.11%, Power Grid up by 1.06% and HDFC up by 0.98%. On the flip side, Idea Cellular down by 3.63%, Tata Steel down by 3.51%, Hindalco down by 3.44%, Reliance Industries down by 2.97% and HCL Tech down by 2.45% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 49.76 points or 0.68% to 7,287.06, Germany’s DAX decreased 90.97 points or 0.75% to 11,973.30 and France’s CAC decreased 18.15 points or 0.36% to 5,002.75.

Asian equity markets ended in red on Monday amid rising doubts over US President Donald Trump's ability to pass legislative reforms after Republican leaders pulled a bill to overhaul the US health care system. Japanese shares ended lower, wallowing at a six-week low and deepening last week's 1.3 percent loss, on pressure from a resurgent yen. Further, Chinese shares fell despite solid data from the National Bureau of Statistics showing that China's industrial profits grew sharply in the first two months of the year, driven by faster rise in prices of coal, steel and crude oil. Industrial profits surged an annual 31.5 percent in the January to February period, accelerating from a 2.3 percent gain in December.