Benchmarks continue to trade lower; Realty melt

Indian equity benchmarks continued the weak trend in afternoon session, on broad based selling with frontline gauges trading below their crucial 29,900 (Sensex) and 9,300 (Nifty) levels, suffering losses of over half a percent. Investors failed to get any sense of relief with the International Monetary Fund Managing Director’s statement that the Goods and Services Tax to be implemented from July 1 would help raise India’s medium-term growth to above eight per cent, as it will enhance production and the movement of goods and services across Indian states. Besides, depreciation in Indian rupee against the dollar too weighed down sentiments. Indian rupee was trading lower by 7 paise at 64.22 against the dollar at this point of time on sustained foreign fund outflows amid increased demand for the US currency from importers. In scrip specific development, BHEL was trading in green after commissioning a 3 MW Solar Photovoltaic (PV) Power Plant in the Union Territory of Dadra and Nagar Haveli.

On the global front, Asian markets were trading mostly in red, amid renewed jitters over North Korea and conflicting signals from President Donald Trump about U.S. trade policy. Back home, the BSE Sensex is currently trading at 29863.08, down by 166.66 points or 0.55% after trading in a range of 29848.21 and 30067.64. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.23%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Metal up by 2.21%, Basic Materials up by 0.60%, PSU up by 0.52%, Auto up by 0.38% and Consumer Disc. up by 0.28%, while Realty down by 1.60%, FMCG down by 1.02%, Telecom down by 0.91%, TECK down by 0.49% and Capital Goods down by 0.44% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.88%, ONGC up by 1.81%, Maruti Suzuki up by 1.47%, Asian Paints up by 1.05% and Coal India up by 0.96%. On the flip side, ITC down by 2.35%, HDFC down by 1.94%, HDFC Bank down by 1.81%, Bharti Airtel down by 1.55% and Larsen & Toubro down by 1.09% were the top losers.

Meanwhile, the auto makers association, Society of Indian Automobile Manufacturers (SIAM) has filed a petition in the Supreme Court pleading for a review of the judgement issued in the case of BS III Vehicles. SIAM said that the review petition has pointed out certain facts that were not covered in the Judgment, which go to the root of the matter and had influenced the Court to pass such an Order.

According to the industry association, the Supreme Court has erroneously construed an office memorandum from the Ministry of Road Transport and Highways dated March 3, 2017 to be an office memorandum dated March 3, 2015, i.e. two years earlier in holding that the government had sent a clear message to the manufacturers to stop production of BS-III vehicles before April 1, 2017. SIAM has said that according to the government assurance given three weeks before the judgment, the unsold stocks of BS-III vehicles manufactured before April 1 would be permitted to be sold and registered even after the deadline as was done when BS-II and BS-III norms were implemented. It also said that two-wheeler manufacturers and commercial vehicle makers were hit the hardest by the ruling.

In the review petition, SIAM highlighted that the staggered phase-in of BS IV emission norms for vehicles was not done to help the auto industry as mentioned in the judgment. It also pointed out that this staggering was done to ensure that adequate capacities for the BS IV fuel supply get established to expand the coverage of fuel availability to other parts of the country as per the roadmap agreed with the oil industry.

SIAM elaborated that the Supreme Court has further based its judgment on an assumption that there will be 80 per cent reduction in emissions of PM (particulate matter) between BS III and BS IV standards. Though, it noted that it may be true for only heavy vehicles, but such reduction is much less in other categories of vehicles. In its petition, SIAM also stated that the auto industry has invested Rs 25,000 crore to upgrade vehicle technologies to BS IV level and was therefore an equal contributor in ensuring the improvement in the environment.

The CNX Nifty is currently trading at 9287.95, down by 54.20 points or 0.58% after trading in a range of 9282.25 and 9342.65. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.90%, Aurobindo Pharma up by 2.34%, Bank of Baroda up by 2.32%, Bosch up by 2.23% and Tata Steel up by 2.05%. On the flip side, ITC down by 2.75%, Bharti Infratel down by 2.13%, Indian Oil Corp. down by 2.10%, BPCL down by 2.05% and HDFC Bank down by 1.91% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 79.04 points or 0.32% to 24,619.44, Nikkei 225 declined 55.13 points or 0.29% to 19,196.74, Jakarta Composite was down by 11.35 points or 0.2% to 5,695.68, KOSPI Index dipped 4.02 points or 0.18% to 2,205.44 and Shanghai Composite shed 1.08 points or 0.03% to 3,151.11.

On the flip side, FTSE Bursa Malaysia KLCI increased 0.15 points or 0.01% to 1,768.07 and Taiwan Weighted was up by 11.38 points or 0.12% to 9,872.00.