Benchmarks extend losses in late morning session

Indian equity benchmarks extended losses in late morning session, as concerns about President Donald Trump’s FBI controversy weighed on global sentiments. Investors remained on sidelines ahead of two-day GST Council meet beginning in Srinagar, which will see participation from 29 states and union territories, along with Jaitley, and senior officials from the revenue department. In the meeting Finance Ministry Arun Jaitley is likely to finalize the rates that various goods and services will attract from July 1. Meanwhile, Commerce and Industry Minister Nirmala Sitharaman said that India’s exports have been increasing despite global headwinds and efforts are being made to neutralize any impact on them due to implementation of GST. She added that the government will come out with amendments to the foreign trade policy to align it with the Goods and Services Tax (GST), which is scheduled to be rolled out from July 1. Traders were seen piling position in IT and Telecom stocks, while selling was witnessed in Realty, Industrials and Capital Goods stocks. Banking sector was reeling under pressure after domestic rating agency India Ratings and Research report highlighted that the banking system has Rs 7.7 trillion of unrecognized stressed loans in corporate and SME sector and around 35 per cent of that could slip into the NPA category in the next 12-18 months. It pegs stressed corporate and SME debt at 22 per cent of total bank credit.

Select pharma companies were trading under pressure as the drug price regulator NPPA has initiated action against various firms, including Abbott Healthcare, Zydus Cadila and Dr Reddy’s, for non-compliance with provisions for new drugs under the price control regime. In a notification issued, the National Pharmaceutical Pricing Authority (NPPA) said that various companies have launched formulations by altering a scheduled formulation with strength dosage other than as specified in the Drugs Price Control Order (DPCO) 2013. In scrip specific development, Indian Overseas Bank was trading in red on reporting loss of Rs 646.66 crore in Q4. The bank’s net loss narrowed due to reduction in provisions for bad loans. The bank had registered a net loss of Rs 936.19 crore in the same quarter of previous fiscal. United Breweries was under pressure after the liquor firm reported a significant fall in standalone net profit to Rs 6.73 crore during the fourth quarter of 2016-17 fiscal on higher expenses. It had posted a net profit of 52.37 crore in the same quarter of previous fiscal.

On the global front, Asian shares were trading mostly in red, in line with global peers, and the dollar nursed deep losses against the yen as uncertainty mounted over US President Donald Trump’s future following reports that he tried to interfere with a federal investigation. The home prices in China rose by 0.7% in April, barely faster than the 0.6% increase in March, following tougher curbs aimed at driving speculators out of what had been a red hot market. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 9,500 and 30,500 levels respectively. The market breadth on BSE was negative in the ratio of 559:1652, while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 30483.57, down by 175.20 points or 0.57% after trading in a range of 30436.56 and 30567.82. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.28%, while Small cap index was down by 1.12%.

The only gaining sectoral indices on the BSE were IT up by 1.12% and TECK up by 0.80%, while Realty down by 2.37%, Industrials down by 1.62%, Capital Goods down by 1.62%, Basic Materials down by 1.54% and Metal down by 1.41% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.52%, TCS up by 2.07%, Infosys up by 0.72%, Lupin up by 0.51% and Coal India up by 0.18%.

On the flip side, Tata Motors down by 2.03%, Larsen & Toubro down by 1.67%, Axis Bank down by 1.43%, ICICI Bank down by 1.21% and Hero MotoCorp down by 1.15% were the top losers.

Meanwhile, Commerce and Industry Minister Nirmala Sitharaman has said that exports growth rate in India have been increasing despite adverse global circumstances and headwinds and added that efforts are being made to offset any impact on domestic exports due to rollout of Goods and Services Tax (GST) regime. She also said that the government will come out with amendments to the foreign trade policy (FTP) to align it with the new tax regime, which is to be rolled out from July 1.

The minister said that since September last year, Indian exports are consistently going up. She said “I can see this as a clear indicator that our exporters are performing against all odds and showing their capacity to withstand any headwinds and the global situation.” She also expressed her hopes that the country would achieve the target of doubling India’s exports to $900 billion by 2020.

Sitharaman said that global situation has not improved drastically and pointed out that even if there are green shoots that people are seeing and saying that there are prospects that world trade might improve, it is yet to be significantly felt by others. She noted that even in this type of environment, Indian exporters are doing well. In the financial year 2016-17, while Indian merchandise shipments aggregated at $275 billion, services exports grew by 3.4 per cent to $160.68 billion.

The CNX Nifty is currently trading at 9456.85, down by 68.90 points or 0.72% after trading in a range of 9448.75 and 9489.10. There were 8 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.10%, Wipro up by 1.92%, Tech Mahindra up by 1.65%, Infosys up by 0.65% and Lupin up by 0.58%.

On the flip side, Hindalco down by 2.74%, Yes Bank down by 2.37%, Eicher Motors down by 2.06%, Ultratech Cement down by 2.02% and Tata Motors down by 1.91% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 296.91 points or 1.5% to 19,517.97, Hang Seng decreased 72.63 points or 0.29% to 25,221.00, Taiwan Weighted decreased 61.14 points or 0.61% to 9,952.53, Shanghai Composite decreased 10.93 points or 0.35% to 3,093.51, FTSE Bursa Malaysia KLCI decreased 9.64 points or 0.54% to 1,766.01 and KOSPI Index decreased 9.25 points or 0.4% to 2,283.83.

On the other hand, Jakarta Composite increased 13.45 points or 0.24% to 5,628.94.