Indian equities continue lackluster trade; cautiousness grip investors’ minds

In an extremely range-bound session of trade, Indian equity benchmarks continued their lackluster trade in noon session, as investors remained cautious ahead of the derivatives expiry of the June series scheduled for tomorrow. Besides, negative trend in other Asian markets after Wall Street was knocked hard in the wake of a delay to a US healthcare reform vote, also impacted the sentiments. Trading sentiments weakened further after global credit rating agency Fitch maintained its negative outlook on Indian banks because of erosion of the sector’s core capitalization, even as they enter the final phase of Basel III migration. This is based on its assessment that the sector’s core capitalization, which has been eroded in the last few years, will remain challenged unless it is boosted by adequate capital support from the authorities or equity raising from capital markets. Some weakness also came with Finance Minister Arun Jaitley’s statement that people may have to face some difficulty initially during the Goods and Services Tax (GST) is rolled out, but in the long run the new indirect tax regime would help cut tax evasion and check price rise. He also said that the GST Council will look at bringing real estate within the GST net by next year and revisit taxing of petroleum products under the new regime in 1-2 years.

On the global front, Asian markets were trading mostly lower on Wednesday, tailing the overnight weakness in the US bourses. The benchmark S&P 500 posted its biggest one-day drop in about six weeks and closed at its lowest point since May 31, after the US Senate's move to delay voting on a healthcare reform bill rekindled worries on the timeline for President Donald Trump's business-friendly policies. In her first public appearance since the US Federal Reserve hiked rates on June 14, Fed Chair Janet Yellen reiterated that the US central bank would continue to raise interest rates only gradually and she does not believe that there will be another financial crisis for at least as long as she lives, thanks largely to reforms of the banking system since the 2007-09 crash. Meanwhile, Chinese markets remain in focus after the yuan surged both onshore and overseas on Tuesday amid speculation of central bank intervention. 

Back home, stocks from Metal, Realty and Power counters were supporting the markets’ uptrend, while those from Consumer Durables, Energy and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, Steel Strips Wheels (SSWL) gained after the company bagged yet another exports order for supply of steel wheels for EU Caravan & Canadian Winter market. Moreover, Bharat Heavy Electricals (BHEL) gained after the company secured an order for setting up a 15 MW Solar Photovoltaic (SPV) power plant on Engineering, Procurement and Construction (EPC) basis, in Gujarat.

The market breadth remained optimistic, as there were 1080 shares on the gaining side against 989 shares on the losing side, while 117 shares remained unchanged.

The BSE Sensex is currently trading at 30946.16, down by 12.09 points or 0.04% after trading in a range of 30876.25 and 31000.48. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.37%.

The top gaining sectoral indices on the BSE were Metal up by 1.39%, Realty up by 0.88%, Power up by 0.82%, Utilities up by 0.81% and Basic Materials up by 0.74%, while Consumer Durables down by 0.96%, Energy down by 0.50%, FMCG down by 0.16% and Telecom down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.96%, Maruti Suzuki up by 1.69%, ICICI Bank up by 1.53%, Power Grid up by 1.32% and Tata Motors up by 0.80%. On the flip side, Asian Paints down by 2.25%, Reliance Industries down by 1.62%, SBI down by 1.40%, HDFC down by 0.76% and Dr. Reddys Lab down by 0.47% were the top losers.

Meanwhile, Union Minister of Shipping and Road Transport and Highways Nitin Gadkari has said that the government is working on a cruise tourism policy which will be announced next month with an intent to tap India’s vast potential on this front and attract more vessels. He also asserted that at present, India attracts nearly 70 cruise vessels a year and the number is expected to go up 10-fold to 700 with this initiative. He also expressed his hopes that next year is going to be very good for cruise tourism in India.

Gadkari has said that the action plan will be ready in the next three months that includes key steps on par with international standards, simplification of procedures, easy immigration and ways to make India a global hotspot. He also said that steps are already being undertaken to boost infrastructure that include building cruise terminals at five major ports --Mumbai, Goa, New Mangalore, Chennai and Cochin. In addition, he disclosed that modern cruise terminals being developed at ports will include hospitality, retail, shopping and restaurants, adding that about 200 minor ports will develop jetties for such cruise vessels. He explained that cruise tourism is a great means for bringing foreign exchange from overseas travellers to India. He added that cruise tourists contribute handsomely to local economies and has the potential to be a driver of growth for the areas touched by it.

Listing out various policy initiatives for promoting cruise shipping, the Minister said that ships are now allowed to stay for 3 days, up from the earlier 24 hours, and rules have been simplified to attract more vessels. He also said that easier standard operating procedure (SOP) for cruise operations involving multiple agencies has already been issued. Apart from this, he noted that the government has allowed foreign flag vessels carrying passengers to call at Indian ports without securing a licence from the director general of shipping till February 5, 2024.

The CNX Nifty is currently trading at 9513.40, up by 2 points or 0.02% after trading in a range of 9479.80 and 9522.50. There were 30 stocks advancing against 20 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Ultratech Cement up by 2.08%, Tata Steel up by 1.98%, Tech Mahindra up by 1.97%, Yes Bank up by 1.80% and Maruti Suzuki up by 1.67%. On the flip side, Asian Paints down by 2.36%, Reliance Industries down by 1.72%, SBI down by 1.43%, Zee Entertainment down by 1.39% and Indusind Bank down by 1.35% were the top losers.

Asian markets were trading mostly in red, Taiwan Weighted declined 1.16%, Hang Seng shed 0.49%, Nikkei 225 decreased 0.57%, KOSPI Index slipped 0.32% and FTSE Bursa Malaysia KLCI was down by 0.31%. On the flip side, Shanghai Composite was up by 0.01%.