Key benchmark indices trade with modest losses

Key benchmark indices were trading with small losses in the afternoon deals, due to selling in realty, telecom, auto, consumer durables and Utilities stocks. Sentiments remained dampened as fear of uncertainty over the implementation of the Goods and Services Tax (GST) has cast its shadow on manufacturing activities as growth in the sector fell to a four-month low in June, showed the widely-tracked Nikkei purchasing managers' index (PMI). The PMI dropped to 50.9 in June from 51.6 the previous month, as a softer rise in new orders resulted in weaker growth in production. Besides, weak trend in Asian markets due to a missile launch by North Korea, too affected the market sentiments. However, downside remained capped as some support came with reports that India has told the World Bank that it has improved processes for granting construction permits sufficiently to pip the current topper, New Zealand, in the next edition of the Doing Business report. India was ranked 185 among 190 nations surveyed on the parameter of getting a construction permit in the study conducted last year. In scrip specific development, Maruti Suzuki India was trading in green after reporting 31.47% rise in its production to 118,667 units in June 2017, as compared to 90,262 units in June 2016.

On the global front, Asian markets were trading in red, as earlier gains were quashed by tensions on the Korean peninsula after North Korea fired a missile that landed in Japanese waters, deepening concerns over the isolated nation's nuclear capabilities. Besides, investors remained cautious ahead of the Reserve Bank of Australia's interest rate decision due later in the day.

The BSE Sensex is currently trading at 31182.40, down by 39.22 points or 0.13% after trading in a range of 31166.37 and 31353.46. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.47%, while Small cap index down by 0.18%.

The top gaining sectoral indices on the BSE were Energy up by 0.95%, Oil & Gas up by 0.45%, IT up by 0.22% and TECK up by 0.04%, while Realty down by 0.84%, Telecom down by 0.59%, Auto down by 0.58%, Consumer Durables down by 0.55% and Utilities down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.65%, Adani Ports & SEZ up by 0.95%, ONGC up by 0.91%, Infosys up by 0.85% and NTPC up by 0.80%. On the flip side, Hero MotoCorp down by 1.96%, Tata Motors - DVR down by 1.67%, Dr. Reddys Lab down by 1.41%, Axis Bank down by 1.38% and ITC down by 1.07% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that the growth momentum of the Indian pharmaceutical industry is likely to witness moderate in the next three years, largely owing to slowdown in revenues from the United Sates, increasing competition and adoption of generics reaching a saturation level. Apart from this, it also noted that increased regulatory scrutiny and consolidation of supply chain in the US market along with increased R&D expenses will also have an impact on profitability of Indian drug companies. 

The rating agency has pointed out that the overall aggregate revenues of 21 leading players increased only by 7.4% in FY17 as compared to 10.1% posted in the previous fiscal year. For the period between FY18 to FY20, it noted that the Indian pharma sector is expected to surge at 7-10% after mid to high double digit growth over the last five years. It also said that revenue growth from US during FY 2012-17 period for its sample set experienced a compounded annual growth rate (CAGR) of 19.3%. However, ICRA has stated that growth from the US has come down to 4% in FY17 from 14.4% in FY16, with the fourth quarter of FY17 registering negative growth despite consolidation and currency benefits.

The report further said that the continued regulatory interventions in domestic market are expected to put some pressure in near term though long-term growth prospects for domestic pharmaceutical market remain healthy given increasing penetration, accessibility and continued new launches. The report also noted that the domestic pharma industry has gained adequate scale and drug development capabilities over the last decade of growth which would keep them in good stead to capture new opportunities in the US market.

The CNX Nifty is currently trading at 9598.85, down by 16.15 points or 0.17% after trading in a range of 9595.50 and 9650.65. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.90%, BPCL up by 1.62%, Adani Ports & SEZ up by 1.18%, ONGC up by 0.88% and Infosys up by 0.85%. On the flip side, Indiabulls Housing Finance down by 3.25%, GAIL India down by 1.77%, Hero MotoCorp down by 1.75%, Tata Motors - DVR down by 1.73% and Dr. Reddy’s Lab down by 1.46% were the top losers.

Asian markets were trading in red; Hang Seng decreased 390.81 points or 1.52% to 25,393.36, Taiwan Weighted shed 65.01 points or 0.62% to 10,347.78, Jakarta Composite dipped 37.65 points or 0.64% to 5,872.59, Nikkei 225 was down by 23.45 points or 0.12% to 20,032.35, KOSPI Index declined 13.96 points or 0.58% to 2,380.52, Shanghai Composite decreased 13.11 points or 0.41% to 3,182.80 and FTSE Bursa Malaysia KLCI slipped 5.12 points or 0.29% to 1,763.55.