Benchmarks extend losses in morning session

Indian equity benchmarks extended their losses in morning session, on account of selling in frontline blue chip counters. Traders remained concerned with disappointing earnings by the Tata Consultancy Services, India’s largest software services exporter whose quarterly profit fell 10 percent sequentially, while revenues declined 0.2 percent. Moreover, another IT bellwether firm Infosys reported a 3.3 percent sequential drop in net profit at Rs 3,483 crore for June quarter. Separately, global IT research firm Gartner further lowered its 2017 IT spending growth estimate to 2.4 percent from the 2.7 percent earlier on worries on digitization. The firm had first predicted for a 3 percent growth in worldwide IT spends, which got revised down to 2.7 percent in January this year. The downward revision in growth estimates comes amid growing anxieties over the future of the IT industry, with concerns surrounding automation and rising protectionism that is being blamed for job losses in the country. Investors took note that India is ranked 116 out of 157 nations on a global index that assesses the performance of countries towards achieving the ambitious sustainable development goals (SDGs). India with a score of 58.1, is behind countries such as Nepal, Iran, Sri Lanka, Bhutan and China. The SDG Index and Dashboards Report shows world leaders need to strengthen their efforts to realize the 17 global goals. Meanwhile, all eyes will be on a high-profile meeting chaired by Prime Minister Narendra Modi to review the country’s foreign direct investment policy, where further easing of restrictions may also be discussed.  Traders will also be eyeing the inflation data based on wholesale price index (WPI) for June slated to be announced later in the day.

Traders were seen piling up position in Healthcare, Telecom and Oil & Gas stocks, while selling was witnessed in Capital Goods, Realty and Industrials sector stocks. In scrip specific development, RattanIndia Infrastructure was trading firm after the Supreme Court dismissed the company promoters’ appeal against a SEBI order asking them to revise the open offer price to Rs 6.3 per share from Rs 3.20 apiece.

On the global front, Asian shares were trading mostly in red. South Korea’s central bank held its policy rate at a record-low 1.25 percent for a 13th straight month, a widely expected decision as policy makers seek to boost subdued private consumption and keep any thoughts of tightening off the table for now. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,000 and 9,900 levels respectively. The market breadth on BSE was negative in the ratio of 708:1532, while 104 scrips remained unchanged.

The BSE Sensex is currently trading at 31933.43, down by 103.95 points or 0.32% after trading in a range of 31931.31 and 32109.75. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.11%, while Small cap index was down by 0.52%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.99%, Telecom up by 0.65%, Oil & Gas up by 0.14%, Consumer Durables up by 0.10% and Energy up by 0.09%, while Capital Goods down by 0.87%, Realty down by 0.83%, Industrials down by 0.68%, FMCG down by 0.50% and Consumer Disc down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 1.08%, Sun Pharma up by 0.95%, Kotak Mahindra Bank up by 0.88%, Infosys up by 0.86% and Bharti Airtel up by 0.81%.

On the flip side, TCS down by 1.52%, Tata Motors - DVR down by 1.32%, Larsen & Toubro down by 1.09%, ICICI Bank down by 1.01% and ITC down by 0.99% were the top losers.

Meanwhile, India Ratings (Ind-Ra) has said that growth of coal consumption in India may remain tepid as plant load factor of thermal power plants (PLF) is likely to drop in the current fiscal. It has estimated that prices for the benchmark Newcastle coal with 5,500 calories of energy value will hover between $50 per tonne and $60 per tonne between 2018 and 2022.

The rating agency further said that given domestic coal availability likely to increase, thermal coal imports may decline by 15-20 million tonnes annually over the next two-three years and government policies in large seaborne trade participants and persistent substitution to renewable energy are likely to have a significant influence on coal prices. However, it also pointed that India’s domestic coal production is all set to increase on account of government efforts to reduce imports. The higher target is partly to be met by production in coal blocks fraught with clearances issues.

Ind-Ra believes investment in new coal projects is likely to remain subdued globally due to gloomy long-term demand prospects. Many top global suppliers may not invest in raising output, creating a strong floor for prices. It also pointed that higher-than-expected volume ramp-ups by large global miners and proliferation of renewables, major downward revision in royalties or taxes, and major decline in global economic activity may pose a downside risk to assumed prices.

The CNX Nifty is currently trading at 9858.45, down by 33.25 points or 0.34% after trading in a range of 9858.25 and 9913.30. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 3.55%, ACC up by 1.32%, Bharti Infratel up by 1.01%, Sun Pharma up by 0.98% and Bharti Airtel up by 0.95%.

On the flip side, TCS down by 1.63%, Tata Motors - DVR down by 1.52%, Tata Motors down by 1.24%, Yes Bank down by 1.15% and Larsen & Toubro down by 1.11% were the top losers.

The Asian markets were trading mostly in red; Jakarta Composite decreased 17.97 points or 0.31% to 5,812.08, Taiwan Weighted decreased 12.47 points or 0.12% to 10,447.68, Shanghai Composite decreased 6.45 points or 0.2% to 3,211.71 and FTSE Bursa Malaysia KLCI decreased 0.9 points or 0.05% to 1,752.88.

On the other hand, KOSPI Index increased 2.29 points or 0.1% to 2,411.78, Hang Seng increased 9.87 points or 0.04% to 26,356.04 and Nikkei 225 increased 33.69 points or 0.17% to 20,133.50.