Benchmarks kicks off new series on pessimistic note

Pressurized by feeble global cues, Indian equity benchmarks have made a weak start and frontline gauges declined below their crucial 32,300 (Sensex) and 10,000 (Nifty) levels. Traders also remained concerned with banking major ICICI reporting an eight percent fall in first quarter profit from a year earlier to Rs 2,049 crore, though the bank said it was optimistic about containing its bad loans after the three months to June saw the smallest rise in soured assets for seven quarters. Market participants shrugged off report from the prestigious Massachusetts Institute of Technology (MIT), which has said that monsoon has strengthened over north central India in the last 15 years, indicating a reversal in the general perception that the region has dried up in over a decade.

On the global front, all the regional counters were trading in red terrain at this point of time on some weak earnings; attention remained on corporate results ahead of a report on U.S. second-quarter growth. The US markets made a mixed closing in last session, and while the Nasdaq and the S&P 500 pulled back into negative territory, the Dow reached a new record closing high.

Back home, gems and jewellery stocks remained on buyers’ radar, as the government expects export growth of six per cent a year for the industry, which is going to be the new normal. Gems and jewellery net exports declined in FY’16 to $32 billion, as compared to $36.2 billion the previous year. Meanwhile, the market breadth indicating the overall health of the market was evenly divided, with 926 shares gaining and 964 shares declining, while a total of 120 shares were unchanged.

The BSE Sensex is currently trading at 32233.95, down by 149.35 points or 0.46% after trading in a range of 32164.16 and 32381.36. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.22%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.12%, Utilities up by 0.12%, Realty up by 0.09%, Consumer Durables up by 0.09% and Auto was up by 0.06%, while Telecom down by 1.29%, Healthcare down by 1.25%, Metal down by 0.72%, TECK down by 0.62% and IT was down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &SEZ up by 1.08%, Maruti Suzuki up by 0.92%, ITC up by 0.59%, Axis Bank up by 0.53% and Kotak Mahindra Bank up by 0.34%. On the flip side, Dr. Reddy's Lab down by 5.25%, Sun Pharma down by 2.29%, Lupin down by 2.13%, ICICI Bank down by 1.97% and Hindustan Unilever down by 1.78% were the top losers.

Meanwhile, paving way for consolidation of more than a dozen different central labour laws dealing with wages of labourers, the union cabinet has given its approval to the new wage code bill, which will ensure a minimum wage across all sectors by integrating four labour related laws and is expected to significantly improve the ease of doing business. The Labour Code on Wages Bill would amalgamate Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976. The proposed legislation is expected to benefit over 4 crore employees.

The Second National Commission on Labour had recommended that the existing labour laws should be broadly grouped into four or five Labour Codes on functional basis. The Labour Ministry has taken steps for drafting four Labour Codes - on wages, industrial relations, social security and welfare and safety and working conditions by simplifying, amalgamating and rationalising the relevant provisions of the existing central labour laws.

The bill seeks to empower the Centre to set a minimum wage across all sectors in the country and states will have to maintain that. However, states will be able to provide for higher minimum wage in their jurisdiction than fixed by the central government. The new minimum wage norms would be applicable for all workers irrespective of their pay. At present, the minimum wages fixed by the Centre and states are applicable to workers getting up to Rs 18,000 per month. Besides, the Labour Code on Wages bill is likely to be introduced in the ongoing monsoon session of parliament.

The CNX Nifty is currently trading at 9977.10, down by 43.45 points or 0.43% after trading in a range of 9963.05 and 9996.80. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.72%, ACC up by 1.15%, Adani Ports & SEZ up by 0.97%, Maruti Suzuki up by 0.85% and Indiabulls Housing up by 0.85%. On the flip side, Dr. Reddy's Lab down by 5.36%, ICICI Bank down by 2.16%, Lupin down by 2.08%, Sun Pharma down by 1.93% and Hindustan Unilever down by 1.83% were the top losers.

Asian markets trade in red; Hang Seng decreased 171.8 points or 0.63% to 26,959.37, Nikkei 225 shed 113.93 points or 0.57% to 19,965.71, Taiwan Weighted dropped 81.58 points or 0.78% to 10,426.79, KOSPI Index declined 33.7 points or 1.38% to 2,409.54, Jakarta Composite dipped 9.8 points or 0.17% to 5,809.95, Shanghai Composite slipped 1.44 points or 0.04% to 3,248.34 and FTSE Bursa Malaysia KLCI was down by 1.25 points or 0.07% to 1,768.82.