Benchmarks continue weak trade; Nifty below 10,000 mark

Indian equity benchmarks continued their weak trade in the morning session witnessed by selling pressure after some disappointing quarterly earnings. The NSE Nifty started off the August series falling below 10,000-mark on correction in Healthcare and Telecom stocks. The rupee was trading lower against dollar in early trade on account of buying of American currency by banks and importers. Foreign Portfolio Investors stood net sellers in domestic equity markets on Thursday and sold shares worth Rs 192.56 crore with gross purchases and gross sales of Rs 5456.65 crore and Rs 5649.21 crore, respectively. Traders remained concerned with banking major ICICI Bank 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. Dr Reddy’s Lab extended fall to the second straight day after the Mumbai-based pharma company reported disappointing earnings for the June quarter. Biocon fell after its consolidated net profit fell 51.2% year-on-year to Rs 81.3 crore in the quarter ended June, missing estimates, mainly due to weakening of the US dollar and destocking ahead of implementation of goods and services tax (GST). Idea Cellular fell after the company reported its third successive net loss of Rs 815 crore for the quarter ended June as Reliance Jio triggered a brutal price war in the Indian mobile telephony market. Investors shrugged off the private report which enlightened that India’s M&A deal value in the first half of this year has reached $29.2 billion, an all time high since 2001. The January-June period of this year attracted 181 deals worth $29.2 billion, 56.7% higher compared with the corresponding period last year and even surpassed the first half 2012 level which was the historical high for deal making in India.

Traders were seen piling up position in Consumer Durables and Utilities stocks, while selling was witnessed in Healthcare, Telecom and Metal sector stocks. In scrip specific development, Zenotech Laboratories was trading in green after Sun Pharmaceutical Industries raised its stake in the company to over 50 percent. Sun Pharma raised its stake in Zenotech to 57.56 percent from 46.85 percent. Nava Bharat Ventures was trading in green as the company has achieved provisional acceptance of its 300 MW power plant. The 300 MW power plant of Maamba Collieries, the step down subsidiary of the company, has been in operation and has now achieved the provisional acceptance under the EPC contract.

On the global front, Asian markets were trading in red, as investors looked ahead to more corporate earnings due during the session and were cautious on the dollar. China’s registered urban unemployment rate stayed below 4 percent for the second consecutive quarter as the world’s No. 2 economy maintained a robust growth trajectory in 2017’s first half. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,300 and 10,000 levels respectively. The market breadth on BSE was positive in the ratio of 1149:1002, while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 32210.81, down by 172.49 points or 0.53% after trading in a range of 32164.16 and 32381.36. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.48% and Utilities up by 0.03%, while Healthcare down by 1.67%, Telecom down by 0.96%, Metal down by 0.91%, TECK down by 0.64% and IT down by 0.61% were the losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.53%, Adani Ports & Special Economic Zone up by 0.94%, Maruti Suzuki up by 0.54%, Axis Bank up by 0.52% and ITC up by 0.29%.

On the flip side, Dr. Reddy’s Lab down by 5.78%, Lupin down by 3.79%, Sun Pharma down by 2.67%, ICICI Bank down by 2.25% and Hindustan Unilever down by 2.20% were the top losers.

Meanwhile, acting on the complaints of Vishnu Chemicals for investigation into dumping of sodium dichromate, India has initiated anti-dumping probe into imports of a chemical used in the pharmaceutical industry from four countries -- Russia, South Africa, Kazakhastan and Turkey. The chemical is also used in metal finishing industries, anti-corrosive applications, water treatment chemicals, pigments and paints.

The commerce ministry's investigation arm -- the Directorate General of Anti-dumping and Allied Duties (DGAD) -- has found 'sufficient prima facie evidence of dumping' of the chemical, notifying that it has initiated an investigation into the alleged dumping, and consequent injury to the domestic industry.

The period of investigation covers April 2016 and March 2017 (12 months), and through the investigation the DGAD would determine the existence, degree and effect of alleged dumping and recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the injury to the domestic industry.

Imposition of anti-dumping duty is permissible under the World Trade Organisation (WTO) regime. The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a- vis foreign producers and exporters.

The CNX Nifty is currently trading at 9985.10, down by 35.45 points or 0.35% after trading in a range of 9963.05 and 9999.35. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were HDFC up by 1.89%, Yes Bank up by 1.58%, GAIL India up by 1.56%, Adani Ports & Special Economic Zone up by 1.26% and Indiabulls Housing up by 1.10%.

On the flip side, Dr. Reddy’s Lab down by 5.53%, Lupin down by 3.53%, Sun Pharma down by 2.58%, ICICI Bank down by 2.29% and Hindustan Unilever down by 2.13% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 174.83 points or 0.64% to 26,956.34, Nikkei 225 decreased 125.89 points or 0.63% to 19,953.75, Taiwan Weighted decreased 96.84 points or 0.92% to 10,411.53, KOSPI Index decreased 37.64 points or 1.54% to 2,405.60, Jakarta Composite decreased 10.86 points or 0.19% to 5,808.88, Shanghai Composite decreased 2.04 points or 0.06% to 3,247.74 and FTSE Bursa Malaysia KLCI decreased 0.76 points or 0.04% to 1,769.31.