Benchmarks extend losses; Nifty below 10,000 mark

Indian equity benchmarks extended their losses in the morning trade on account of selling in blue chip counters. The equity benchmarks fell further for third consecutive session weighed by Healthcare stocks, with Nifty slipping below 10,000 mark. The rupee opened higher against dollar on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net buyers in domestic equity markets on Thursday and bought shares worth Rs 567.91 crore with gross purchases and gross sales of Rs 4,106.42 crore and Rs 3,538.51 crore, respectively. Traders preferred to remain on sidelines taking note of this week’s development with the RBI policy announcement to cut repo rate failed to enthuse the street. Services sector plunged into contraction mode in July with the sharpest fall in about four years as confusion caused by the GST rollout triggered a dip in new business orders. The data follows a similar downtrend seen in the manufacturing sector, which also contracted in July following the implementation of Goods and Services Tax (GST) resulting into a significant drop in new orders and output. Public sector banks were buzzing as the Lok Sabha passed the Banking Regulation (Amendment) Bill, 2017 introduced last month to replace the existing ordinance promulgated in May this year to empower the Reserve Bank of India to deal with stressed assets. Replying to a debate on the bill, Finance Minister Arun Jaitley said the process of resolution of bad loans will start shortly. The finance minister said RBI had already identified top 12 loan defaulters and more cases will be taken up for resolution. 

Traders were seen piling up position in Consumer Durables, Metal and Basic Materials stocks, while selling was witnessed in Healthcare, Telecom and Energy sector stocks. In scrip specific development, Biocon was trading in red as the regulatory woes continued for the company, as United States Foods and Drug Administration (USFDA) has reportedly issued a form 483 with 10 observations to its Bangalore plant. The US drug regulator found lapses of current good manufacturing practices (cGMP) at the company’s small molecule injectable plant in Bengaluru. Stocks like Suzlon Energy, Solar Industries India, Indosolar and Websol Energy were trading in green on reports that anti-dumping authorities have recommended action against key Chinese components for windmills, and are considering a similar petition for solar equipment, delivering another blow to the flood of cheap imports from Beijing and potentially arresting the steep fall in renewable energy tariffs.

On the global front, Asian markets were trading mostly in green. A flurry of data in coming weeks should show steady growth in China in July, though the potential for increased trade friction with the United States poses a risk to the world’s second-largest economy as it navigates a tighter policy environment. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,200 and 10,000 levels respectively. The market breadth on BSE was negative in the ratio of 901:1218, while 116 scrips remained unchanged.

The BSE Sensex is currently trading at 32118.74, down by 119.14 points or 0.37% after trading in a range of 32107.99 and 32252.45. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.36%, while Small cap index was down by 0.22%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 3.61%, Metal up by 0.78%, Basic Materials up by 0.38%, PSU up by 0.29% and IT up by 0.15%, while Healthcare down by 1.53%, Telecom down by 1.05%, Energy down by 0.80%, Power down by 0.40% and Capital Goods down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.32%, Hindustan Unilever up by 1.29%, Hero MotoCorp up by 1.10%, Tata Motors up by 0.85% and Power Grid up by 0.77%.

On the flip side, Sun Pharma down by 2.40%, Dr. Reddy’s Lab down by 2.25%, Reliance Industries down by 1.96%, Lupin down by 1.89% and Bharti Airtel down by 1.53% were the top losers.

Meanwhile, after the RBI cut the interest rates by 25 basis points, Finance Minister Arun Jaitley has said that lending rate of 14-15 per cent will make India uncompetitive in the global market and industry cannot invest at such higher interest rates. He said at a time when inflation was running high at 10 per cent bank deposit rates were high at 9 per cent. But loans were extended by banks at 14-15 per cent interest rate and with such high interest rates global industrial investments will not come in.

Jaitley added that Interest rates will 'slowly' become 'reasonable' and the government has taken steps to offer stable interest rates to investors so that they are not lured into chit fund schemes, which attract investors by offering a meagre 1-1.5 per cent interest rate higher than what is given by banks. He also said that the government insurer LIC has come out with a pension scheme to offer fixed rate of interest to investors.

The finance minister defended the largest public sector lender State Bank of India's decision to cut interest rate on saving accounts of less than Rs 1 crore, saying the move was in sync with reduction in lending rate. Further adding that high interest rate on savings and fixed deposits was during a time when inflation was 10-11 per cent and sluggishness was setting in the economy. So when the lending rate came down, so did savings account.

The CNX Nifty is currently trading at 9995.30, down by 18.35 points or 0.18% after trading in a range of 9991.10 and 10026.80. There were 28 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Indian Oil up by 4.07%, Vedanta up by 1.84%, Tata Steel up by 1.39%, Hindustan Unilever up by 1.25% and Hindalco up by 1.18%.

On the flip side, Sun Pharma down by 2.37%, Tata Power down by 2.24%, Dr. Reddy’s Lab down by 2.01%, Aurobindo Pharma down by 1.93% and Bosch down by 1.85% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.07 points or 0% to 1,771.97, KOSPI Index increased 9.04 points or 0.38% to 2,395.89, Shanghai Composite increased 10.58 points or 0.32% to 3,283.51, Jakarta Composite increased 10.88 points or 0.19% to 5,791.45, Hang Seng increased 11.4 points or 0.04% to 27,542.41 and Taiwan Weighted increased 26.92 points or 0.26% to 10,496.80.

On the other hand, Nikkei 225 decreased 56.28 points or 0.28% to 19,972.98.