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, with the Nifty inching below 10,000 mark. The rupee opened higher against dollar on Tuesday on account of selling of American currency by banks and exporters. Foreign Portfolio Investors sold shares worth Rs 868.70 crore in domestic equity markets on Monday with gross purchases and gross sales of Rs 4,321.80 crore and Rs 5,190.50 crore, respectively. Traders were cautious after Singaporean based lender said that it suspects that there has been a change in the stance by the authorities to let the rupee appreciate more, but warned that it can hurt manufacturing and exports. Separately, SEBI has directed bourses to initiate action against 331 suspected shell companies that are listed and these scrips will not be available for trading this month. The regulators directive came after the Corporate Affairs ministry shared a list of 331 listed companies that are suspected to be shell entities and could even face compulsory delisting.

Investors took note that Public Sector Banks (PSBs) have written off nearly Rs 2.5 lakh crore loans in the last five financial years. The finance ministry said quoting RBI data that as many as 27 public sector banks, including SBI and its five associates, in 2016-17 have written off Rs 81,683 crore, the highest in the last five fiscals. Realty sector stocks were under pressure after banks in consultation with the RBI, have decided not to extend loans to those projects which have not been registered under RERA. Banks have also sought additional collateral, including on personal properties of promoters, as guarantees while disbursing loans to a few real estate developers. Select auto stocks were under pressure after GST council yesterday approved the proposal to hike cess on SUVs, mid-sized, large and luxury cars to 25%, from 15%. Also, hybrid vehicles with engine capacity of more than 1500 cc and mid segment hybrid cars of less than 1500 cc fall in the category.

Traders were seen piling up position in Metal and Basic Materials stocks, while selling was witnessed in Realty, Oil & Gas and PSU sector stocks. In scrip specific development, Tata Steel was trading firm on reporting results for first quarter ended June 30, 2017. The company has reported consolidated net profit of Rs 921.09 crore for the quarter ended June 30, 2017 as against a net loss of Rs 3183.07 crore for the corresponding quarter in the FY17. Total consolidated income of the company increased by 19.24% at Rs 31128.80 crore for quarter under review as compared to Rs 26107.09 crore for the same quarter in the previous year.

On the global front, Asian markets were trading mostly in green, while Shanghai Composite was down as disappointing Chinese trade data clouded the otherwise upbeat outlook on global growth. China’s exports and imports grew more slowly than expected in July, raising concerns over whether global demand is starting to cool even as major Western central banks consider scaling back their massive stimulus programs. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,100 and 10,000 levels respectively. The market breadth on BSE was negative in the ratio of 466:1693, while 86 scrips remained unchanged.

The BSE Sensex is currently trading at 32045.79, down by 227.88 points or 0.71% after trading in a range of 31915.20 and 32354.77. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.02%, while Small cap index was down by 1.11%.

The top gaining sectoral indices on the BSE were Metal up by 2.17% and Basic Materials up by 0.49%, while Realty down by 2.33%, Oil & Gas down by 2.03%, PSU down by 1.78%, Energy down by 1.64% and Power down by 1.50% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.48%, Hindustan Unilever up by 1.16%, Bajaj Auto up by 0.79%, Cipla up by 0.59% and Tata Motors up by 0.31%.

On the flip side, SBI down by 2.14%, ONGC down by 1.87%, NTPC down by 1.78%, Dr. Reddy’s Lab down by 1.71% and Kotak Mahindra Bank down by 1.61% were the top losers.

Meanwhile, on getting poor response from bidders, the government has cancelled the fifth round of coal mines auction. As per the government notification, the tender process for the coal mines being auctioned under 5th tranche of auction of coal mine had been terminated in accordance with Clause 3.3.2(b) of the tender document. The notice further said that consequently, the tenders of six mines stand terminated.

Six coking coal blocks were to go under the hammer in the fifth round, five of which are in Jharkhand and one in Madhya Pradesh, but there was not good response from the bidders because the steel industry is in a bad shape. The six coal mines are Brahmadih, Choritand Tiliaya, Jogeshwar and Khas Jogeshwar, Rabodih OCP and Rohne in Jharkhand, and Urtan North in Madhya Pradesh.

Earlier, in December 2015, the government had annulled the fourth round of coal mine auctions too, planned for January 2016 on account of tepid response from bidders in sectors such as steel besides depressed commodity prices and adverse market conditions and then it announced that it would auction six coking coal mines.

The CNX Nifty is currently trading at 9989.00, down by 68.40 points or 0.68% after trading in a range of 9947.00 and 10083.80. There were 11 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.28%, Vedanta up by 3.89%, Tata Steel up by 3.52%, Hindustan Unilever up by 1.07% and Bajaj Auto up by 0.72%.

On the flip side, Bharti Infratel down by 3.62%, BPCL down by 3.34%, Indian Oil down by 3.21%, SBI down by 2.17% and ONGC down by 1.90% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.25 points or 0.01% to 1,778.16, KOSPI Index increased 1.84 points or 0.08% to 2,400.59, Jakarta Composite increased 29.69 points or 0.52% to 5,778.98 and Hang Seng increased 43.03 points or 0.16% to 27,733.39.

On the other hand, Nikkei 225 decreased 66.64 points or 0.33% to 19,989.25, Taiwan Weighted decreased 9.12 points or 0.09% to 10,570.26 and Shanghai Composite decreased 5.07 points or 0.15% to 3,274.39.