Benchmarks extend southward journey for fourth straight session

Extending southward journey for fourth straight session, Indian equity benchmarks have made a sluggish start, with Sensex and Nifty breaching their crucial 31,700 and 9,900 levels in early deals on Thursday amid feeble global cues. Traders failed to get any sense of relief with report that a contraction in refund outgo, rich dividends from ‘Operation Clean Money’ and more assessees coming under the income tax net post demonetisation, net direct tax collections surged 19.1 per cent to Rs1.90 lakh crore during April-July. Investors also paid no heed to Adi Godrej’s statement that despite certain teething problems under the new tax regime, the Goods and Services Tax (GST) will lead to considerable increase in the GDP in the next six months.

Weak global cues mainly dampened sentiments with all the Asian counters trading in red at this point of time on account of escalation in tensions between the U.S. and North Korea. The US markets extended their weakness and ended mildly lower once again in the last session on geopolitical concerns amid a continued increase in tensions between the U.S. and North Korea.

Back home, depreciation in Indian currency against dollar too dampened sentiments. The rupee was trading at 63.97 a dollar, down 0.20% from its Tuesday’s close of 63.84. Meanwhile, the market breadth indicating the overall health of the market was weak, with 415 shares gaining and 1,520 shares declining, while a total of 66 shares were unchanged.

The BSE Sensex is currently trading at 31662.90, down by 134.94 points or 0.42% after trading in a range of 31588.26 and 31756.27. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.97%, while Small cap index was down by 1.17%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.28%, IT up by 0.17% and TECK was up by 0.11%, while Industrials down by 1.81%, Auto down by 1.66%, Utilities down by 1.39%, Power down by 1.28% and Basic Materials was down by 1.16% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 1.71%, Sun Pharma up by 1.53%, Dr. Reddy’s Lab up by 1.50%, Cipla up by 0.65% and Infosys up by 0.60%. On the flip side, Tata Motors - DVR down by 6.64%, Tata Motors down by 5.94%, ONGC down by 1.63%, NTPC down by 1.33% and Adani Ports down by 1.25% were the top losers.

Meanwhile, rating agency ICRA in its latest report has stated that the Indian passenger vehicle industry’s  long-term prospects remain favourable, supported by the factors like low penetration levels and increasing disposable income, it also said that domestic passenger vehicle sales will grow by 9-10% during the fiscal year 2017-18 and added that the sales are expected to grow in the range of 9-11% at a compounded annual growth rate (CAGR) over the next five fiscals.

As per the report, overall macroeconomic indicators too remain favourable with gross domestic product (GDP) growth expected at 7.2% in FY18, normal monsoon expectations which will boost rural income. Besides, the price-cut post newly implemented goods and services tax (GST) and the low cost of car ownership due to falling interest rate and subdued fuel prices will provide impetus to the industry.

The rating agency further added that volume growth over the last few quarters is primarily driven by the compact utility vehicles. Thus, it is expecting that the utility vehicles segment to outperform overall industry growth in the near to medium term given the shift in customer preference towards utility vehicles and influx of new models.

The CNX Nifty is currently trading at 9868.75, down by 39.30 points or 0.40% after trading in a range of 9835.95 and 9879.20. There were 15 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 4.27%, Tech Mahindra up by 2.42%, Lupin up by 1.76%, Sun Pharma up by 1.60% and Dr. Reddy’s Lab up by 1.40%. On the flip side, Tata Motors - DVR down by 6.54%, Tata Motors down by 5.76%, Eicher Motors down by 2.10%, BPCL down by 1.99% and GAIL India down by 1.82% were the top losers.

All the Asian equity indices were trading in red; Hang Seng declined 441.96 points or 1.59% to 27,315.13, Taiwan Weighted decreased 133.74 points or 1.28% to 10,336.64, Shanghai Composite dropped 34.88 points or 1.06% to 3,240.69, Nikkei 225 slipped 34.65 points or 0.18% to 19,704.06, KOSPI Index shed 23.35 points or 0.99% to 2,345.04, Jakarta Composite dipped 6.71 points or 0.12% to 5,817.30 and FTSE Bursa Malaysia KLCI was down by 1.31 points or 0.07% to 1,776.63.