Benchmarks remain in grip of bears; Nifty tumbles around 1%

Indian equity benchmarks remained in the grip of bears in late afternoon session and shed around a percent each, on the back of continuous selling in IT, TECK and Healthcare stocks. Weak global cues also contributed to the slide. Sentiment remained pessimistic with Chief Economic Adviser Arvind Subramanian’s statement that  overemphasis on renewable energy would create a 'double whammy' for the government by reducing the viability of thermal power plants and raising bad loans of state-owned banks. Traders paid no attention towards the private report stating that India’s tax revenues will benefit from a widening tax base and robust advance collections. However, it said that non-tax revenues will face speed-bumps in fiscal 2018.

On the global front, European markets were trading in red, as investors reacted to Spain’s worst terror attack in more than 13 years. Asian markets were also trading in red. Back home, in scrip specific development, Cambridge Technology Enterprises (CTE) traded higher after the company signed an agreement with Atlassian to engage in the Atlassian Solution Partner Program. As an Atlassian Solution Partner, CTE will be consulting, implementing and delivering solutions to customers, enabling them to unleash their teams’ potential.

The BSE Sensex is currently trading at 31451.44, down by 344.02 points or 1.08% after trading in a range of 31349.13 and 31729.88. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.52%, while Small cap index was down by 0.87%.

The top gaining sectoral indices on the BSE were Telecom up by 1.20%, Oil & Gas up by 0.85%, Energy up by 0.34% and FMCG up by 0.29%, while IT down by 3.65%, TECK down by 2.83%, Healthcare down by 1.90%, Realty down by 1.40% and Metal down by 1.17% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.79%, Hindustan Unilever up by 1.71%, Power Grid Corporation up by 1.59%, Bharti Airtel up by 0.89% and Asian Paints up by 0.39%. On the flip side, Infosys down by 10.10%, Sun Pharma down by 3.90%, NTPC down by 2.06%, Coal India down by 1.90% and Tata Motors down by 1.83% were the top losers.

Meanwhile, after the Union Cabinet last month approved the new Wage Code Bill, which will ensure a minimum wage across all sectors by integrating four labour related laws and doubling the minimum wages from the present about Rs 9,000 per month to Rs 18,000, the Apparel Export Promotion Council (AEPC) has sought government’s clarification over minimum wages in the garment industry, stating that if the wages in the industry get doubled to Rs 18,000 per month, it will affect the exports, employment and also lead to increment in the costs.

AEPC Chairman Ashok G Rajani said there is a lot of confusion surrounding minimum wages after clearance of the Wage Code Bill by the Cabinet and also pointed that the booking of export orders has got impacted post clearance of the Wage Code Bill by the Cabinet and said that a clarification by the government is required to restore the confidence of foreign buyers. He further said that amid challenging environment, doubling of the minimum wages will put additional burden on the garment sector and would make it unviable and unsustainable.

AEPC Chairman while stressing that around 70 per cent of the workforce in the ready-made garment industry are women, said that fixing of minimum wages at Rs 18,000 per month will not only adversely affect the exports, but lead to a fall in employment generation in the sector.

The CNX Nifty is currently trading at 9811.35, down by 92.80 points or 0.94% after trading in a range of 9783.65 and 9865.95. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.49%, BPCL up by 2.26%, Ultratech Cement up by 2.13%, Power Grid Corporation up by 1.59% and Hindustan Unilever up by 1.52%. On the flip side, Infosys down by 10.04%, Sun Pharma down by 3.88%, Zee Entertainment down by 3.07%, Vedanta down by 2.76% and Tata Motors down by 1.97% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 296.65 points or 1.08% to 27,047.57, Nikkei 225 decreased 232.22 points or 1.18% to 19,470.41, Taiwan Weighted decreased 48.04 points or 0.46% to 10,321.33, KOSPI Index decreased 3.3 points or 0.14% to 2,358.37 and FTSE Bursa Malaysia KLCI decreased 2.88 points or 0.16% to 1,773.43. On the flip side, Shanghai Composite increased 0.29 points or 0.01% to 3,268.72 and Jakarta Composite increased 11.75 points or 0.2% to 5,903.70.

European markets were trading in red; Germany’s DAX decreased 99.02 points or 0.81% to 12,104.44, UK’s FTSE 100 decreased 67.64 points or 0.92% to 7,320.23 and France’s CAC decreased 59.41 points or 1.15% to 5,087.44.