Markets hover near day’s lows; Nifty below 9900 mark

Indian bourses remained under pressure in late morning session and were hovering near day’s lows as investors adopted a cautious approach in view of August derivatives expiry and release of the GDP data for the June quarter. Sentiments also remained downbeat with assessment of RBI in its annual report that fiscal consolidation may come under threat at the central and state levels due to the immediate effects of the goods and service tax (GST), loan waivers and pay revisions, putting pressure on the overall growth matrix. Investors shrugged off global rating agency, Moody’s latest report which noted that its outlook for the Indian banking system is stable on improved prospects for asset quality. Meanwhile, investors also paid no heed to report that the commerce and industry ministry has approved two foreign direct investment proposals, including that of Dyson International, in the single brand retail sector.

On the global front, Asian markets were trading mostly in red, after Wall Street rose on a stronger estimate of U.S. economic growth and Chinese factory activity improved. Back home, in scrip specific development, Schaeffler India gained after the company received an approval for the scheme of amalgamation of INA Bearings India and LuK India with itself. The Board of Directors of the company in its meeting held on August 30, 2017 has approved the same.

The BSE Sensex is currently trading at 31560.85, down by 85.61 points or 0.27% after trading in a range of 31551.85 and 31722.41. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.08%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Energy up by 0.75%, Oil & Gas up by 0.69%, Consumer Durables up by 0.61%, Consumer Disc up by 0.13% and Capital Goods up by 0.13%, while Telecom down by 0.90%, Metal down by 0.88%, TECK down by 0.58%, IT down by 0.49% and Healthcare down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.37%, Reliance Industries up by 1.08%, Hero MotoCorp up by 0.39%, HDFC up by 0.26% and Maruti Suzuki up by 0.16%. On the flip side, Coal India down by 1.08%, Infosys down by 1.01%, Bharti Airtel down by 0.99%, ICICI Bank down by 0.98% and Mahindra & Mahindra down by 0.96% were the top losers.

Meanwhile, the domestic rating agency, ICRA in its latest report has said that steel prices in the domestic market staged a smart recovery, taking cues from the buoyancy in global steel prices despite a moderate demand growth of 4.4 percent in the first four months of the financial year of 2017-18. It also said that since June 2017, global steel prices have registered a sharp recovery, mainly driven by the Chinese government's supply-side reforms to reduce domestic steel over-capacity, a steadily declining trend in Chinese steel exports on the back of resilient Chinese domestic steel demand.

Also, the rating agency has said that international steel capacity utilisation levels too increased from 68 percent in December 2016 to 73 percent in June 2017. Apart from structural factors like closure of excess capacity, it believes that up-fronting of production and purchases ahead of a planned winter shutdown in China is also a factor leading to the buoyancy in steel production and prices witnessed since June 2017. Therefore, it noted that continuity of this price momentum hinges upon the sustainability of demand from the steel intensive real-estate and infrastructure sectors in China.

The report further indicated that between July and August of FY18, domestic hot rolled coil (HRC) prices have increased by around 10 per cent, reaching Rs 39,250/MT in the fourth week of August from Rs 35,750/MT in the first week of July. Additionally, it noted that domestic steel mills have also continued to push exports, which grew 66% between April and July FY18. Further, it explained that a steadily rising export volume has enabled domestic steel mills to register a healthy annualised production growth of 7 percent and a capacity utilisation of around 81 per cent during the period from April to July of FY18. However, it pointed out that gross contribution levels of steel players are likely to improve sequentially in the current quarter, given that steel mills stand to benefit from buoyant steel prices in both the domestic and international markets in Q2FY18.

The CNX Nifty is currently trading at 9858.35, down by 26.05 points or 0.26% after trading in a range of 9856.95 and 9905.70. There were 16 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 1.85%, Wipro up by 1.41%, BPCL up by 1.08%, Reliance Industries up by 1.06% and Tech Mahindra up by 0.68%. On the flip side, Bharti Infratel down by 2.33%, Bosch down by 1.50%, Coal India down by 1.32%, Vedanta down by 1.23% and Infosys down by 1.04% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 215.76 points or 0.77% to 27,878.85, KOSPI Index decreased 15.94 points or 0.67% to 2,356.35, Shanghai Composite decreased 15.87 points or 0.47% to 3,347.75 and Jakarta Composite decreased 11.99 points or 0.2% to 5,860.52.

On the flip side, Taiwan Weighted increased 16.38 points or 0.15% to 10,585.78 and Nikkei 225 increased 134.99 points or 0.69% to 19,641.53.