Markets continue weak trade; Nifty below 9,900 mark amid geopolitical worries

Extending their early losses, the local equity markets continued weak trade and were now trading at day’s low points in early afternoon session, on the back of sustained selling activities by market-participants. Sentiment on the street weakened as Asian markets took a plunge after North Korea tested yet another missile. Adding the pessimism among investors, foreign brokerage report said that investment continued to slip to 27.5 percent of GDP, from 29.2 percent in June 2016, with high lending rates dampening demand and sustaining excess capacity. Further, selling appeared in Realty, Industrials, Telecom and Basic Materials stocks also dragged the major indices lower. The broader markets also extended losses with the BSE Midcap and Smallcap indices dropping by 1.61% and 1.56%, respectively. In the currency front, the rupee dropped by another 8 paise to 64.11 against the US dollar on increased demand for the American currency from importers. In scrip specific development, Coal India was up by around two and half percent after reporting provisional production of 37.63 million tonnes (MT) in August 2017, as against a target of 36.96 MT.

On the global front, Asian markets were trading mostly in red after North Korea carried out its sixth and most powerful nuclear test on Sunday, which it said was an advanced hydrogen bomb capable of being loaded onto an intercontinental ballistic missile (ICBM) with 'perfect success'. Back home, the BSE Sensex is currently trading at 31561.81, down by 330.42 points or 1.04% after trading in a range of 31560.32 and 31932.20. There were 2 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.61%, while Small cap index was down by 1.56%.

The top losing sectoral indices on the BSE were Realty down by 3.06%, Industrials down by 1.78%, Telecom down by 1.69%, Basic Materials down by 1.69% and Oil & Gas down by 1.52%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Coal India up by 1.74% and ONGC up by 0.06%. On the flip side, Adani Ports & SEZ down by 3.37%, Infosys down by 2.68%, Tata Motors - DVR down by 2.36%, Tata Motors down by 2.23% and Hero MotoCorp down by 1.77% were the top losers.

Meanwhile, India's total public debt (excluding liabilities under the public account) increased by 3.6 percent to Rs 63.35 lakh crore at the end of June 2017. The debt of the government was Rs 61.13 lakh crore at the end of March 2017. According to the report on debt management released by the finance ministry, this indicated a quarter-on-quarter rise of 3.6 percent in Q1 FY18 as compared to a decline of 1.15 percent in the previous quarter (Q4 FY17). Internal debt constituted 93 percent of public debt as of June 2017, while marketable securities accounted for 83.2 percent. 

As per the report, the liquidity in the economy during the April-June quarter remained comfortable and continues to be in surplus mode after the demonetization move which kept the yield environment low. However, it observed that the cash position of the government was somewhat stressed during Q1 of FY17, due to front-loading of expenditure by the ministries and heavy repayment of G-secs falling during the quarter, combined with low cash inflows generally seen during the first half of the year.

To tide over these mismatch in cash flows of the government, the report said that Cash Management Bills (CMBs) of varying durations amounting to Rs 1,30,000 crore were issued during the quarter. It noted that CMBs of Rs 40,000 crore were redeemed during the quarter itself. It also revealed that the government also took recourse to Ways and Means advance from RBI during the spells of cash deficit and drew overdraft briefly during the quarter.

The CNX Nifty is currently trading at 9862.45, down by 111.95 points or 1.12% after trading in a range of 9861.05 and 9988.40. There were 4 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.59%, Indiabulls Housing Finance up by 0.60%, Bosch up by 0.28% and ONGC up by 0.06%. On the flip side, Indian Oil Corp. down by 4.54%, Adani Ports & SEZ down by 3.48%, Infosys down by 2.72%, Tech Mahindra down by 2.63% and Ambuja Cement down by 2.57% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 267.22 points or 0.96% to 27,685.94, Nikkei 225 dipped 183.22 points or 0.93% to 19,508.25, Jakarta Composite shed 34.47 points or 0.59% to 5,829.59, KOSPI Index was down by 28.04 points or 1.19% to 2,329.65 and Taiwan Weighted declined 24.95 points or 0.24% to 10,569.87.

On the flip side, Shanghai Composite increased 0.94 points or 0.03% to 3,368.06 and FTSE Bursa Malaysia KLCI was up by 12.02 points or 0.68% to 1,773.16.