Benchmarks continue weak trade; Realty, Metal drag

Indian equity benchmarks continued their weak trade in the morning session on account of selling in front line blue chip counters. The rupee weakened over 10-week low against the US dollar, tracking losses in the Asian currencies markets after the US Federal Reserve left rates unchanged. So far this year, the rupee has gained 6%, while Foreign Institutional Investors (FIIs) have bought $6.78 billion and $20.41 billion in equity and debt, respectively. Traders remained cautious on mixed global cues, though US Fed forecasts only two rate increases in 2019 and one in 2020, but it would stick to the schedule for normalizing balance sheet by trimming its bond portfolio from October. Back home, there were concerns with some report that advance tax payments by top corporate for September quarter has increased only marginally.

Separately, a survey found that optimism level among India’s Chief Financial Officers during July-September touched a one and half year low amid concerns related to subdued demand and strain on corporate balance sheet. The Composite CFO Optimism Index for the September quarter of this year declined by 11% year-on-year and by 5.7% on a quarter-on-quarter basis. Optimism among the CFOs deteriorated more for the financial performance of their companies compared to overall macroeconomic conditions. Select pharma stocks were under pressure on reports that some drugs used in the treatment of cancer, hepatitis B, tuberculosis, measles and malaria are expected to get cheaper as the country’s drug pricing watchdog has limited their maximum prices. The National Pharmaceutical Pricing Authority (NPPA) said it has fixed and revised the ceiling prices of 39 drug formulations. The move is expected to slash prices of some of these drugs, like Hepatitis B immunoglobulin, by as much as 20%.

Traders were seen piling up position in Healthcare stock, while selling was witnessed in Realty, Metal and Basic Materials sector stocks. In scrip specific development, Coffee Day Enterprises was trading in red after a raid by Income Tax Department at the company’s locations and its Chairman’s residence. Operations are underway in about 24 places, including Mumbai, Chennai and Chikmagalur. Search operations are also underway at the residence of VG Siddhartha, Chairman and Managing Director of the Cafe Coffee Day. Den Networks was trading in green as it has received NCLT nod for demerger of its broadband undertaking with its wholly owned subsidiary.

On the global front, Asian markets were trading mostly in green, digesting the Fed views on rates and the latest Bank of Japan review. The Bank of Japan held policy steady as expected after the conclusion of it two-day meeting, with an asset buying program focused on the yield curve at 80 trillion yen annually. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,300 and 10,100 levels respectively. The market breadth on BSE was negative in the ratio of 559:1613, while 101 scrips remained unchanged.

The BSE Sensex is currently trading at 32237.92, down by 162.59 points or 0.50% after trading in a range of 32164.42 and 32462.61. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.90%, while Small cap index was down by 1.27%.

The only gaining sectoral index on the BSE was Healthcare up by 0.91%, while Realty down by 1.87%, Metal down by 1.79%, Basic Materials down by 1.31%, Capital Goods down by 1.27% and Industrials down by 1.18% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 4.62%, Lupin up by 2.41%, Cipla up by 1.64%, TCS up by 0.57% and Sun Pharma up by 0.45%.

On the flip side, Tata Motors - DVR down by 3.17%, Coal India down by 2.38%, ICICI Bank down by 1.91%, ONGC down by 1.64% and Larsen & Toubro down by 1.50% were the top losers.

Meanwhile, amid the worries of economic slowdown there is some good news for the country, as it has replaced China as the numero uno retail destination in 2017, as part of the global retail development index. AT Kearney partner Subhendu Roy unveiling the details of the study said that India has replaced China this year as the top retail destination.

The change in ranking was an outcome of four factors including increased consumer spending, beyond essentials, rising mobile and internet penetration, favourable foreign investment climate and bold action on cashless transaction and GST, this has triggered the entry of global brands into India with transparency and ease.
According to India Retail Report 2017, over the past 12-15 months, 100 percent cash and carry operations are gaining significance in India with Thailand's Siam Makro being the latest entrant in this space following Metro, Walmart and Booker.

Over the past decade or so, retailing in India has been an unequalled opportunity for both domestic and international players. In addition to the bigger retailer and brands, the mid-size brands from across the world are also looking to cash on the relaxed retail policy in India. With increasing global participation in Indian retail, the sector will further evolve and become more organised and competitive in providing better assortment to the consumer.

The CNX Nifty is currently trading at 10085.50, down by 55.65 points or 0.55% after trading in a range of 10058.60 and 10158.90. There were 14 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 4.69%, Lupin up by 2.33%, Cipla up by 1.53%, Sun Pharma up by 0.69% and Aurobindo Pharma up by 0.61%.

On the flip side, Tata Motors - DVR down by 3.19%, Zee Entertainment down by 2.49%, Indiabulls Housing Finance down by 2.41%, Hindalco down by 2.40% and Coal India down by 2.36% were the top losers.

The Asian markets were trading mostly in green; Shanghai Composite increased 7.74 points or 0.23% to 3,373.73, Hang Seng increased 8.43 points or 0.03% to 28,136.23, Nikkei 225 increased 65.88 points or 0.32% to 20,376.34 and Taiwan Weighted increased 72.49 points or 0.69% to 10,591.66.

On the other hand, KOSPI Index decreased 1.68 points or 0.07% to 2,410.52 and FTSE Bursa Malaysia KLCI decreased 0.89 points or 0.05% to 1,772.69.

Jakarta Stock Exchange was closed on account of Islamic New Year holiday.