Markets near day’s low; Sensex drops almost 1%

Extending their losses, Indian benchmarks were hovering near the intraday low in late morning session amid weak global cues. All the sectoral indices were trading in red with metal being the biggest dragger. Traders remained concerned as the Organisation for Economic Co-operation and Development has trimmed India’s growth forecast for the current financial year, citing the temporary impact of the rollout of the goods and services tax and demonetisation, expecting the economy to expand at a slower pace than China. Investors failed to get relief even after World Trade Organisation (WTO) has raised its 2017 forecast for world trade growth to 3.6 percent from the 2.4 percent estimated earlier, a development which augurs well for India. It also said that the predicted growth would also represent a substantial improvement on the lackluster 1.3 percent increase in 2016.

On the global front, Asian markets were trading in red after North Korea threatened it could consider testing a nuclear weapon in the Pacific. Investors were also digesting the prospect of an additional rate hike from the Fed this year. Back home, in scrip specific development, Usha Martin surged on plan to sell either of its two profitable divisions - wire and wire rope or steel. In this regards, the company has appointed the Royal Bank of Canada as a merchant banker for looking at prospective buyers. This apart, other consultants like BCG, have also been appointed to chart out its future course.

The BSE Sensex is currently trading at 32063.45, down by 306.59 points or 0.95% after trading in a range of 32058.81 and 32342.81. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.59%, while Small cap index was down by 1.60%.

The top losing sectoral indices on the BSE were Metal down by 2.50%, Basic Materials down by 2.17%, Realty down by 2.07%, Oil & Gas down by 1.96% and PSU down by 1.80%, while there were no gainers on BSE sectoral front.

The top gainers on the Sensex were Tata Motors up by 1.49%, Tata Motors - DVR up by 0.71%, Cipla up by 0.68%, Sun Pharma up by 0.63% and Wipro up by 0.45%. On the flip side, ICICI Bank down by 2.25%, Infosys down by 2.22%, Tata Steel down by 2.06%, Coal India down by 1.85% and Hero MotoCorp down by 1.73% were the top losers.

Meanwhile, citing the temporary impact of the rollout of the goods and services tax (GST) regime and demonetization move, Paris-based think tank the Organization for Economic Cooperation and Development (OECD) has trimmed India's Gross Domestic Product (GDP) growth rate forecast by 0.6 percentage point to 6.7 percent for the financial year 2017-18. Earlier in June, it had pegged the country's growth forecast at 7.3 percent for this period. Besides, it has also cut its growth forecast for FY19 to 7.2 percent from 7.7 percent estimated earlier.

The OECD has pointed out that in India, the transitory effects of demonetization and of the implementation of the GST have led to a downward revision in 2017 growth projections, while business investment has remained weak. Over the long term, it noted that the GST is expected to boost investment, productivity and growth. Talking about monetary policy, it stated that there could be room for further cuts in interest rates in India if inflation durably remains around or lower than 4 percent.

With regard to the global economy, the Paris-based economic think tank has said that growth this year is projected to pick up to around 3.5 percent and further rise to 3.7 percent in 2018, higher than in 2016 but still below historical norms. It added that developments in emerging market economies have been more diverse with positive surprises in China and Russia, and a downward revision in India in part due to transitory factors.

The CNX Nifty is currently trading at 10002.20, down by 119.70 points or 1.18% after trading in a range of 10001.20 and 10095.05. There were 8 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 1.57%, Tata Motors up by 1.35%, Tata Motors - DVR up by 0.75%, Cipla up by 0.67% and Sun Pharma up by 0.49%. On the flip side, Yes Bank down by 4.07%, Hindalco down by 3.41%, Indian Oil Corporation down by 3.09%, Vedanta down by 3.01% and Ultratech Cement down by 2.98% were the top losers.

All the Asian markets were trading in red; Hang Seng decreased 229.62 points or 0.82% to 27,880.71, Taiwan Weighted decreased 128.76 points or 1.22% to 10,449.68, Nikkei 225 decreased 32.22 points or 0.16% to 20,315.26, KOSPI Index decreased 23.04 points or 0.96% to 2,383.46, Shanghai Composite decreased 9.65 points or 0.29% to 3,348.16 and Jakarta Composite decreased 1.9 points or 0.03% to 5,904.67.