Benchmarks extend losses in morning session

Indian equity benchmarks extended their losses in the morning session on account of selling in front line blue chip counters. The regional markets were under pressure on back of a fresh flare up in tensions between the US and North Korea. North Korean foreign minister Ri Yong Ho, speaking in New York, described President Donald Trump’s recent comments about North Korea as clearly a declaration of war, and said Pyongyang has the right to shoot down US bombers. The rupee opened lower against dollar and hit its fresh six-month low on account of buying of American currency by banks and importers. Foreign Portfolio Investors sold shares worth Rs 1,129.84 crore on Monday with gross purchases and gross sales stood at Rs 4577.71 crore and Rs 5707.55 crore, respectively, according to data available with depository NSDL.

Sentiments remained dampened after the Asian Development Bank (ADB) trimmed its growth forecast for South Asia to 6.7 percent this year and 7.0 percent next year, compared with estimates of 7.0 percent and 7.2 percent made in July. India’s growth was seen at 7.0 percent and 7.4 percent for this year and next, weaker than the July forecasts of 7.4 percent and 7.6 percent. ADB added that long-term interest rates in many Asian economies are closely linked to those in the US, policymakers need to strengthen their financial positions further and monitor debt levels and asset prices. The market may remain volatile as traders may roll over positions in the Futures & Options (F&O) segment from the near month i.e. September 2017 series to next month i.e. October 2017 series. The near month September 2017 derivatives contracts will expire on Thursday i.e. September 28, 2017.

Traders were seen piling position in Realty, Metal and Capital goods stocks, while selling was witnessed in FMCG, Energy and Oil & Gas sector stocks. In scrip specific development, BHEL was trading in green after the company’s shareholders of the capital goods firm approved the proposals to issue bonus shares and make a dividend payout. The PSU major had proposed to issue one bonus share for every two existing shares held in the company.

On the global front, Asian markets were trading mostly in red, against the backdrop of rising tensions on the Korean Peninsula. Japanese manufacturing activity expanded in September at the fastest pace in four months as domestic and export orders picked up, in a sign of strengthening demand. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 31,800 and 9,900 levels respectively. The market breadth on BSE was negative in the ratio of 271:1953, while 90 scrips remained unchanged.

The BSE Sensex is currently trading at 31514.28, down by 112.35 points or 0.36% after trading in a range of 31500.68 and 31693.59. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.06%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Realty up by 1.18%, Metal up by 0.99%, Capital Goods up by 0.40%, Basic Materials up by 0.29% and Industrials up by 0.26%, while FMCG down by 0.60%, Energy down by 0.58%, Oil & Gas down by 0.57%, PSU down by 0.41% and TECK down by 0.32% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.53%, Adani Ports & Special Economic Zone up by 1.10%, Tata Steel up by 0.94%, Sun Pharma up by 0.86% and Lupin up by 0.72%.

On the flip side, Hindustan Unilever down by 2.96%, Dr. Reddy’s Lab down by 2.61%, Asian Paints down by 1.94%, HDFC down by 1.33% and NTPC down by 0.93% were the top losers.

Meanwhile, Prime Minister Narendra Modi in its bid to boost the economy and bring reforms, has constituted a five-member Economic Advisory Council (EAC), led by NITI Aayog Member Bibek Debroy. Other members of the Economic Advisory Council constituted by PM Modi are Surjit Bhalla, Rathin Roy, Ashima Goyal and Ratan Watal.

In a statement from Prime Minister office it was stated that the terms of reference of the EAC would be to 'analyse any issue, economic or otherwise, referred to it by the prime minister and advising him thereon. It will also 'address issues of macroeconomic importance' and present its views to the prime minister, 'This could be either suo-motu or on reference from the prime minister or anyone else.'

It's terms of reference also includes attending to 'any other task as may be desired by the prime minister from time to time.” One of the members of the EAC, Ashima Goel stated that the Council will focus on structural reforms as well as try to put necessary course correction into effect in order to steer Indian economy towards the right direction.

The CNX Nifty is currently trading at 9832.95, down by 39.65 points or 0.40% after trading in a range of 9825.55 and 9885.45. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.34%, Vedanta up by 1.74%, Indiabulls Housing Finance up by 1.42%, Hindalco up by 1.11% and Adani Ports & Special Economic Zone up by 1.04%.

On the flip side, BPCL down by 4.22%, Hindustan Unilever down by 3.12%, Indian Oil Corporation down by 2.62%, Dr. Reddy’s Lab down by 2.51% and Asian Paints down by 1.90% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 69.75 points or 0.34% to 20,327.83, Taiwan Weighted decreased 50.5 points or 0.49% to 10,285.39, Jakarta Composite decreased 17.69 points or 0.3% to 5,876.92, Hang Seng decreased 10.14 points or 0.04% to 27,490.20, KOSPI Index decreased 6.89 points or 0.29% to 2,373.51 and FTSE Bursa Malaysia KLCI decreased 6.77 points or 0.38% to 1,762.37.

On the other hand, Shanghai Composite increased 3.03 points or 0.09% to 3,344.58.