Markets remain sluggish; FMCG, Banking stocks fall

Indian equity benchmarks continued their sluggish trade in late morning session, due to heavy selling in FMCG, Banking and TECK stocks amid rising tensions in the Korean peninsula. Sentiments remained concerned as Asian Development Bank downgraded India’s growth projection to 7 per cent for the current fiscal while lowering its forecast for the next financial year as well. Investors paid no heed towards Finance Minister Arun Jaitley’s statement that the government was in the process of undertaking measures to change the environment and provide a boost to the Indian economy. Besides, banking stocks took note of report that the Reserve Bank of India capping banks exposure to REITs and InvIts at 10% of the unit capital of such instruments. Meanwhile, Prime Minister Narendra Modi launched Rs 16,320-crore scheme - Pradhan Mantri Sahaj Bijli Har Ghar Yojana 'Saubhagya' - to provide electricity connections to over 4 crore families in rural and urban areas by December 2018.

On the global front, Asian markets were trading in red, following decline on Wall Street overnight, as the war of words between North Korea and the US escalated. Back home, in scrip specific development, Vivimed Labs was trading higher after the company signed definitive agreements to facilitate an investment of $42.5 million by OrbiMed Asia into the Company’s subsidiary, Vivimed Labs Mascarene, the holding entity of the company’s API business, UQUIFA.

The BSE Sensex is currently trading at 31479.36, down by 147.27 points or 0.47% after trading in a range of 31455.65 and 31693.59. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.07%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Metal up by 1.36%, Realty up by 1.26%, Basic Materials up by 0.34%, Industrials up by 0.05% and Utilities up by 0.02%, while FMCG down by 0.81%, Bankex down by 0.53%, TECK down by 0.51%, Energy down by 0.42% and IT down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 4.32%, Tata Steel up by 1.40%, Lupin up by 0.98%, Adani Ports & SEZ up by 0.90% and Sun Pharma up by 0.79%. On the flip side, Dr. Reddy’s Lab down by 3.76%, Hindustan Unilever down by 3.40%, Asian Paints down by 2.03%, HDFC down by 1.33% and Bharti Airtel down by 1.13% were the top losers.

Meanwhile, terming the decline in India’s GDP growth as ‘a little dip’ in Q1FY18, Finance Minister Arun Jaitley has said that the government was in the process of addressing challenges posed by the economy. Asserting that the Indian economy was sound, he said macro-economic data in the last three-and-a-half years have revealed that the economy was sounder than ever before except for the little dip in the last quarter. 

The minister further said that the government had taken several steps in the last three and half years and added that those at the receiving end would be uneasy about these measures. He noted that during April-June period, the performance of services sector had actually improved, even though manufacturing brought the GDP growth down. Besides, he attributed the slowdown to weak investment in the private sector that is dependent on banks' ability to support growth and to destocking ahead of the launch of GST on July 1 this year.

The country's economic growth unexpectedly slowed to 5.7% in the June quarter, the slowest pace in three years, underlining the disruption caused by the uncertainty related to the rollout of the goods and services tax (GST) even as the Indian economy is struggling to recover from a shock demonetisation.

The CNX Nifty is currently trading at 9827.15, down by 45.45 points or 0.46% after trading in a range of 9813.00 and 9885.45. There were 17 stocks advancing against 33 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were ONGC up by 4.07%, Vedanta up by 2.51%, Indiabulls Housing Finance up by 1.84%, Tata Steel up by 1.49% and Hindalco up by 1.35%. On the flip side, BPCL down by 4.34%, Dr. Reddy’s Lab down by 3.65%, Hindustan Unilever down by 3.36%, Asian Paints down by 2.15% and Tata Power down by 1.83% were the top losers.

All Asian markets were trading in red; Nikkei 225 decreased 82.9 points or 0.41% to 20,314.68, Taiwan Weighted decreased 78.87 points or 0.76% to 10,257.02, Hang Seng decreased 45.88 points or 0.17% to 27,454.46, Jakarta Composite decreased 17.69 points or 0.3% to 5,876.92, KOSPI Index decreased 9.4 points or 0.39% to 2,371.00, FTSE Bursa Malaysia KLCI decreased 6.77 points or 0.38% to 1,762.37 and Shanghai Composite decreased 3.61 points or 0.11% to 3,337.94.