Sensex, Nifty trim losses but trade continues in red

Indian equities trimmed some of their losses but continued to trade in red in the early afternoon session on account of selling in frontline counters despite a firm trend in Asian markets. The sentiments remained on lackluster mood with the private report stating that a year after the Indian government scrapped high denomination currency notes, a wide range of indicators suggest the economy is still coming to terms with the move. It also noted that cash-dependent service sectors, like transportation, logistics, real estate and retail took a greater hit than the larger/listed entities. Further, fall in rupee value against dollar along with selling witnessed in Energy, Oil & Gas and Consumer Durables stocks, too weighed on the sentiments. However, the markets managed to pare some losses with taking support from Finance Minister Arun Jaitley’s statement that excessive cash in the economy has 'its own cost' and India is gradually moving towards digital transactions. In scrip specific development, Shri Dinesh Mills was up by around two percent after incorporating wholly owned subsidiary (WOS) company by name ‘Fernway Textiles’.

On the global front, Asian markets were trading mostly in green, with investor sentiment bolstered by the fresh record highs on Wall Street and higher commodity prices, including the overnight surge in crude oil prices after a purge of royal family's political rivals in Saudi Arabia. Back home, the BSE Sensex is currently trading at 33680.85, down by 50.34 points or 0.15% after trading in a range of 33582.38 and 33865.95. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.43%, while Small cap index was down by 0.24%.

The top gaining sectoral indices on the BSE were IT up by 2.55%, TECK up by 1.86% and FMCG up by 0.15%, while Energy down by 1.55%, Oil & Gas down by 1.01%, Consumer Durables down by 0.88%, PSU down by 0.77% and Basic Materials down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.88%, TCS up by 2.22%, Wipro up by 1.74%, Kotak Mahindra Bank up by 1.39% and Mahindra & Mahindra up by 0.64%. On the flip side, Reliance Industries down by 2.31%, Asian Paints down by 1.63%, Bharti Airtel down by 1.43%, Bajaj Auto down by 1.38% and Tata Motors - DVR down by 1.27% were the top losers.

Meanwhile, terming the medium-term outlook for logistics firms in India as positive, domestic rating agency, ICRA in its latest report has said that the country’s logistics industry is likely to grow at a rate of 9-10 percent annually. It also said that while there have been fluctuations in the economy and freight demand due to Goods and Services Tax (GST) implementation, the impact of the same would be transitory and would be corrected over the near term. Besides, it believes that the industry would continue to benefit from recovery in the Indian economy and revival in industrial output, while supply side factors like improvement in logistics infrastructure and emergence of logistics startups would offer further impetus to growth.

As per the report, analysis of the Q1 FY18 performance of key listed logistics companies indicated that their revenue growth at 6.2 percent (on Y-o-Y basis) outpaced the real GDP growth, much of it was supported by increase in freight rates since the latter half of FY 2017, while volume growth remained flat for most of the companies. In addition, it noted that companies have benefited from the underlying sectors such as automobile, consumer durables etc. which have bucked the trend of economic slowdown. From a profitability perspective, it stated that while the aggregate operating profit margins improved marginally on a sequential basis to 9.7 percent during Q1 FY18, there was pressure on the margins on a Y-o-Y basis.

The rating agency pointed out that although the manufacturing activity has declined further in July 2017 post GST implementation, there has been a gradual improvement in most of economic indicators over the past couple of months, which suggest the outlook for logistics companies is likely to turn favourable going forward. As per the report, the road freight rates also followed a similar trend, with the decline in industrial activity and lack of freight demand resulting in a sharp decline of freight rates in July 2017, and subsequent recovery in August 2017 as the industrial activity and freight demand improved.

The CNX Nifty is currently trading at 10435.05, down by 16.75 points or 0.16% after trading in a range of 10394.65 and 10485.75. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 3.56%, Infosys up by 2.86%, TCS up by 2.68%, Tech Mahindra up by 2.61% and Zee Entertainment up by 2.22%. On the flip side, Indian Oil Corporation down by 2.35%, Yes Bank down by 2.19%, Reliance Industries down by 2.08%, Asian Paints down by 1.75% and BPCL down by 1.64% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.98 points or 0.17% to 1,745.27, Jakarta Composite was up by 8.22 points or 0.14% to 6,059.04, Shanghai Composite rose 19.26 points or 0.57% to 3,407.44, Taiwan Weighted added 54.15 points or 0.5% to 10,840.34, Nikkei 225 surged 389.25 points or 1.73% to 22,937.60 and Hang Seng increased 402.37 points or 1.41% to 28,999.17.

On the flip side, KOSPI Index was down by 3.97 points or 0.16% to 2,545.44.