Weak global cues drag markets lower in early deals

Extending their previous session’s somberness, Indian equity benchmarks are trading in red terrain in early deals on Wednesday amid negative global cues. Sentiments also remained downbeat after trade deficit widening to its highest in nearly three years in October, as export growth contracted for the first time after more than a year. The trade deficit widened to $14.02 billion last month from $8.98 billion in September. Merchandise exports for October fell 1.12 percent from a year earlier to $23.1 billion, dropping for the first time since August 2016. Traders failed to get any sense of relief with private report stating that the decision to lower GST (goods and services tax) rates on over 200 items could help pull down retail inflation by 20 basis points from the current levels driven by lower food and beverage prices.

Global cues too remained somber with most of the regional peers trading in red at this point of time, as concern grows that stocks have become too expensive amid uncertainty about US tax reform. The US markets despite coming off their worst level of the day ended in red in the last session.

Back home, private equity (PE) investors announced transactions of $16.40 billion for January- October, a 55 per cent jump over the year-ago period, driven by big-ticket deals. For October alone, the deal value read $1.6 billion. On the sectoral front, realty sector stocks remained in action with industry body Assocham stating that if the real estate sector is brought within the ambit of GST, it should be along with the stamp duty and moderate rate, and should not add to the cost of housing and construction.

The BSE Sensex is currently trading at 32851.99, down by 89.88 points or 0.27% after trading in a range of 32828.87 and 32944.94. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index dropped 0.25%, while Small cap index was down by 0.50%.

The few gaining sectoral indices on the BSE were Capital Goods up by 0.32%, Oil & Gas up by 0.09% and IT was up by 0.01%, while Metal down by 2.42%, Basic Materials down by 1.49%, Consumer Durables down by 1.09%, Power down by 1.07% and Utilities was down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.02%, HDFC up by 0.71%, TCS up by 0.69%, Asian Paints up by 0.41% and Hero MotoCorp up by 0.39%. On the flip side, Sun Pharma down by 2.42%, Tata Steel down by 1.94%, Coal India down by 1.83%, ONGC down by 1.70% and NTPC down by 1.55% were the top losers.

Meanwhile, with an aim to promote exports, Commerce and Industry Minister Suresh Prabhu has said that the mid-term review of the foreign trade policy (FTP) will be released soon. He added that the commerce ministry is working on country specific strategy to boost India's trade.

Prabhu also said that India’s economic growth would get boost with promotion of international trade. He said ‘we would like to increase our exports but also would not discourage imports. We will like to have an international trade as a thrust for developing India’s GDP and economy’. He added that the ministry is also helping exporters in resolution of issues related with the Goods and Services Tax (GST).

The five-year foreign trade policy (2015-20) provides a framework for boosting exports of goods and services besides creation of employment and increasing value addition. On the redevelopment plan of the Pragati Maidan as an International Exhibition-cum- Convention Centre, the minister said within two years, a world-class facility will be developed for convention and exhibitions.

The CNX Nifty is currently trading at 10156.85, down by 29.75 points or 0.29% after trading in a range of 10147.45 and 10175.45. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.37%, HPCL up by 2.16%, Indian Oil Corporation up by 1.40%, Ambuja Cement up by 1.35% and Tech Mahindra up by 1.04%. On the flip side, Vedanta down by 3.16%, Hindalco down by 2.89%, Sun Pharma down by 2.23%, Tata Steel down by 1.86% and Indiabulls Housing down by 1.68% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 317.46 points or 1.42% to 22,062.55, Hang Seng decreased 214.68 points or 0.74% to 28,937.44, Taiwan Weighted shed 67.51 points or 0.63% to 10,619.67, Shanghai Composite dropped 24.51 points or 0.71% to 3,405.04, KOSPI Index slipped 5.79 points or 0.23% to 2,520.85 and FTSE Bursa Malaysia KLCI was down by 2.51 points or 0.14% to 1,731.10.

On the flip side, Jakarta Composite was up by 7.28 points or 0.12% to 5,995.57.