Weak trade persist in morning session

Indian equity benchmarks continued their weak trade in morning session tracking subdued global cues following correction in metals and crude oil prices. Oil prices tumbled continuing Tuesday’s slide after the International Energy Agency cast doubts over the past months’ narrative of tightening fuel markets. The rupee was trading higher against dollar in early trade on account of selling of American currency by banks and exporters. Foreign Portfolio Investors stood net sellers in domestic equity markets Tuesday and sold shares worth Rs 135.73 crore with gross purchases and gross sales of Rs 4,632.82 crore and Rs 4,768.55 crore, respectively. The sentiments were dampened after trade deficit widened 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% from a year earlier to $23.1 billion, dropping for the first time since August 2016. The street failed to draw solace from ASSOCHAM report that while there has been a temporary slowdown after GST implementation (in July 2017), a consensus view is that India is poised for a sustainable growth in the near future. The report maintained that GST will have a significant impact on all aspects of the businesses operating in the country including - supply chain, logistics, cash flows and transactions.

Traders were seen piling up position in Capital Goods, Oil & Gas and IT stocks, while selling was witnessed in Metal, Basic Materials and FMCG sector stocks. IT stocks were buzzing in today’s trade on Gartner report that technology spending in India is expected to rise 9.2% to reach $87.1 billion in 2018, led by spending on expensive devices such as the iPhoneX and laptop upgrades, which continue to drive the majority of overall IT spending in India. In scrip specific development, Bank of Baroda was trading in green as the overall bad loans position has eased and the bank forecast better days ahead if the National Company Law Tribunals delivers on recovery from defaulters. It reported 36% fall in net profit in the September quarter as its provisions for loan losses surged and income from treasury fell.

On the global front, Asian markets were trading mostly in red, as the cautious sentiment from the last session continued, with energy-related plays in the region falling on weakening oil prices. Japan’s economy grew faster than expected in the third quarter due to strong exports, posting the longest period of uninterrupted growth in more than a decade. The economy expanded at a 1.4% annualized rate in July-September, slightly above the median estimate for annualized growth of 1.3%. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 32,900 and 10,150 levels respectively. The market breadth on BSE was negative in the ratio of 902:1339, while 105 scrips remained unchanged.

The BSE Sensex is currently trading at 32829.86, down by 112.01 points or 0.34% after trading in a range of 32828.76 and 32944.94. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.09%, while Small cap index was down by 0.26%.

The only gaining sectoral indices on the BSE were Capital Goods up by 0.22%, Oil & Gas up by 0.05% and IT up by 0.04%, while Metal down by 2.10%, Basic Materials down by 1.33%, FMCG down by 1.16%, Power down by 0.89% and Utilities down by 0.89% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.08%, Asian Paints up by 0.71%, TCS up by 0.68%, Larsen & Toubro up by 0.65% and Bajaj Auto up by 0.57%.

On the flip side, Sun Pharma down by 2.23%, ONGC down by 2.14%, Coal India down by 1.88%, NTPC down by 1.70% and ITC down by 1.62% were the top losers.

Meanwhile, amid the demand to bring realty sector under the ambit of Goods and Services Tax (GST), the industry body, The Associated Chambers of Commerce and Industry of India (Assocham) has said 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.

Assocham secretary general D S Rawat said that realty sector under the GST without stamp duty and other levies like property tax will serve no purpose and instead would lead to more confusion. He added that if the sector has to be given a boost, it should be brought under GST along with stamp duty with the rate being moderate and should not add to the cost of the housing or construction.

He further said that the Centre is certainly in favour of realty under the Goods and Services Tax (GST) but the states have to be brought on board because there are revenue implications. Talking on other exempted articles like petroleum, electricity and alcohol, he said they should be brought under the GST. He said ideally all these sectors, be it real estate, petroleum, electricity and alcohol, should be brought under the GST. But, expectations have to be matched with what is doable at this point of time.

The CNX Nifty is currently trading at 10146.80, down by 39.80 points or 0.39% after trading in a range of 10141.40 and 10175.45. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.34%, HPCL up by 2.19%, Ambuja Cement up by 1.27%, Indian Oil up by 1.21% and Tech Mahindra up by 0.97%.

On the flip side, Hindalco down by 3.01%, Vedanta down by 2.56%, ONGC down by 2.42%, Sun Pharma down by 2.42% and Indiabulls Housing Finance down by 2.26% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 317.87 points or 1.42% to 22,062.14, Hang Seng decreased 241.34 points or 0.83% to 28,910.78, Taiwan Weighted decreased 46.74 points or 0.44% to 10,640.44, Shanghai Composite decreased 28.42 points or 0.83% to 3,401.13, KOSPI Index decreased 6.23 points or 0.25% to 2,520.41 and FTSE Bursa Malaysia KLCI decreased 1.8 points or 0.1% to 1,731.81.

On the other hand, Jakarta Composite increased 8.23 points or 0.14% to 5,996.52.