Lackluster trade persists; Banking, IT stocks fall

Key Indian benchmarks continued their lackluster trade in late morning session, with the Sensex falling over 500 points, on the back of weak trend at other Asian markets. Continuous selling pressure in Banking and IT stocks, kept the markets under pressure. Besides, the broader markets were also trading lower, following sluggish larger peers. Anxiety spread among the investors with the report that foreign portfolio investors have turned wary on Indian shares again owing to the recent global market sell-off triggered by rising bond yields in developed markets including in the US and the eurozone. FPIs have sold shares worth Rs 3,665.6 crore in the domestic stock market (including provisional data of Wednesday and Thursday) in February after pumping close to Rs 13,000 crore into Indian equities in January. Traders overlooked a private report stating that fears of the Reserve Bank of India going for a rate hike are overdone and there is still room for a 25 bps rate cut in the August monetary policy review, provided rains are normal. 

On the sectoral front, airline companies stocks such as Jet Airways (India) and SpiceJet were trading in green, amid report that the country is likely to have 855 million air travellers in 2030-31, indicating a three-fold increase in the number of air travellers which was 265 million in 2016-2017. As per the data shared by the government, the growth in air traffic over a period of around 15 years will also be more than double the existing passenger handling capacity of airports in the country, which is at 334 million.

On the global front, Asian markets were trading in red, after the overnight plunge on Wall Street sent the Dow Jones Industrial Average into correction territory. Worries about rising US bond yields and higher interest rates have caused stocks to tumble from record highs over the past week. Back home, in scrip specific development, Coal India was trading higher after the company’s sales to power sector stood at 371.8 million tonnes (MT) of coal in the last 10 months ending January, showing an increase of 6.8% compared to the corresponding period last year.

The BSE Sensex is currently trading at 33873.15, down by 540.01 points or 1.57% after trading in a range of 33849.65 and 34017.73. There were 3 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.89%, while Small cap index was down by 0.67%.

The top losing sectoral indices on the BSE were Bankex down by 2.07%, IT down by 1.54%, TECK down by 1.54%, Oil & Gas down by 1.40% and Capital Goods down by 1.36%, while there were no gaining sectoral indices on the BSE.

The few gainers on the Sensex were Tata Steel up by 0.66%, Asian Paints up by 0.32% and Coal India up by 0.12%. On the flip side, ICICI Bank down by 3.26%, Axis Bank down by 2.76%, Adani Ports & SEZ down by 2.51%, Yes Bank down by 2.16% and HDFC down by 2.05% were the top losers.

Meanwhile, the commerce ministry has asked its finance counterpart to increase the rate of support under the interest subvention scheme to 5 percent from the existing 3 percent on credit provided to exporters. Director General of Foreign Trade (DGFT) Alok Vardhan Chaturvedi has said that the government has increased allocations towards interest equalisation scheme in the Budget to Rs 2500 crore from Rs 1,000 crore earlier for 2018-19 to encourage exports.

Commerce and Industry Minister Suresh Prabhu has said that the cost of capital in India is much higher as compared to other countries. Besides, he pointed out that infrastructure inefficiencies and logistics costs too are high as compared to India’s competitors including Singapore and Malaysia. He noted that products being sold in global markets need to be at a level playing field. He added that interest subsidy to some extent neutralises infrastructure inefficiencies.

The minister further said that the incentives for exports would add up to over Rs 1 lakh crore, including the duty forgone on schemes such as Merchandise Exports from India Scheme (MEIS) and advance authorization. Besides, he noted that work is in progress to see ways to increase exports of goods and services to $1 trillion in the coming years. On whether increase in customs duties on certain items could be seen as a protectionist measure, he said that it is not, and India is one of the most open economies in the world.

The CNX Nifty is currently trading at 10405.65, down by 171.20 points or 1.62% after trading in a range of 10398.20 and 10453.90. There were 4 stocks advancing against 45 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Tata Steel up by 0.88%, Lupin up by 0.80%, Asian Paints up by 0.25%, Coal India up by 0.22% and Power Grid Corporation up by 0.00%. On the flip side, Aurobindo Pharma down by 3.17%, ICICI Bank down by 3.00%, Axis Bank down by 2.74%, Adani Ports & SEZ down by 2.69% and Indiabulls Housing Finance down by 2.61% were the top losers.

All the Asian markets were trading in red; Hang Seng decreased 1082.38 points or 3.55% to 29,368.89, Nikkei 225 decreased 641.16 points or 2.93% to 21,249.70, Shanghai Composite decreased 157.73 points or 4.84% to 3,104.32, Taiwan Weighted decreased 156.77 points or 1.49% to 10,371.75, Jakarta Composite decreased 72.13 points or 1.1% to 6,472.51, KOSPI Index decreased 39.12 points or 1.62% to 2,368.50 and FTSE Bursa Malaysia KLCI decreased 15.86 points or 0.86% to 1,823.58.