Markets slip into red terrain; Sensex plunges around 100 points

The local equity benchmarks erased all of their gains in late afternoon session to slip into red territory, with the Sensex and Nifty losing around 100 and 20 points, respectively. Traders turned cautious with the private report that CPI inflation is expected to rise over the next few months and average close to 4.7% in 2018-19, driving Reserve Bank of India to keep key policy rates on hold in the coming financial year. Anxiety prevailed among investors with another report stating that India’s monsoon rains are expected to be slightly below normal this year. Besides, selling pressure appeared in IT, TECK and Capital Goods stocks, also weighed on the domestic sentiments. The market participants awaited Wholesale Price Index (WPI) data which is slated to be released tomorrow. Further, the positive economic data such as IIP and CPI, failed to provide further support to the markets. India’s industrial output surged to 7.5% in the month of January 2018, as compared to 3.5% in the same month of the previous year and 7.1% in December 2017, while the retail inflation cooled down to a 4-month low of 4.44% in the month of February 2018, as compared to 5.07% in January. However, the broader markets managed to keep their heads above neutral lines in late noon deals, while Realty remained top gainer on the BSE.

On the global front, European markets were trading mostly in green, as investors monitored corporate earnings and awaited the release of US inflation data later in the day. Asian markets were trading in green. Back home, in scrip specific development, Lupin was trading in green on launching its Tydemy Tablets in United States having received an approval from the United States Food and Drug Administration (USFDA) earlier.

The BSE Sensex is currently trading at 33822.71, down by 95.23 points or 0.28% after trading in a range of 33736.67 and 34077.32. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.68%, while Small cap index was up by 0.88%.

The top gaining sectoral indices on the BSE were Realty up by 1.51%, Telecom up by 1.23%, Oil & Gas up by 1.18%, PSU up by 1.16% and Consumer Durables up by 1.11%, while IT down by 1.60%, TECK down by 1.20%, Capital Goods down by 0.22% and Auto down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.79%, Sun Pharma up by 1.62%, Wipro up by 1.46%, Dr. Reddy’s Lab up by 1.16% and SBI up by 1.01%. On the flip side, TCS down by 5.04%, Kotak Mahindra Bank down by 1.40%, Coal India down by 1.16%, Maruti Suzuki down by 1.03% and NTPC down by 0.94% were the top losers.

Meanwhile, highlighting need to look at the deeper issue of governance at the banks, the International Monetary Fund’s (IMF) deputy managing director Tao Zhang has said that banking reforms like insolvency code and recapitalisation are not enough for a lasting impact and they should be accompanied by governance reforms particularly for public sector banks (PSBs).

IMF official also expressed need to improve the internal controls, as it is crucial not only for improving banks but also financial stability. He also suggested banks to improve their balance sheets on a priority basis, stressing that the asset quality situation of the domestic banks has deteriorated compared to their peers elsewhere.

Tao Zhang further noted that Indian financial regulators should focus on monitoring and regulating services instead of only institutions and added that the country should focus on rapidly developing the sector so that efficiencies get enhanced but also safeguard against risks and also fight misconduct. He said the things like big data, artificial intelligence, cloud computing, smart contracts and blockchain can help the sector to improve its efficiency.

The CNX Nifty is currently trading at 10402.45, down by 18.95 points or 0.18% after trading in a range of 10377.85 and 10478.60. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were HPCL up by 4.02%, BPCL up by 3.59%, Bharti Infratel up by 2.12%, Indian Oil Corporation up by 1.91% and Axis Bank up by 1.82%. On the flip side, TCS down by 5.38%, HCL Tech. down by 1.74%, Kotak Mahindra Bank down by 1.58%, Coal India down by 1.23% and Maruti Suzuki down by 1.08% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.45 points or 0.02% to 1,861.67, Hang Seng increased 7.12 points or 0.02% to 31,601.45, KOSPI Index increased 10.37 points or 0.42% to 2,494.49, Taiwan Weighted increased 93.53 points or 0.85% to 11,095.63 and Nikkei 225 increased 144.07 points or 0.66% to 21,968.10. On the flip side, Jakarta Composite decreased 90 points or 1.38% to 6,410.69 and Shanghai Composite decreased 16.46 points or 0.49% to 3,310.24.

European markets were trading mostly in green; Germany’s DAX increased 15.28 points or 0.12% to 12,433.67 and France’s CAC increased 18.93 points or 0.36% to 5,295.64. On the flip side, UK’s FTSE 100 decreased 3.6 points or 0.05% to 7,211.16.