Indian equities add losses; Telecom stocks continue to fall

Adding some losses, Indian equity benchmarks continued to trade lower in early afternoon session, as selling momentum in the equities persisted. Sentiment on the street weakened further despite data indicating that India’s annual wholesale price inflation eased in February for the third straight month after touching an eight-month high in November, helped by a softer rise in food and fuel prices. February WPI Inflation at 2.48 percent versus 2.84 percent MoM. Investors remained concerned with a report highlighting that the Reserve Bank of India (RBI) is unlikely to reduce key policy rates in 2018 despite a dip in retail inflation in February. Risks like the higher minimum support prices (MSPs) for food grains promised in the budget, according to them, can push up the inflation in the next fiscal year. Moreover, negative global cues along with continuous selling in Telecom, Energy and Banking stocks, pulled the equity indices lower. In scrip specific development, Ortel Communications was up by around five and half percent on planning to raise funds worth Rs 8.75 crore.

On the global front, Asian markets were trading in red, following the sacking of US Secretary of State Rex Tillerson and amid talk of potential US tariffs against China. Back home, the BSE Sensex is currently trading at 33621.23, down by 235.55 points or 0.70% after trading in a range of 33618.96 and 33800.04. There were 4 stocks advancing against 27 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 0.25%.

The only gaining sectoral indices on the BSE were Consumer Durables up by 0.04% and Healthcare up by 0.02%, while Telecom down by 0.97%, Energy down by 0.93%, Oil & Gas down by 0.83%, Bankex down by 0.80% and Realty down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.39%, Maruti Suzuki up by 0.42%, Power Grid up by 0.28% and Hindustan Unilever up by 0.18%. On the flip side, Hero MotoCorp down by 1.93%, ICICI Bank down by 1.55%, Adani Ports & SEZ down by 1.48%, Bajaj Auto down by 1.18% and Kotak Mahindra Bank down by 1.14% were the top losers.

Meanwhile, days after the Trump administration hiked import tariffs on steel and aluminium products, the Commerce and Industry Minister Suresh Prabhu has said that India will take up this issue with the US authorities. He said that the measures are unfortunate and they will take up these issues with US counterpart and added that he will try to explain to them the necessity for working together through multilateral trading platform as well as bilateral trading platform.

Prabhu further stated that the idea of the meeting is to create an atmosphere, so that this negativity around global trade and multilateral trading system should reduce and all the countries should benefit from open trade. As India exports steel and aluminium products worth about $1.3 billion a year to America, the ministry is studying the impact of duty hike. Exports of these products to the American market will become expensive and could impact the competitiveness of domestic items, with hike in tariffs by the US government.

Major steel exporters to the US comprise Canada, Brazil, South Korea, Mexico and Russia which together account for close to 60% of the shipments, while India exported close to 0.9 MT steel to America in 2017. Besides, triggering fears of a global trade war, the US President Donald Trump had signed two proclamations that impose 25% tariff on imported steel and 10% on aluminium, but exempted Canada and Mexico and offered the possibility of excluding other allies, backtracking from an earlier no-exceptions stance.

The CNX Nifty is currently trading at 10341.65, down by 85.20 points or 0.82% after trading in a range of 10337.55 and 10407.05. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.50%, Ultratech Cement up by 1.39%, Yes Bank up by 1.39%, Ambuja Cement up by 0.92% and HCL Tech. up by 0.61%. On the flip side, Bharti Infratel down by 2.81%, Indian Oil Corporation down by 2.27%, Hero MotoCorp down by 2.06%, Adani Ports & SEZ down by 1.87% and ICICI Bank down by 1.86% were the top losers.

All the Asian markets were trading in red; Hang Seng decreased 404.65 points or 1.28% to 31,196.80, Nikkei 225 shed 190.81 points or 0.87% to 21,777.29, Taiwan Weighted was down by 56.83 points or 0.51% to 11,038.80, Jakarta Composite dropped 28.31 points or 0.44% to 6,384.54, KOSPI Index was down by 8.41 points or 0.34% to 2,486.08, Shanghai Composite decreased 8.39 points or 0.25% to 3,301.85 and FTSE Bursa Malaysia KLCI dipped 6.78 points or 0.36% to 1,857.25.