Markets extend losses in late morning session

Key Indian equity benchmarks extended their losses in late morning session, with the Sensex and the Nifty falling around 80 and 30 points, respectively. Selling pressure in Oil & Gas, Energy and Banking stocks along with weak cues from Asian markets also dragged the indices lower. Sentiments were downbeat, as Industry bodies said that RBI's decision to ban Letters of Undertaking (LOUs) for trade credit for imports will have a disruptive impact, at least in the immediate term, as small businesses would require higher working capital. Some concerns also came with a report stating that the US challenged Indian export subsidy schemes at the World Trade Organisation, saying these programmes harm American workers by creating an ‘uneven’ playing field. Besides, in a report Fitch predicts the Indian economy to clock a growth rate of 6.5 percent this fiscal, a tad lower than official estimates by the Central Statistics Office (CSO) of 6.6 percent, which added to the losses.

On the global front, Asian markets were trading mostly in red, following the weak cues overnight from Wall Street as mounting concerns over trade tensions and disappointing US retail sales data weighed on investor sentiment. Back home, in scrip specific development, Genus Power Infrastructures gained the traction after the company won an order from Jharkhand Bijli Vitran Nigam (JBVNL) for supply, Installation, Commissioning, Data Collection, Report Generation and Annual Maintenance contract for 5 years of around 10,000 Distribution Transformer Meters with an inbuilt CT & Modem feature.

The BSE Sensex is currently trading at 33752.85, down by 82.89 points or 0.24% after trading in a range of 33733.50 and 33866.28. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.70%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.59%, Realty up by 0.50%, Consumer Durables up by 0.42%, Consumer Disc up by 0.34% and Industrials up by 0.24%, while Oil & Gas down by 0.83%, Energy down by 0.62%, Bankex down by 0.48%, Metal down by 0.26% and PSU down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.06%, Coal India up by 0.85%, Wipro up by 0.84%, Hero MotoCorp up by 0.72% and Mahindra & Mahindra up by 0.72%. On the flip side, ICICI Bank down by 1.52%, Yes Bank down by 1.19%, NTPC down by 0.88%, Reliance Industries down by 0.78% and Tata Motors - DVR down by 0.71% were the top losers.

Meanwhile, terming Indian economy as credible, the World Bank in its latest biannual publication has projected the country’s gross domestic product (GDP) growth at 7.3% for the next fiscal year 2018-19 (FY19) and added that growth will accelerate further to 7.5% in FY20. It said that growth will be supported by private consumption, investment, and exports. It also foresees that Indian economy will grow at the rate of 6.7% in the current fiscal year 2017-18 (FY18).

The report titled ‘India Development Update: India's Growth Story’ has observed that a growth of over 8% will require continued reform and a widening of their scope aimed at resolving issues related to credit and investment, and enhancing competitiveness of exports. It also said that the country’s GDP growth saw a temporary dip in the last two quarters of FY17 and the first quarter of FY18 due to demonetisation and disruptions surrounding the initial implementation of Goods and Services Tax (GST). It added that the Indian economy is expected to recover from the demonetisation and GST impact, and growth should revert slowly to a level consistent with its proximate factors -- that is, to about 7.5% a year.

The report further stated that India’s long-term growth has become more steady, stable, diversified and resilient. In the long-run, for higher growth to be sustainable and inclusive, India needs to use land and water, which are increasingly becoming scarce resources, make growth more inclusive and strengthen its public sector to meet challenges of a fast growing, globalizing and increasingly middle-class economy. However, it pointed out that financial markets’ liquidity may tighten, which may pose certain short-run risks for the economy. Besides, if investment, exports, credit do not gain sufficient momentum, it may not do much to accelerate GDP growth.

The CNX Nifty is currently trading at 10384.15, down by 26.75 points or 0.26% after trading in a range of 10376.95 and 10420.00. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.27%, Bajaj Finance up by 1.05%, Coal India up by 1.04%, Dr. Reddy’s Lab up by 1.03% and Mahindra & Mahindra up by 0.76%. On the flip side, Indian Oil Corporation down by 2.39%, ICICI Bank down by 1.44%, Yes Bank down by 1.22%, Hindalco down by 1.06% and Zee Entertainment down by 1.01% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 54.71 points or 0.17% to 31,380.30, Jakarta Composite decreased 33.43 points or 0.52% to 6,349.19, Taiwan Weighted decreased 20.35 points or 0.18% to 11,018.45, Shanghai Composite decreased 16.6 points or 0.5% to 3,274.78 and FTSE Bursa Malaysia KLCI decreased 4.72 points or 0.25% to 1,852.34.

On the flip side, KOSPI Index increased 10.43 points or 0.42% to 2,496.51 and Nikkei 225 increased 17.32 points or 0.08% to 21,794.61.