Markets continue sluggish trade; Sensex plunges over 200 points

Key Indian equity benchmarks continued their sluggish trade in late morning session, with Sensex and Nifty falling more than 200 and 50 points, respectively. Weak cues from Asian markets along with widening trade deficit, were dragging the indices lower. India’s trade deficit for February 2018 was estimated at $11,979.21 million, 25.8% higher than the $9,521.73-million deficit reported during February 2017. Sentiments got hit with a report stating that India's public debt rose to Rs 66.61 lakh crore at the end of December 2017, representing a quarter-on-quarter increase of 1.22 percent. Traders remained cautious with the Federation of Indian Export Organisations’ (FIEO) statement that the US’ decision to challenge Indian export subsidy schemes at World Trade Organisation (WTO) is an area of grave concern for domestic traders and the government should phase out these incentives. Adding some concerns, the World Bank has observed that the goods and services tax (GST) regime in India, which was rolled out in July last year, is relatively more complex compared with similar taxes on value added across other countries.

On the global front, Asian markets were trading mostly in red, as worries about trade wars and news that special counsel Robert Mueller has subpoenaed US President Donald Trump's businesses weighed on investors’ sentiments. Adding to the growing political uncertainty in the US, the Washington Post reported that Trump has decided to remove White House national security adviser H.R. McMaster from the administration. Back home, in scrip specific development, Bharat Financial Inclusion was trading higher after the company completed its third securitization transaction in FY18 of Rs 450.82 crore.

The BSE Sensex is currently trading at 33475.38, down by 210.16 points or 0.62% after trading in a range of 33465.44 and 33691.32. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.07%, while Small cap index was up by 0.25%.

The top gaining sectoral indices on the BSE were Realty up by 0.26%, Telecom up by 0.19%, Consumer Disc up by 0.03% and Capital Goods up by 0.01%, while Energy down by 1.74%, Oil & Gas down by 1.60%, Metal down by 1.46%, PSU down by 0.78% and FMCG down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.78%, Power Grid Corporation up by 1.10%, Yes Bank up by 0.80%, Indusind Bank up by 0.50% and SBI up by 0.28%. On the flip side, Coal India down by 5.92%, Tata Motors down by 2.10%, ONGC down by 1.65%, Tata Motors - DVR down by 1.58% and Reliance Industries down by 1.27% were the top losers.

Meanwhile, the Public Debt (excluding liabilities under the Public Account) of the central government increased to Rs 66.61 lakh crore in the October-December quarter (Q3FY18), up by 1.22% over the previous quarter. According to the report on debt management released by the finance ministry, the government’s debt was Rs 65.80 lakh crore at the end of the previous quarter of the fiscal ended September. It noted that internal debt constituted 93.1% of public debt as of December 2017, while marketable securities accounted for 82.6%.

As per the report, during the third quarter, the government issued dated securities worth Rs 1,64,000 crore, lower than Rs 1,89,000 crore in the second quarter of fiscal 2016-17, thus leading to cumulative issuance of Rs 5,21,000 crore (87.0% of 2017-18 RE) among others. Besides, it highlighted that the weighted average maturity (WAM) and weighted average yield (WAY) of dated securities issued during Q3 of FY18 was 14.09 years and 7.04%, respectively.

The report further pointed out that the liquidity conditions in the economy remained comfortable and continue to be in surplus mode during the quarter. It noted that the cash position of the government during the third quarter was also comfortable and as a result the government did not resort to WMA from the Reserve Bank of India (RBI). It added that the trading volume of government securities on an outright basis during the Q3 FY18, also witnessed a decline of 21.6% over the previous quarter.

The CNX Nifty is currently trading at 10294.55, down by 65.60 points or 0.63% after trading in a range of 10293.05 and 10346.30. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 1.76%, Aurobindo Pharma up by 1.75%, Zee Entertainment up by 1.51%, UPL up by 1.23% and Bharti Infratel up by 1.15%. On the flip side, Coal India down by 5.89%, BPCL down by 3.13%, Indian Oil Corporation down by 2.79%, Tata Motors down by 2.19% and HPCL down by 1.91% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 130.05 points or 0.6% to 21,673.90, Jakarta Composite decreased 39.06 points or 0.62% to 6,282.84, Hang Seng decreased 4.76 points or 0.02% to 31,536.34, FTSE Bursa Malaysia KLCI decreased 3.48 points or 0.19% to 1,841.79 and KOSPI Index decreased 1.86 points or 0.07% to 2,490.52.

On the flip side, Shanghai Composite increased 2.26 points or 0.07% to 3,293.37 and Taiwan Weighted increased 9.25 points or 0.08% to 11,027.70.