Benchmarks trade with caution in morning deals

Indian equity benchmarks made a cautious start and are trading flat in early deals on Monday as traders remained concerned on Assocham’s report that the escalation of global trade protectionist measures into a full-scale global trade war will damage the Indian economy as well. A full-scale global trade war will impact the country’s exports and enlarge its current account deficit (CAD). Ficci has said India should play a proactive role in defusing the emerging possibilities of a global trade war that can derail the positive outlook in the world trade. Sentiments also remained dampened on report that the country’s foreign exchange reserves decreased marginally by $152.4 million to $421.334 billion in the week to March 16, on account of a fall in foreign currency assets. In the previous week, the reserves had increased by $728.9 million to $421.487 billion. The reserves had touched a life-time high of $421.914 billion on February 9, FY18.

Global cues too remained weak with Asian markets trading mostly lower on Monday, following a global sell-off late last week amid fears that rising tensions between the United States and China could lead to a full-blown trade war. The US markets ended their worst week in more than two years on Friday after China threatened to respond in kind to President Trump’s imposition of $60 billion in tariffs on Chinese imports.

Back home, former Reserve Bank of India Governor Raghuram Rajan said the global economic recovery could be hit if the trade war between the US and China escalate. In scrip specific development, Tata Chemicals gained on getting nod for Scheme of Amalgamation with WOS, while Cipla surges on launching authorized generic of Aloxi.

The BSE Sensex is currently trading at 32599.70, up by 3.16 points or 0.01% after trading in a range of 32521.40 and 32659.80. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.07%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.04%, Realty up by 0.59%, Capital Goods up by 0.49%, Bankex up by 0.48% and FMCG was up by 0.21%, while Oil & Gas down by 1.31%, IT down by 0.77%, TECK down by 0.65%, Utilities down by 0.51% and PSU was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.24%, Yes Bank up by 1.15%, Indusind Bank up by 1.13%, ICICI Bank up by 1.09% and Larsen & Toubro up by 0.76%. On the flip side, Wipro down by 2.24%, Hero MotoCorp down by 1.29%, Tata Motors down by 1.13%, Tata Motors - DVR down by 0.96% and TCS down by 0.89% were the top losers.

Meanwhile, with India’s exports taking a hit, the industry chamber Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has said that the country’s economy may be impacted if global trade war escalates further into a ‘full-scale global trade war’. The Industry body added that it may reflect in enlarging the country’s current account deficit (CAD) and it will impact Gross Domestic Product (GDP) growth as well.

ASSOCHAM stated that tensions in the market look quite justified, as Trump's move to levy tariff on trading partners could lead to a further retaliation against the US. Though, it said that the measures taken by the US may not have a direct impact on India but the collateral damage could be in the form of adverse impact on the overall sentiment.

Besides, the chamber suggested the government to formulate a backup plan which should include opening bilateral trade with key trading partners, while taking precautions that we remain WTO compliant. It further said that if market confidence is eroded, there would be an outflow of portfolio investment taking a toll on the dollar rates.

The CNX Nifty is currently trading at 9983.45, down by 14.60 points or 0.15% after trading in a range of 9975.80 and 10010.75. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 2.04%, SBI up by 1.26%, Indusind Bank up by 1.17%, Yes Bank up by 1.12% and ICICI Bank up by 0.98%. On the flip side, HPCL down by 3.38%, GAIL India down by 3.32%, BPCL down by 2.47%, Wipro down by 2.16% and Indian Oil Corporation down by 1.98% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 168.59 points or 0.56% to 30,140.70, Nikkei 225 shed 61.61 points or 0.3% to 20,556.25, Shanghai Composite tumbled 51.85 points or 1.64% to 3,100.91, Jakarta Composite decreased 33.38 points or 0.54% to 6,177.32, Taiwan Weighted slipped 10.27 points or 0.09% to 10,813.06 and FTSE Bursa Malaysia KLCI was down by 7.92 points or 0.42% to 1,857.30.

On the flip side, KOSPI Index was up by 8.3 points or 0.34% to 2,425.06.