Nifty, Sensex continue sluggish trade in late morning session

Domestic equity benchmarks continued their sluggish trade in late morning session, tracking weak cues from global markets after US threat of new tariffs on China stoked fears about an all-out trade confrontation between the world's two biggest economies. The investors were reacting negatively to the report highlighting that 23,000 high net worth individuals (HNIs) have left India since 2014 including 7,000 in 2017 alone, highest numbers for any country. The government has commenced a process to evaluate the “substantial task risk” such migrations pose and formulate a policy response. The domestic sentiments remained downbeat with report from RBI stating that while the global economic activity has gathered momentum, financial market volatility and potential trade wars pose a threat to outlook. The financial markets turned volatile in February-March on the back of uncertainty regarding the pace of normalisation of US monetary policy, and concerns surrounding global trade. Equity markets globally have shed most of the gains of the previous quarter in a heavy sell off in February-March. Traders failed to take support from report that the investments by private equity and venture capital funds surged 60 per cent to a record high of $ 26 billion in 2017, while the bull markets helped register highest ever exits in a year. The exits grew 60 per cent to $ 15.7 billion with the public market being the preferred mode.

On the global front, Asian markets were trading mostly in red, after Trump said that he had instructed US trade officials to consider $100 billion in additional tariffs on China. Back home, in scrip specific development, Lupin edged higher on receiving EIR for Pithampur Unit 1 facility from US Food and Drug Administration. Besides, NALCO gained on inking MoU with Eesavyasa Technology for setting up defluoridation plants in various industries for removal of fluoride to provide chemical free water for drinking.

The BSE Sensex is currently trading at 33546.36, down by 50.44 points or 0.15% after trading in a range of 33501.37 and 33623.35. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.01%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.89%, Energy up by 0.53%, Oil & Gas up by 0.51%, Realty up by 0.47% and FMCG was up by 0.19%, while Telecom down by 1.09%, TECK down by 0.78%, Metal down by 0.71%, Capital Goods down by 0.62% and IT was down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.16%, Adani Ports up by 1.12%, ICICI Bank up by 0.90%, ITC up by 0.81% and Dr Reddys Lab was up by 0.69%. On the flip side, Bharti Airtel down by 1.89%, Infosys down by 1.47%, Larsen & Toubro down by 1.17%, Axis Bank down by 1.12% and Hindustan Unilever was down by 1.03% were the top losers.

Meanwhile, citing global best practices, the Reserve Bank of India (RBI) has decided to switch back to the gross domestic product (GDP)-based measure to offer its growth estimates from the gross value added (GVA) model. GVA gives a picture of the state of economic activity from the producers' side or supply side, while the GDP model gives the picture from the consumers' side or demand perspective. From January 2015, the government had started analysing growth estimates using GVA model and had also changed the base year to 2018 from January.

Deputy governor Viral Acharya has said that the switch to GDP is mainly to conform with international practice, for ease of comparison. He also said that globally, the economic health of a country is gauged in terms of GDP. He pointed out that this approach is also followed by multilateral institutions, international analysts and investors, and primarily they all stick to this norms because it facilitates easy cross-country comparisons.

Acharya further stated that even the Central Statistical Office (CSO) has started using GDP as the main measure of economic activities since January 15 this year. So, he noted that even though there are good economic reasons to employ GVA as the supply side measure of economic activity, they have decided to switch to GDP-based model.

The CNX Nifty is currently trading at 10303.25, down by 21.90 points or 0.21% after trading in a range of 10290.85 and 10332.10. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.94%, BPCL up by 1.72%, Sun Pharma up by 1.17%, HPCL up by 1.08% and Adani Ports was up by 1.00%. On the flip side, Bharti Airtel down by 1.98%, Vedanta down by 1.76%, Infosys down by 1.73%, UPL down by 1.33% and Indusind Bank was down by 1.24% were the top losers.

Asian markets were mostly trading in red, Nikkei 225 fell 28.14 points or 0.13% to 21,617.28, KOSPI Index declined 12.63 points or 0.52% to 2,424.89, Jakarta Composite lost 2.42 points or 0.04% to 6,180.81 and FTSE Bursa Malaysia KLCI was down by 2.4 points or 0.13% to 1,833.73.

On the flip side, Hang Seng was up by 134.91 points or 0.46% to 29,653.60.