Weak trade prevails in morning session

Indian equity benchmarks continued their weak trade in morning session on account of selling in frontline blue chip counters. The rupee opened marginally lower against the dollar as market participants remained cautious amid continuing trade talks between US and China while awaiting US April jobs data later in the day. Foreign Institutional Investors (FII) were net sellers to the tune of Rs 148.42 crore in the previous session, as per data available with stock exchanges. The sentiments were downbeat with ICRA’s report highlighting that the high quantum of impaired assets will restrict the credit growth for fiscal 2018-19 to 8 percent, and India Inc will borrow more from cheaper sources abroad. The report enlightened that despite recapitalization of the state-run lenders and private sector players upping their game with a 25 percent credit growth, the overall system credit expansion will come at 7-8 percent.

Additionally, a RBI data showed that bank deposit growth fell to a five-decade low in FY18 as the demonetization bonanza withered away and banks faced competition from other savings instruments such as mutual funds and insurance. RBI data showed that aggregate deposits in the banking system grew a mere 6.7% in 2017-18, the lowest since fiscal 1963. Select gold and jewellery stocks were trading under pressure taking cues from the World Gold Council’s (WGC) report that India’s demand for gold jewellery slumped by 12% in the first quarter from a year ago, as the rising price of the precious metal discouraged consumers and small jewellers faced issues transitioning to GST. In the first three months of 2018, jewellers sold 87.7 tonnes of gold ornaments worth Rs 24,130 crore, marking the third weakest quarter for gold demand in the country in almost a decade.

Meanwhile, the street shrugged off the report that private equity and venture capital investments in India reached $7.9 billion across 180 deals in January-March this year, the best first quarter since 2008, mainly driven by large transactions. This was also the second best quarter ever since $8.7 billion in the third quarter of 2017. Investors took note that India wants the Asian Development Bank (ADB) to increase lending to the world’s fastest growing economy to help bridge funding requirement for infrastructure development. Economic Affairs Secretary Subhash Chandra Garg would meet ADB president Takehiko Nakao where he would push for increasing the ADB’s lending commitment to India.

Traders were seen piling position in Realty, Telecom and PSU stocks, while selling was witnessed in Metal, IT and Auto sector stocks. In scrip specific developments, JSW Energy edged lower on reporting a net loss of Rs 483 crore in the fourth quarter of 2017-18 as against a net profit of Rs 24 crore a year ago, as the provisions made for loans given to Jaiprakash Power Ventures ate into the company’s profits. Total income in the quarter was Rs 1,879 crore as against Rs 1,935 crore in the corresponding quarter of the previous year.

On the global front, Asian markets were trading mostly in red. Growth in China’s service sector picked up in April as new business and employment grew at a faster rate, a private survey showed, signaling a solid rise in a sector that Beijing is counting on to maintain economic growth. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 35,000 and 10,650 levels, respectively. The market breadth on BSE was negative in the ratio of 1012:1138, while 102 scrips remained unchanged.

The BSE Sensex is currently trading at 34969.70, down by 133.44 points or 0.38% after trading in a range of 34969.70 and 35206.55. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.04%, while Small cap index was down by 0.04%.

The top gaining sectoral indices on the BSE were Realty up by 0.68%, Telecom up by 0.54%, PSU up by 0.24%, Bankex up by 0.10% and Industrials up by 0.03%, while Metal down by 0.99%, IT down by 0.74%, Auto down by 0.59%, Healthcare down by 0.58% and Energy down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 2.07%, ONGC up by 1.47%, Bharti Airtel up by 1.00%, IndusInd Bank up by 0.66% and SBI up by 0.56%.

On the flip side, Sun Pharma down by 1.89%, Bajaj Auto down by 1.71%, Asian Paints down by 1.62%, Infosys down by 1.52% and Wipro down by 1.05% were the top losers.

Meanwhile, in order to meet funding requirement for infrastructure development, the government wants to increase the Asian Development Bank’s (ADB) lending commitment to India, the world's fastest-growing major economy. Economic Affairs Secretary Subhash Chandra Garg would meet ADB president Takehiko Nakao where he would push for increasing the ADB's lending to India. Also realignment of the ADB's lending priorities in line with 'Strategy 2030' of the multilateral lender would be discussed.

India will support the ADB's plan to offer more resources for poverty mitigation and projects addressing climate change. ADB commits about $3 billion investment in a year, including that from its private sector lending arm, for India. Besides, Garg said that the $3 billion is a commitment that ADB makes and disbursement takes place subsequently based on project implementation. Stating that the ADB focuses on transport and energy sector in India, he said that the ADB is now planning to make a little more direct focus on poverty reduction and climate change.

The Secretary further said that ADB still continue to say that infrastructure is their main focus even going forward. He also said that they continue to feel ADB has lot of experience and advantage in financing infra development in the country. But, he said that going forward if they change somewhat more towards social sector, poverty reduction that realignment is fine. He added that Manila-based ADB has so far committed 209 sovereign loans totalling $35.9 billion to India.

The CNX Nifty is currently trading at 10637.85, down by 41.80 points or 0.39% after trading in a range of 10632.95 and 10700.45. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Adani Ports & Special Economic Zone up by 2.67%, ONGC up by 1.57%, GAIL India up by 0.88%, IndusInd Bank up by 0.84% and Bharti Airtel up by 0.82%.

On the flip side, Sun Pharma down by 2.24%, Bajaj Auto down by 1.86%, Infosys down by 1.68%, Asian Paints down by 1.60% and Hindalco down by 1.49% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 184.67 points or 0.61% to 30,128.70, Jakarta Composite decreased 55.47 points or 0.95% to 5,803.26, KOSPI Index decreased 15.73 points or 0.63% to 2,471.52, FTSE Bursa Malaysia KLCI decreased 7.02 points or 0.38% to 1,844.78 and Shanghai Composite decreased 4.88 points or 0.16% to 3,095.98.

On the other hand, Taiwan Weighted increased 41.06 points or 0.39% to 10,555.24.

Japan Stock Exchange was closed on account of National holiday.