Dalal Street witnesses selling pressure; slips in red terrain

Dalal Street witnessed selling pressure and slipped into red terrain in absence of any positive trigger in the late morning session. The sentiments were pessimistic with report stating that the rise in international crude prices poses risks to India’s current account deficit. Besides, the Indian rupee weakened marginally against the US dollar, which also dampened the sentiments. Investors were also concerned with a report stating that Petrol price increased by 33 paise a litre in Delhi -- the highest since the daily price revision came into force in mid-June 2017, and diesel by 26 paisa. The petrol price touched a record high of Rs 76.24 per litre and diesel climbed to its highest ever level of Rs 67.57. Meanwhile, both mid and small cap indices were trading in negative terrain with losses of around 1%. On the global front, Asian markets were trading mostly in green as investors got some relief after America and China stepped back from the brink of a trade war. The two sides have reached an agreement which means that tariffs will not be slapped on tens of billions of dollars of imports.

Back home, investors reacted negatively to a report which showed that foreign institutional investors (FIIs) sold shares worth a net Rs 166.15 crore on May 18, 2018. In scrip specific developments, Larsen & Toubro surged as its arm in consortium with TechnipFMC won two significant orders from Hindustan Urvarak and Rasayan. Besides, Union Bank of India gained as it received nod from its board to raise capital not exceeding Rs 7400 crore.

The BSE Sensex is currently trading at 34785.84, down by 62.46 points or 0.18% after trading in a range of 34742.99 and 34973.95. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.96%, while Small cap index was down by 1.41%.

The top gaining sectoral indices on the BSE were Telecom up by 0.61%, IT up by 0.49%, PSU up by 0.42%, TECK up by 0.42% and Oil & Gas was up by 0.41%, while Realty down by 1.96%, Healthcare down by 1.42%, Basic Materials down by 1.08%, Metal down by 1.05% and Auto was down by 1.04% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.97%, Coal India up by 1.31%, ONGC up by 1.30%, ICICI Bank up by 1.27% and SBI up by 1.25%. On the flip side, Sun Pharma down by 2.40%, Dr. Reddys Lab down by 2.35%, Tata Motors - DVR down by 1.94%, Hero MotoCorp down by 1.52% and Maruti Suzuki down by 1.46% were the top losers.

Meanwhile, the Comptroller and Auditor General (CAG) of India Rajiv Mehrishi has said that the root cause of Indian banking sector crisis is the problem in the bond market as the Reserve Bank of India (RBI) acts as regulator as well as trader. He noted that the RBI, in its effort to ensure that banks don’t fail, has slowed down giving licences to new banks, so it promotes uncompetitive behavior.

Mehrishi has pointed out that very few new banks have got licence in India in recent years, and that is example of abuse of market dominance by the state. Referring to the Walmart-Flipkart $16 billion deal, he said that Walmart may have several common shareholding with Amazon, and that also needs to be worried about.

The CAG further said that the market must work efficiently but that does not happen due to asymmetry of information and abuse of power etc. Therefore, he said that state intervention is required in the market. Noting there has been huge expansion of markets and growth of new economy, he said that new economy is also likely to have dominance and abuse of dominance so we need to look at new economy.

The CNX Nifty is currently trading at 10565.75, down by 30.65 points or 0.29% after trading in a range of 10550.05 and 10621.70. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.95%, SBI up by 1.40%, BPCL up by 1.35%, Bharti Airtel up by 1.31% and ONGC up by 1.30%. On the flip side, Sun Pharma down by 2.85%, Dr. Reddys Lab down by 2.73%, UPL down by 2.45%, Zee Entertainment down by 2.06% and Grasim Industries down by 1.92% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 5.68 points or 0.23% to 2,466.33, FTSE Bursa Malaysia KLCI surged 7.72 points or 0.42% to 1,862.22, Shanghai Composite strengthened 21.69 points or 0.68% to 3,214.99, Nikkei 225 soared 100.23 points or 0.44% to 23,030.59, Taiwan Weighted advanced 135.36 points or 1.25% to 10,966.20 and Hang Seng was up 335.4 points or 1.08% to 31,383.31.

On the flip side, Jakarta Composite was down 41.73 points or 0.72% to 5,741.58.