Markets trade at day's low; Nifty below 10,550 mark

Extending their early losses, the local equity markets continued weak trade and were now trading at day’s low points in early afternoon session, on the back of sustained selling activities by market-participants. The mood on the street remained cautious with report that even as monsoon is predicted to be normal this year, its uneven distribution could spike food prices, and inflation is likely to edge further. Some concern also came with finance ministry’s statement that rising crude oil prices could drive up India’s import bill in the range of $25-50 billion this fiscal, worsening the current account deficit. However, elevated oil prices would impact neither economic growth nor the fiscal deficit of the Centre. Further, fall in rupee value against dollar along with continuous selling in Realty, Healthcare and Basic Materials stocks, also pulled the equity indices lower. The broader markets also extended losses with the BSE Midcap and Smallcap indices dropping by 1.19% and 1.91%, respectively. In scrip specific development, 3i Infotech surged by over four percent on incorporating a step-down subsidiary in Dubai Mainland for ease of carrying on business.

On the global front, Asian markets were trading mostly in green, as investors cheered the outcome of negotiations between the United States and China that put a trade war on hold, clearing uncertainty. Back home, the BSE Sensex is currently trading at 34711.08, down by 137.22 points or 0.39% after trading in a range of 34684.42 and 34973.95. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.19%, while Small cap index was down by 1.91%.

The top gaining sectoral indices on the BSE were IT up by 0.40%, TECK up by 0.33%, Telecom up by 0.31%, PSU up by 0.25% and Oil & Gas up by 0.09% while, Realty down by 2.04%, Healthcare down by 1.47%, Basic Materials down by 1.47%, Industrials down by 1.41% and Consumer Disc down by 1.38% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.90%, ICICI Bank up by 1.54%, Coal India up by 1.41%, SBI up by 1.25% and ONGC up by 1.19%. On the flip side, Yes Bank down by 2.68%, Dr. Reddy’s Lab down by 2.38%, Sun Pharma down by 2.25%, Axis Bank down by 2.01% and Tata Motors - DVR down by 1.91% were the top losers.

Meanwhile, the economic affairs secretary Subhash Chandra Garg has said that the constant rise in global oil prices and hardening bond yields will not have any impact on the economic growth of India. He also said that the fiscal deficit programme has been going on very smoothly and there has been no reason to believe that there will be any greater impact. He added that the growth parameters are very sound, macroeconomic parameters also continue to be very sound and inflation is within the range.

Garg has said that the country’s growth continues to be stable with strong macroeconomic fundamentals. He said that the spurt in oil prices will push up the oil import bill by $25 billion to $50 billion under different scenarios and impact current account deficit (CAD), but inflation is under control and the fiscal deficit scenario is not worrisome either. Besides, India spent around $72 billion on oil imports last year. Moreover, crude oil prices has touched $80 per barrel, the highest since November 2014, giving rise to risk of higher inflation and petrol diesel prices across nations.

Economic affairs secretary further said that currency in circulation has come down in the last four days but situation is completely normal now. He also said that some outflows in the bond and equity markets have been seen but it is not alarming. Regarding the possibility of an excise duty cut on petrol and diesel, Garg said the government is not considering a tax cut at the moment. He said one needs to ‘watch what is happening’.

The CNX Nifty is currently trading at 10542.30, down by 54.10 points or 0.51% after trading in a range of 10539.30 and 10621.70. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.00%, ICICI Bank up by 1.61%, Bharti Infratel up by 1.41%, SBI up by 1.34% and Coal India up by 1.33%. On the flip side, UPL down by 2.88%, Yes Bank down by 2.72%, Dr. Reddy’s Lab down by 2.62%, Zee Entertainment down by 2.35% and Sun Pharma down by 2.34% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 4.92 points or 0.2% to 2,465.57, FTSE Bursa Malaysia KLCI rose 6.51 points or 0.35% to 1,861.01, Shanghai Composite added 15.45 points or 0.48% to 3,208.76, Nikkei 225 surged 72.01 points or 0.31% to 23,002.37, Taiwan Weighted inched up 135.36 points or 1.25% to 10,966.20 and Hang Seng increased 251.47 points or 0.81% to 31,299.38.

On the flip side, Jakarta Composite was down by 40.19 points or 0.69% to 5,743.12.