Key equity indices continue to trade in red

Key equity benchmarks continued to show a sluggish trend in morning session, with losses of around one third of a percent. Traders remained concerned with Commerce and Industry Minister Suresh Prabhu’s statement that unilateral trade restrictive actions by some developed countries could derail the fragile global economic recovery which would have implications on job scenario. The markets also remained under pressure on a report stating that the demand for Indian goods has been on a decline in the Chinese market, India’s increasing dependence on China for items such as electric equipment, machines, medical and surgical instruments and fertilizers, among others, is widening India’s trade deficit with the country.  Traders shrugged off a report from International Monetary Fund which highlighted that India, the $2.85 trillion economy is currently the 7th largest in the world in terms of Gross Domestic Product, and all it needs is to add $90 billion to conquer not only the United Kingdom but also France.

On the global front, Asian markets were trading mixed. Traders were cautious with a private report stating that global economic growth could slow down by 1 percentage point or more than a quarter of the expansion rates projected by various international bodies if US President Donald Trump’s tariff threats against China and others escalate into a full-blown trade war. Back on domestic turf, in scrip specific development, Idea Cellular strengthened on getting nod to increase FDI limit to 100% from the current 67.5%, from the Department of Telecom (DoT) on June 4, 2018. Besides, NIIT gained on entering into L&D agreement with Pitney Bowes.

The BSE Sensex is currently trading at 34916.02, down by 95.87 points or 0.27% after trading in a range of 34884.04 and 35073.12. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.76%, while Small cap index was down by 1.60%.

The sole gaining sectoral index on the BSE was Energy up by 0.38%, while Telecom down by 2.59%, Power down by 1.90%, Utilities down by 1.86%, Basic Materials down by 1.52% and Capital Goods was down by 1.52% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.13%, Wipro up by 0.50%, SBI up by 0.49%, Indusind Bank up by 0.38% and Maruti Suzuki was up by 0.36%. On the flip side, Power Grid Corporation down by 3.05%, Bharti Airtel down by 2.11%, Yes Bank down by 1.95%, Larsen & Toubro down by 1.64% and Dr. Reddy’s Lab was down by 1.55% were the top losers.

Meanwhile, the government’s savings of direct benefit transfer (DBT) has surged 58% to Rs 32,984 crore in FY18, from Rs 20,885 crore in FY17.  The government had launched direct benefit transfer scheme in 2014. From when total DBT savings till FY18-end was Rs 90,013 crore. In FY18, the jump in DBT could be largely attributed to increased use of Aadhaar-enabled DBT platforms for in-kind food and fertiliser subsidy distribution.

Out of the DBT-enabled gains of Rs 32,984 crore in FY18, removal of fake beneficiaries helped in saving Rs 15,708 crore, which is 48% in the public distribution system for food, Rs 12,506 crore, which is 38% under LPG-Pahal scheme and Rs 4,332 crore, which is 13% under the job guarantee programme (MGNREGS).
Besides, in last financial year 2018 transfer of assorted subsidies and sops to the beneficiaries through the DBT route surged 2.5 times to Rs 1.91 lakh crore as compared to previous year, leading to savings to the government of Rs 984 crore, up 58% year-on-year.

In financial year 2017, savings of Rs 42,275 crore was made under LPG-Pahal scheme, followed by Rs 29,708 crore for PDS-food, Rs 16,073 crore under the job guarantee scheme. Between FY14 and FY18, the government had transferred around Rs 3.7 lakh crore, mostly as cash paid to their bank accounts but also (increasingly) as in-kind benefits.

According to an estimate by the government, the Aadhaar-enabled DBT platform helped eliminate 3.79 crore fake LPG connections, 2.75 crore duplicate ration cards and resulted in 10% savings on wages on account of deletion of non-existent MGNREGS beneficiaries.

The CNX Nifty is currently trading at 10584.95, down by 43.55 points or 0.41% after trading in a range of 10578.65 and 10633.15. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.61%, Reliance Industries up by 1.12%, SBI up by 0.61%, Cipla up by 0.58% and Bajaj Finance was up by 0.55%. On the flip side, Indiabulls Housing Finance down by 3.62%, Zee Entertainment down by 3.23%, Power Grid Corporation down by 3.05%, Bharti Airtel down by 2.36% and Yes Bank was down by 1.92% were the top losers.

Asian market were trading mixed, Shanghai Composite gained 7.15 points or 0.23% to 3,098.34, Nikkei 225 surged 38.59 points or 0.17% to 22,514.53, Hang Seng rose 48.56 points or 0.16% to 31,046.54 and Jakarta Composite was up by 52.23 points or 0.87% to 6,067.05.

On the other side, Taiwan Weighted slipped 35.86 points or 0.32% to 11,073.64, FTSE Bursa Malaysia KLCI declined 4.15 points or 0.24% to 1,751.02 and KOSPI Index was down by 3.4 points or 0.14% to 2,444.36.