Benchmarks extend losses; Nifty breaches 10,800 mark

Key gauges extended losses in late morning deals with frontline indices breaching their crucial 10,800 (nifty) and 35,600 (Sensex) levels, as investors turned cautious following US Federal Reserve’s rate hike. Sentiments also remained dampened with report that Foreign portfolio investors (FPIs) sold shares worth a net Rs 70.77 crore, while domestic institutional investors (DIIs) bought equities worth Rs 486.78 crore yesterday. Anxiety also spared among investors on report that India’s Current account deficit has jumped over three times to $48.7 billion, or 1.9% of the country’s GDP, in the last financial year (FY18) from $14.4 billion or 0.6% in the previous year on account of higher trade deficit ($41.6 billion) brought about by a larger increase in merchandise imports relative to exports.

Traders shrugged off report that India will push for amicable solutions to trade disputes with the United States while hoping to address American concerns over market access and tariff levels during bilateral meetings between the two nations due soon. Sluggish global cues too dampened sentiments with all the Asian counters are trading in red at this point of time. Back home, real estate stocks edged lower despite government incentives to boost the residential real estate sector, especially budget housing, may push housing credit growth to 17-19 per cent in the current fiscal year

The BSE Sensex is currently trading at 35541.81, down by 197.35 points or 0.55% after trading in a range of 35509.88 and 35749.88. 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 0.47%, while Small cap index was down by 0.20%.

The lone gaining sectoral index on the BSE was Metal up by 0.14%, while IT down by 1.15%, TECK down by 1.11%, PSU down by 1.07%, Energy down by 1.04% and Oil & Gas was down by 0.93% was the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 0.52%, HDFC Bank up by 0.28%, Sun Pharma up by 0.24%, HDFC up by 0.13% and Dr. Reddys Lab up by 0.11%. On the flip side, Infosys down by 2.49%, SBI down by 1.96%, TCS down by 1.38%, Reliance Industries down by 1.26% and ICICI Bank down by 1.22% were the top losers.

Meanwhile, India’s Current account deficit (CAD), the gap between imports and exports of goods & services, has jumped over three times to $48.7 billion, or 1.9% of the country’s GDP, in the last financial year (FY18) from $14.4 billion or 0.6% in the previous year on account of higher trade deficit ($41.6 billion) brought about by a larger increase in merchandise imports relative to exports.  For Q4 of FY18, CAD rose to $13.0 billion or 1.9% of GDP, up from $2.6 billion or 0.4% of GDP in Q4 of FY17. However, it moderated marginally from $13.7 billion or 2.1% of GDP in the Q3 of FY18.

The country’s trade deficit increased to $160 billion in financial year 2018 from $112.4 billion in last financial year. During last quarter of FY18, trade deficit rose to $41.6 billion from $29.7 billion, a year ago. Crude oil accounts for a fourth of India’s merchandise imports and crude prices increased 5% during the quarter to touch $68.4 per barrel by end of March.

However, the higher imports were partly offset by an increase in net invisible receipts, which were higher in FY18, mainly on account of increase in net services earnings and private transfer receipts. Services receipts increased by 8.8% on the back of a rise in software services and other business services. Remittances by Indians amounted to $18.1 billion, up 15.1% from their level a year ago.

On the capital account front, gross foreign direct investment inflows to India increased to $61 billion in the FY18 from $60.2 billion in FY17. However, with investors cashing out, net FDI inflows in FY18 moderated to $30.3 billion from $35.6 billion in FY17.

In Q4 of FY18, Foreign portfolio investment recorded net inflow of $2.3 billion compared with an inflow of $10.8 billion in Q4 last year on account of moderation in net purchases in both the debt and equity markets.  While inflows through NRI deposits amounted to $4.6 billion in Q4 of 2017-18 as compared with $2.7 billion a year ago.

Capital account surplus amounted to $25 billion during the quarter compared to $10.4billion in the same period last year. The overall balance of payments ended in a surplus of $13.2 billion during the quarter, compared to $7.3 billion the same period a year ago. For FY18, the overall balance of payments surplus amounted to $41 billion compared to a surplus of $21.5 billion in FY17.

The CNX Nifty is currently trading at 10791.75, down by 64.95 points or 0.60% after trading in a range of 10782.05 and 10833.70. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 1.34%, Cipla up by 0.64%, Hindalco up by 0.61%, Tata Steel up by 0.48% and HDFC Bank up by 0.42%. On the flip side, Infosys down by 2.38%, SBI down by 1.98%, Tech Mahindra down by 1.56%, Bharti Infratel down by 1.55% and TCS down by 1.50% were the top losers.

All the Asian markets are trading in red; Hang Seng decreased 191.51 points or 0.62% to 30,533.64, Nikkei 225 shed 117.08 points or 0.51% to 22,849.30, Taiwan Weighted dropped 99.51 points or 0.89% to 11,073.70, KOSPI Index declined 30.1 points or 1.22% to 2,438.73, Shanghai Composite fell 8.58 points or 0.28% to 3,041.22 and FTSE Bursa Malaysia KLCI was down by 1.79 points or 0.1% to 1,761.78.