Equity indices continue weak trade; PSU, Oil & Gas stocks drag

Domestic equity indices continued their weak trade as traders continued to sell risky assets amid weakness in global markets. Markets were also dragged by heavy selling in blue-chip stocks like Infosys, SBI and ONGC. Sentiments remained dull with SBI’s research report stating India has only one decade to change its status into a developed country and will need to focus on education, failing which the much-hailed 'demographic dividend' will turn into a disadvantage. It warned that if India is not able to get its act together, it will never be able to go into the developed group of nations. Investors also remain concerned with a private report stating that the Centre and some states strongly disagree on the inclusion of certain petroleum products--natural gas and aviation turbine fuel--under the ambit of Goods and Services Tax (GST). Meanwhile, WPI inflation came at 4.43% which pushed Indian markets even lower.

On the global front, Asian shares edged down after the Federal Reserve raised interest rates and took a more hawkish tone in forecasting a slightly faster pace of tightening for the rest of the year, while concerns about US-China trade frictions kept investors on edge. Back home, most of the oil & gas stocks were incurring losses as India’s oil imports from Iran surged to about 705,000 barrels per day (bpd) in May, their highest level since October 2016. The market breadth on the BSE was in favour of declines; there were 875 shares on the gaining side against 1437 shares on the losing side while 110 shares remained unchanged. 

The BSE Sensex is currently trading at 35531.17, down by 207.99 points or 0.58% after trading in a range of 35509.88 and 35749.88. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.36%, while Small cap index down by 0.12%.

The sole gaining sectoral index on the BSE was Healthcare up by 0.58%, while PSU down by 1.27%, Oil & Gas down by 1.27%, Energy down by 1.17%, IT down by 1.11% and TECK down by 1.09% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.51%, Tata Steel up by 0.31%, Dr. Reddys Lab up by 0.27%, HDFC Bank up by 0.23% and Yes Bank up by 0.18%. On the flip side, Infosys down by 2.40%, SBI down by 1.79%, ONGC down by 1.41%, ICICI Bank down by 1.39% and TCS down by 1.30% were the top losers.

Meanwhile, State Bank of India (SBI) in its latest report has said that India has only a decade to get into the developed country tag and will need to broaden its base in the sphere of education, failing which the much-hailed 'demographic dividend' could actually turn into a disadvantage by 2030. It cautioned that if the country is not able to get its act together, it will never be able to go into the developed group of nations.

The report suggested that the government and policymakers will have to emphasis on the young people to ensure they become good citizens and invest in education in order to achieve the objective and realise the demographic dividend. It pointed out that the population growth trend shows that incremental population growth has been stagnant in the last two decades at about 18 crore, and fertility rates are quite diverse across states. It added that Karnataka, which has seen a decline in birth rate over the last few decades that has led to the share of those over 60 years increasing to 9.5 percent in 2011, from 6.1 percent in 1971, is best representative of the need to focus on education.

According to the report, with the affluence that comes as a result of slower population growth, people are preferring to put their children in private schools and not the government ones, on which a large number of population still depends. Suggesting a slew of changes needed in order to make the state-run schools perform better, it said that the need of the hour is thus to improve the overall situation of government schools across states.

The CNX Nifty is currently trading at 10788.10, down by 68.60 points or 0.63% after trading in a range of 10782.05 and 10833.70. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.82%, HCL Tech.up by 1.29%, Lupin up by 0.79%, Cipla up by 0.65% and Indiabulls Housing up by 0.49%. On the flip side, Infosys down by 2.47%, Indian Oil Corporation down by 1.94%, GAIL India down by 1.87%, Tech Mahindra down by 1.75% and HPCL down by 1.74% were the top losers.

Asian counters were trading lower; Hang Seng decreased 326.18 points or 1.06% to 30,398.97, Nikkei 225 plunged 227.77 points or 0.99% to 22,738.61, Taiwan Weighted slipped 159.23 points or 1.43% to 11,013.98, KOSPI Index declined 42.8 points or 1.73% to 2,426.03, Shanghai Composite decreased 9.88 points or 0.32% to 3,039.92 and FTSE Bursa Malaysia KLCI was down 1.79 points or 0.1% to 1,761.78.