Markets trade lower in early deals on feeble global cues

Indian equity benchmarks made a pessimistic start and are trading lower in early deals on Tuesday amid feeble global cues as fears of a global trade war resurfaced. Sentiments remain dampened with Commerce and Industry Minister Suresh Prabhu’s statement that global trade is facing headwinds and these challenges are needed to be tackled properly to boost world economy. He also said that the US decision to impose high import duties on certain steel and aluminium products have led to a trade war kind of situation, with other countries too raising their tariff walls. Traders remain concerned about a private report that the Indian rupee would continue to witness pressure in the coming days, but it should get respite in the medium term as trade protectionism ends up hurting the US economy, a net importer of goods.

Global cues too remained sluggish with Asian markets are trading mostly in red at this point of time after US President Donald Trump fired a fresh salvo in the ongoing trade spat between the US and China. The US markets ended mostly lower on Monday, as concerns about a global trade war after the US and China announced plans to impose tariffs on billions of dollars’ worth of imported goods weighted on the sentiments.

Back home, market participants failed to get any sense of relief with Reserve Bank of India’s data that bank credit grew 3.4% on a sequential basis in the December 2017 quarter, helped by better performance by private sector banks and an uptick in industrial credit after two successive quarters of declines. Traders shrugged off Finance Ministry’s statement that it would be increasingly difficult for businesses to remain outside the tax net as Goods and Services Tax (GST) is leading to formalisation of the economy.

The BSE Sensex is currently trading at 35432.87, down by 115.39 points or 0.32% after trading in a range of 35397.96 and 35552.47. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.09%, while Small cap index was down by 0.32%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.93%, Telecom up by 0.42% and Metal was up by 0.13%, while Oil & Gas down by 1.05%, Utilities down by 0.69%, Power down by 0.69%, Energy down by 0.69% and IT was down by 0.66% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 0.97%, Sun Pharma up by 0.88%, Tata Motors up by 0.76%, Tata Motors - DVR up by 0.52% and Bharti Airtel up by 0.42%. On the flip side, Vedanta down by 1.66%, Infosys down by 1.30%, NTPC down by 1.02%, Wipro down by 0.90% and Hero MotoCorp down by 0.89% were the top losers.

Meanwhile, in order to boost world economy, the Commerce and Industry Minister Suresh Prabhu has said that global trade which is facing headwinds, need to tackle these challenges properly. He mentioned that there are several empirical evidences that growth in global trade helps boost domestic economies as well and therefore India really need to focus on it adequately.

Prabhu further said that services trade is growing faster than merchandise and such dynamic changes need to be captured in the global trading system and there is need to focus on reviewing norms for movement of professionals. He added that the government is working on a comprehensive strategy to boost services exports and $1 billion will be spent to promote 12 champion services sectors. He also said that the pre-requisite thing for delivery of services is movement of people and that must be recognised globally and they should work on that.

Talking about exports growth in India, the Minister said the ministry has prepared a detailed strategy to increase the shipments. He highlighted that exports of goods and services in 2017-18 grew by about 12%. Besides, on the Indian economy he said the country’s economy would touch $5 trillion in next eight years and definitely need to have dollar one trillion from exports of goods and services and they are ready with the strategy for this.

The CNX Nifty is currently trading at 10752.55, down by 47.30 points or 0.44% after trading in a range of 10746.90 and 10789.45. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Lupin up by 1.89%, Dr. Reddys Lab up by 1.46%, Bajaj Finance up by 1.10%, Sun Pharma up by 1.07% and Tata Motors up by 0.83%. On the flip side, BPCL down by 2.86%, HPCL down by 2.76%, Indian Oil Corp. down by 2.70%, Vedanta down by 1.66% and Infosys down by 1.65% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 298.22 points or 1.33% to 22,382.11, Hang Seng tumbled 659.44 points or 2.22% to 29,650.05, Taiwan Weighted dropped 146.86 points or 1.34% to 10,940.61, Shanghai Composite crumbled 89.82 points or 3.06% to 2,932.08 and KOSPI was down by 18.10 points or 0.77% to 2,358.14. On the flip side, Straits Times gained 7.28 points or 0.22% to 3,331.32.