Markets pare all gains, trading marginally in red

Indian stock markets trimmed all their early gains and were trading with small losses in early noon session due to profit-booking by funds and retail investors. Sentiments on the street turned pessimistic with a private report stating that the Government has hiked the import duty on goods, including apples, walnuts and non-alloy steel being brought in from the US. Further, some discomfort also came in with a report showing that the flows for this year in the first six months is negligible compared to last year during the same period and this year has been extremely unfavourable from FII flow perspective. The report further stated that this year the figure is a meagre $15 million (or $0.01 billion) until June 12, 2018, while last year FIIs invested net assets worth $ 8 billion in the first six months. Meanwhile, a private report stated that at a time when the global economic growth appears to have gained momentum after the tepid performance of 2015 and 2016, the world has started to face a series of political and event risks that can potentially exert severe economic impact. The risk of economic growth deceleration is real.

On the sectoral front, top losers on the BSE sectoral front were PSU, telecom, utilities, healthcare and power stocks. Power sector stocks were trading lower as investors kept a cautious eye on the crucial meeting of stakeholders of power sector with the finance ministry that will be taken place later today in order to discuss ways to address issues faced by stressed power plants. However, buying in Energy, IT, Consumer Durables, Realty and TECK were limiting the losses. Rupee weakened and that boosts revenue of IT firms in rupee terms as the sector derives a lion’s share of revenue from exports.

On the global front, Asian markets were trading mostly in red. A lull in the Sino-US trade tussle and talk of more Chinese stimulus helped calm nerves, while tensions in the oil market grew ahead of an OPEC meeting that could expand the supply of crude. Back home, the market breadth on the BSE was in favour of declines; there were 800 shares on the gaining side against 1439 shares on the losing side while 116 shares remained unchanged. 

The BSE Sensex is currently trading at 35533.55, down by 13.78 points or 0.04% after trading in a range of 35525.36 and 35678.69. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.10%, while Small cap index down by 0.33%.

The top gaining sectoral indices on the BSE were Energy up by 0.31%, IT up by 0.24%, Consumer Durables up by 0.17%, Realty up by 0.12% and TECK up by 0.10%, while PSU down by 1.02%, Telecom down by 0.82%, Utilities down by 0.74%, Healthcare down by 0.65% and Power down by 0.58% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 1.61%, ICICI Bank up by 1.52%, Reliance Industries up by 1.06%, Tata Motors up by 0.43% and Infosys up by 0.35%. On the flip side, Power Grid Corporation down by 1.90%, ONGC down by 1.63%, SBI down by 1.06%, Indusind Bank down by 0.89% and Sun Pharma down by 0.88% were the top losers.

Meanwhile, expressing concern over economy’s growth, Former National Association of Software and Services Companies (NASSCOM) president R Chandrashekhar has said that the economy could be disrupted if job growth was not constant. He added that the government statistics showed that nearly four million jobs in the formal sector were created from September 2017 to March 2018, of which about 50% were in the service sector.

Chandrashekhar had expressed optimism on strong growth of the economy, underlining the fact that the country retained its position as the world’s fastest growing major economy in the January-March quarter, well ahead of China. He also said that India’s GDP growth accelerated to 7.7% in the March quarter. He further said that strong growth in agriculture, manufacturing and construction sectors contributed to the overall growth. Referring a study by FICCI, NASSCOM-2017, he said that by 2022, the impact on infotech, BFSI would be high, auto and retail would be medium and low in apparel and leather.

Citing to the role of the construction industry, he has said that in the Indian scenario, the sector was contributing 8% of GDP and was the second highest employer after agriculture. He mentioned that growth of corporates in India is the driver of the corporate real estate. He further said that the ability of politics to influence the economy was going down and the ability of corporates to influence the economy was high and added that corporates now also look at Tier II cities as a place for their companies, which was a welcome sign.

The CNX Nifty is currently trading at 10766.05, down by 6.00 points or 0.06% after trading in a range of 10762.30 and 10809.60. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 1.72%, ICICI Bank up by 1.69%, Zee Entertainment up by 1.40%, Tech Mahindra up by 1.19% and Reliance Industries up by 1.18%. On the flip side, Dr. Reddys Lab down by 2.10%, HPCL down by 1.98%, Power Grid Corporation down by 1.78%, GAIL India down by 1.71% and ONGC down by 1.63% were the top losers.

Most of the Asian markets were trading in rred; Hang Seng plunged 196.67 points or 0.67% to 29,499.50, Shanghai Composite fell 12.90 points or 0.44% to 2,902.83, KOSPI shed by 20.31 points or 0.87% to 2,343.60, Straits Times moved down 3.95 points or 0.12% to 3,311.95 and Jakarta Composite was down by 12.13 points or 0.21% to 5,871.91

On the flip side, Nikkei 225 surged 161.40 points or 0.71% to 22,716.83 and Taiwan Weighted increased 25.19 points or 0.23% to 10,952.63.