Feeble global cues drag benchmarks lower in early deals

Indian equity benchmarks extended their previous session’s losses and are now trading lower by around quarter a percent with Sensex and Nifty breaching their psychological 35,400 and 10,750 levels respectively, tracking a sell-off in global markets amid escalating trade war worries. Meanwhile, the session was also proved weak for broader indices which are trading with loss in the range of 0.40-0.45%. However, losses remained capped with report that India’s exports from special economic zones (SEZs) jumped 38% to Rs 29,236 crore in the month of May 2018. As per the Export Promotion Council for EoUs and SEZs (EPCES) data, exports from these zones grew by 11% to Rs 1.01 lakh crore during April-May period of current fiscal year (FY19). Some solace came in on report that the foreign portfolio investors (FPIs) bought shares worth a net Rs 1126.75 crore June on 21, 2018.

On the global front, the US markets ended lower on Thursday as fears of a potential global trade war continued to weigh on investor sentiment. Asian markets were trading mostly lower following the weak cues overnight from Wall Street. Investors were also cautious ahead of the meeting between OPEC and non-OPEC producers that will take place in Vienna later today.

Back home, traders were seen piling up position in Telecom, TECK, IT, Capital Goods, while selling was witnessed in Energy, Realty, Basic Materials, Consumer Durables and Healthcare. In scrip specific developments, AstraZeneca Pharma India gained 5% on the BSE after the company has received approval from the Drug Controller General of India to market Durvalumab, a cancer treatment medicine.

The BSE Sensex is currently trading at 35362.27, down by 70.12 points or 0.20% after trading in a range of 35344.49 and 35444.18. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.44%, while Small cap index was down by 0.42%.

The few gaining sectoral indices on the BSE were TECK up by 0.17%, IT up by 0.17% and FMCG was up by 0.07%, while Energy down by 0.93%, Healthcare down by 0.90%, Realty down by 0.62%, Basic Materials down by 0.56% and Consumer Durables down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.57%, ITC up by 0.67%, HDFC up by 0.60%, Tata Steel up by 0.37% and Infosys up by 0.34%. On the flip side, Reliance Industries down by 1.54%, Tata Motors - DVR down by 1.36%, Coal India down by 1.21%, Sun Pharma down by 1.01% and SBI down by 0.97% were the top losers.

Meanwhile, India’s exports from special economic zones (SEZs) jumped 38% to Rs 29,236 crore in the month of May 2018. As per the Export Promotion Council for EoUs and SEZs (EPCES) data, exports from these zones grew by 11% to Rs 1.01 lakh crore during April-May period of current fiscal year (FY19). Besides, in 2017-18 exports from these zones rose by about 15% to Rs 5.52 lakh crore.

The data showed that major sectors which contributed to the growth are biotech, chemicals, pharmaceuticals, computers, electronics, non-conventional energy, plastic, rubber, trading and services. The officiating chairman of EPCES Vinay Sharma has said that the healthy pace of growth in exports from SEZs once again reflects the increasing economical impact of these zones and its contribution to the country’s export earnings.

EPCES data reveled that the UAE, US and Saudi Arabia were the major export destinations. However, regions like Hong Kong, Africa, Kenya and Oman have showed negative trends. These zones enjoy certain fiscal and non-fiscal incentives such as no license requirement for import; full freedom for subcontracting; and no routine examination by customs authorities of export/import cargo. They also enjoy direct and indirect tax benefits.

The CNX Nifty is currently trading at 10717.35, down by 23.75 points or 0.22% after trading in a range of 10711.75 and 10745.30. There were 16 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 1.77%, HCL Tech up by 1.32%, Zee Entertainment up by 0.93%, BPCL up by 0.73% and Indiabulls Housing up by 0.63%. On the flip side, Lupin down by 1.46%, Grasim Industries down by 1.42%, Reliance Industries down by 1.40%, Dr. Reddys Lab down by 1.36% and UPL down by 1.28% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 205.65 points or 0.91% to 22,487.39, Straits Times shed 14.52 points or 0.44% to 3,285.48, Hang Seng dropped 78.77 points or 0.27% to 29,217.28, Taiwan Weighted fell 41.22 points or 0.38% to 10,899.85 and Jakarta Composite was down by 25.95 points or 0.45% to 5,796.38.

On the flip side, KOSPI gained 6.90 points or 0.29% to 2,344.73 and Shanghai Composite was up by 10.16 points or 0.35% to 2,885.97.