Domestic bourses continue to trade in negative terrain

Domestic bourses continued trading in negative terrain with marginal losses in early noon session following a weak trend at other Asian markets. Selling in Energy, Realty and Basic Materials stocks pulled the markets lower. Sentiments on the street were dull with Union minister Suresh Prabhu stating that the country is facing real challenge at World Trade Organsation (WTO) and the global trading system itself, because for the first time the countries are putting roadblocks to trade and it is going to be a real issue. Meanwhile, India will raise customs duty on 29 products, including almond, walnut and pulses, imported from the US as a retaliatory action against the tariff hike by Washington.  However, among the individual stocks on the BSE, buying in Mahindra & Mahindra, ITC and Sun Pharma stocks helped market limit their losses.

On the sectoral front, steel sector was in focus after a report said that Insolvency and Bankruptcy Code (IBC) will accelerate consolidation in steel industry and help many global players who have been struggling to enter India.  However, Power sector was trading lower with a report stating that the Reserve Bank of India (RBI) refused to give any special relief to the power sector from its February circular that mandates early detection and time-bound resolution of stressed assets. Oil & Gas sector stocks were also trading lower after a report showed that India’s crude oil production dropped 3 percent to just over 3 million tonnes in May on the back of dip in output from fields operated by state-owned Oil and Natural Gas Corp.

On the global front, Asian shares were trading mostly in red on Friday on signs US trade battles with China and many other countries are starting to chip away at corporate profits, while oil prices were choppy ahead of an OPEC meeting to discuss raising output. Back home, the BSE Sensex is currently trading at 35396.14, down by 36.25 points or 0.10% after trading in a range of 35344.49 and 35452.88. There were 10 stocks advancing against 20 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index fell by 0.30%, while Small cap index down by 0.33%.

The gaining sectoral indices on the BSE were Telecom up by 0.52%, FMCG up by 0.52%, TECK up by 0.14% and IT up by 0.04%, while Energy down by 1.19%, Realty down by 0.75%, Basic Materials down by 0.46%, Power down by 0.38% and Oil & Gas down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.91%, ITC up by 1.57%, Sun Pharma up by 0.58%, Tata Steel up by 0.56% and Infosys up by 0.55%. On the flip side, Reliance Industries down by 1.84%, Coal India down by 1.29%, Wipro down by 1.22%, Indusind Bank down by 1.12% and Bajaj Auto down by 0.85% were the top losers.

Meanwhile, Union minister Suresh Prabhu has said that India is facing real challenge at World Trade Organsation (WTO) and the global trading system itself, because for the first time the countries are putting roadblocks to trade and it is going to be a real issue. However, he said that the government is trying to be friendly with all the countries. In March, the commerce and industries minister had appealed to WTO members to identify common ground for strengthening the multi-lateral trade body amid challenges being faced by it following the deadlock at the Buenos Aires Ministerial.

The minister said “We are not enemies as far as trade is concerned. We want to make friendship. With China, we had huge trade deficit. I invited the Chinese Commerce Minister (Zhong Shan) to India and signed many agreements and decided not only to reduce trade deficit but (bring in) balance in trade.” He also said that the government was also talking with the European Union on the WTO issue as it was a big market place. He said “We are talking to EU about these issues. Japan, Korea, ASEAN countries. I had invited them and we decided to increase the trade volume.”

Appealing to industrialists not to depend much on the government, he said “I only wish and hope..., don't expect everything from the government. The Government is doing more than what you want. The Government can only provide umbrella support. But when it comes to business, that can be done only by you businessmen.”

The CNX Nifty is currently trading at 10730.70, down by 10.40 points or 0.10% after trading in a range of 10710.45 and 10745.30. There were 22 stocks advancing against 27 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Mahindra & Mahindra up by 1.96%, Bharti Infratel up by 1.86%, ITC up by 1.65%, BPCL up by 1.37% and Bajaj Finance up by 1.09%. On the flip side, Reliance Industries down by 1.84%, Grasim Industries down by 1.72%, UPL down by 1.61%, Eicher Motors down by 1.55% and Indusind Bank down by 1.40% were the top losers.

Most of the Asian markets were trading in red; Nikkei 225 plunged 195.43 points or 0.87% to 22,497.61, Straits Times moved down 11.47 points or 0.35% to 3,288.53, Hang Seng declined 67.22 points or 0.23% to 29,228.83, Taiwan Weighted decreased 46.50 points or 0.43% to 10,894.57 and Jakarta Composite was down by 25.95 points or 0.45% to 5,796.38.

Bucking the trend, KOSPI increased by 6.54 points or 0.28% to 2,344.37 and Shanghai Composite was up 10.31 points or 0.36% to 2,886.12.