Indian equities add losses amid weak global cues

Adding losses, Indian equity benchmarks continued to trade lower in afternoon session, as selling momentum in the equities persisted. Sentiment on the street weakened with a report that government debt rose 1.7% to over Rs 76.94 lakh crore in the January-March period of 2017-18 fiscal over the previous quarter. The debt was Rs 75.66 lakh crore as of December 2017. Some caution also prevailed in the markets ahead of Futures and Options (F&O) derivative expiry for June series due tomorrow. Moreover, weak global cues, surging crude oil prices and a lack of fresh positive trigger at home were keeping the domestic equity markets subdued. Traders even overlooked report stating that the government is expecting a tremendous improvement in tax buoyancy from the goods and services tax (GST) and, ahead of its first anniversary, expect collections from the landmark levy to average more than Rs 1 lakh crore a month in this fiscal year. On the sectoral front, Information technology shares traded higher as the rupee weakened to a 19-month low against the US dollar. Besides, shares of oil marketing companies and aviation were trading lower as crude oil prices surged. 

On the global front, Asian markets were trading mostly in red, as weakness in Chinese stocks and the yuan weighed on sentiment, while oil held hefty gains as the United States pressured allies to stop buying Iranian crude. Back home, the BSE Sensex is currently trading at 35395.33, down by 94.71 points or 0.27% after trading in a range of 35390.87 and 35618.85. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.12%, while Small cap index was down by 1.49%.

The few gaining sectoral indices on the BSE were IT up by 0.97%, TECK up by 0.76% and FMCG up by 0.06%, while Oil & Gas down by 2.90%, PSU down by 2.39%, Utilities down by 2.16%, Power down by 2.07% and Industrials down by 1.70% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.57%, TCS up by 1.25%, Infosys up by 0.84%, HDFC up by 0.80% and HDFC Bank up by 0.71%. On the flip side, ICICI Bank down by 3.77%, Power Grid down by 1.62%, Larsen & Toubro down by 1.61%, Tata Motors - DVR down by 1.60% and ONGC down by 1.46% were the top losers.

Meanwhile, with pick-up in the affordable and rural housing segments and infrastructure, primarily road and irrigation projects, domestic credit rating agency, ICRA in its latest report has said that domestic cement output is likely to register a growth of 6 percent in the financial year 2019. However, it cautioned that in the coming quarters, rising input costs are likely to keep cement companies’ profits under pressure.  Besides, it highlighted that in FY18, cement production registered a growth of 6.3 percent at 298 million tonnes, as compared to 280 million tonnes in FY17, with the bulk of growth reported during the second half of FY18, buoyed by better demand in key markets.

In terms of capacity addition, the rating agency expects around 19-22 million tonnes per annum (MTPA) to get added in FY19, primarily in the eastern part of the country. It pointed out that while the additions have been relatively on the lower side during FY17-FY18, the capacity overhang and moderate demand growth is likely to continue to keep the capacity utilisation level below 70 percent over the next two years. It noted that the Budget of FY19 also supports with higher rural credit, increased minimum support price, increased allocation for the rural, agricultural and allied sectors, along with continued focus on the Pradhan Mantri Awas Yojana and infrastructure investments.

According to the report, cement demand from rural housing saw a pick-up, post monsoons, following an improvement in the rural economy as a result of normal monsoons. It also stated that lumpy capacity additions in the recent past have led to an increase in debt levels and some deterioration in credit metrics, although they still remain at comfortable levels for most of the larger players.

The CNX Nifty is currently trading at 10723.30, down by 45.85 points or 0.43% after trading in a range of 10721.90 and 10785.50. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.28%, Bharti Infratel up by 2.17%, Hindustan Unilever up by 1.61%, HCL Tech. up by 1.48% and Dr. Reddys Lab up by 1.41%. On the flip side, HPCL down by 7.46%, BPCL down by 5.85%, Indian Oil Corp. down by 5.22%, ICICI Bank down by 3.75% and GAIL India down by 2.63% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 70.23 points or 0.32% to 22,271.77, Hang Seng dropped 302.91 points or 1.06% to 28,578.49, Taiwan Weighted slipped 41.14 points or 0.38% to 10,701.03, Shanghai Composite was down by 32.11 points or 1.14% to 2,812.40 and KOSPI decreased 8.89 points or 0.38% to 2,342.03.

On the flip side, Straits Times gained 5.46 points or 0.17% to 3,275.41 and Jakarta Composite was up by 25.35 points or 0.43% to 5,851.00.