Indian equity markets lower in early deals on Monday

Indian equity markets, after making a flat to positive start, have turned lower and are trading with losses of around half a percent in early deals on Monday, amid weak cues from other Asian markets, which dragged both the Sensex and Nifty below their psychological 35,300 and 10,700 levels respectively. Sentiments remained downbeat with report of the Reserve Bank of India stating that India’s external debt stood at $529.7 billion at the end of March 2018, recording an increase of $58.4 billion year-on-year, primarily on account of a rise in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits. Further, traders remained concerned after India’s foreign direct investment (FDI) growth rate hit five-year low of 3% in 2017-18. According to the latest data of the Department of Industrial Policy and Promotion (DIPP) inflows grew by only 3% to $44.85 billion in 2017-18.  Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 157.15 crore on June 29, 2018, as per provisional data released by the stock exchanges.

On the global front, US stocks ended higher Friday as markets surrendered most of an early gain as worries about rising tariffs once again dampened investors’ enthusiasm as the second quarter came to an end. Asian markets were trading mostly in red with trade tensions between the US and its trading partners still a key concern for investors.

Back home, traders were seen piling up position in Auto, IT, Healthcare and TECK, while selling was witnessed in Utilities, Power, Energy, Capital Goods and Metal. In the scrip specific development. The markets breadth on the BSE was negative; there were 879 shares on the gaining side against 893 shares on the losing side, while 79 shares remained unchanged.

The BSE Sensex is currently trading at 35274.16, down by 149.32 points or 0.42% after trading in a range of 35264.55 and 35578.24. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.04%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were Auto up by 0.66%, IT up by 0.46%, Healthcare up by 0.42%, TECK up by 0.33%, Consumer Disc up by 0.24% while, Utilities down by 1.07%, Power down by 1.00%, Energy down by 0.92%, Capital Goods down by 0.87%, Metal down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.34%, Tata Steel up by 2.06%, Sun Pharma up by 2.03%, Tata Motors - DVR up by 1.73% and Tata Motors up by 1.50%. On the flip side, NTPC down by 3.32%, Vedanta down by 2.23%, Larsen & Toubro down by 1.79%, ONGC down by 1.74% and ITC down by 1.37% were the top losers.

Meanwhile, India’s foreign direct investment (FDI) growth rate hit five-year low of 3% in 2017-18. According to the latest data of the Department of Industrial Policy and Promotion (DIPP) inflows grew by only 3% to $44.85 billion in 2017-18. Before this, foreign inflows in the country grew by 8.67% in 2016-17, 29% in 2015-16, 27% in 2014-15, and 8% in 2013-14. However, it recorded a negative growth of 38% in 2012-13.

As per the data, the key sectors which received maximum foreign inflows in the last fiscal are services ($6.7 billion), computer software and hardware ($6.15 billion), telecommunications ($6.21 billion), trading ($4.34 billion), construction ($2.73 billion) automobile ($2 billion) and power ($1.62 billion).

For India, Mauritius has emerged as the largest source with $15.94 billion in 2017-18 followed by Singapore ($12.18 billion), Netherlands ($2.8 billion), the US ($2.1 billion) and Japan ($1.61 billion). The data also showed that the FDI equity inflow of $44.8 billion in 2017-18 and it is the highest ever for any financial year.

FDI is important as India would require huge investments in the coming years to overhaul its infrastructure sector to boost growth. Decline in foreign inflows could put pressure on the country's balance of payments and may also impact the value of the rupee.

The CNX Nifty is currently trading at 10662.15, down by 52.15 points or 0.49% after trading in a range of 10660.20 and 10736.15. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.36%, Tata Steel up by 2.03%, Tech Mahindra up by 1.73%, Tata Motors up by 1.45% and HPCL up by 1.43%. On the flip side, NTPC down by 3.45%, Vedanta down by 2.43%, Larsen & Toubro down by 2.13%, Eicher Motors down by 2.00% and Hindalco down by 1.78% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 279.97 points or 1.27% to 22,024.54, Straits Times declined 21.92 points or 0.68% to 3,246.78, Taiwan Weighted decreased 10.62 points or 0.10% to 10,826.29, KOSPI dropped 36.72 points or 1.60 % to 2,289.41 and Shanghai Composite was down by 32.28 points or 1.15% to 2,815.14. On the other hand, Hang Seng surged 457.79 points or 1.58% to 28,955.11, Jakarta Composite added 16.53 points or 0.28% to 5,815.77.