Weakness continues on Dalal Street

Indian equity benchmarks continued to trade lower in early noon deals with frontline gauges declining below their crucial 35,200 (Sensex) and 10,650 (Nifty) levels. Traders failed to get any sense of relief with the country’s manufacturing sector activity in June, which grew at the strongest pace this year, supported by rise in domestic and export orders. The Nikkei India Manufacturing Purchasing Managers Index (PMI) rose from 51.2 in May to 53.1 in June, registering the fastest improvement since December 2017. Sentiments remained dampened on reports that India’s fiscal deficit has exceeded 55% of Budget estimate in first two months of FY19. Reports that India’s external debt surged 12% to $529 billion in Q4FY18, too weighed on sentiments.

Global cues too remained sluggish with most of the Asian counterparts are trading in red terrain at this point of time ahead of a week packed with major economic events, while the euro was briefly shaken by signs a German political deal on immigration might be in trouble. Back home, traders remained concerned on reports that FDI in India seems to be petering out with the inflows growth rate recording a five-year low of 3 per cent at $44.85 billion in 2017-18. Meanwhile, Fine Organics made a decent debut and listed with 4% premium on bourses, while RITES made an optimistic debut and listed at Rs 190, up 2.7% from issue price.

The BSE Sensex is currently trading at 35174.25, down by 249.23 points or 0.70% after trading in a range of 35161.35 and 35578.24. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.98%, while Small cap index was down by 0.81%.

The lone gaining sectoral index on the BSE was IT up by 0.24%, while Metal down by 2.36%, Power down by 2.03%, Utilities down by 1.81%, PSU down by 1.57% and Telecom was down by 1.56% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.34%, Asian Paints up by 1.41%, Infosys up by 0.75%, Sun Pharma up by 0.68% and Kotak Mahindra Bank up by 0.59%. On the flip side, NTPC down by 4.23%, ONGC down by 2.21%, Vedanta down by 1.95%, Yes Bank down by 1.72% and Larsen & Toubro down by 1.66% were the top losers.

Meanwhile, India’s fiscal deficit has exceeded 55 per cent of the Budget estimate in just first two months (April-May) of the current Year (FY19), though it is still lower than what was recorded in the same period last fiscal, According to the Controller General of Accounts (CGA) data, fiscal deficit during the same period of the previous financial year had stood at 68.3 per cent.

The data showed that the total receipts -- from revenue and non-debt capital -- during the fiscal's initial two months were Rs 1.27 lakh crore, or 7 per cent of the estimates for the current financial year. Out of total receipts, net of tax revenue during the period under review was Rs 1.02 lakh crore, or 6.9 per cent of the estimated target, while the non-tax revenue was Rs 24,049 crore and Rs 1,004 crore of non-debt capital receipts. Receipts from disinvestment stood at Rs 434 crore. Total expenditure -- incurred on revenue and capital -- during the April-May period was Rs 4.72 lakh crore, or at 19.4 per cent of the entire fiscal’s estimate, out of which Rs 4.09 lakh crore was on revenue account and Rs 63,791 crore on capital account.

Fiscal deficit is the difference between earning and expenditure and expressed normally as a percentage of Gross Domestic Products (GDP). The Government aims to keep the fiscal deficit at 3.3 per cent of GDP for the current fiscal, while it managed to achieve 3.5 per cent during the last financial year (FY18).  For the current financial year, fiscal deficit has been pegged at Rs 6.24 lakh crore, as compared to the revised estimates of Rs 5.94 lakh crore for the previous fiscal.

The CNX Nifty is currently trading at 10634.00, down by 80.30 points or 0.75% after trading in a range of 10622.60 and 10736.15. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.09%, Asian Paints up by 1.24%, Infosys up by 0.80%, Indusind Bank up by 0.77% and HPCL up by 0.62%. On the flip side, NTPC down by 4.54%, Hindalco down by 3.45%, Adani Ports down by 2.26%, Grasim Industries down by 2.17% and Indiabulls Housing down by 2.16% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 tumbled 492.58 points or 2.26% to 21,811.93, Straits Times declined 19.44 points or 0.60% to 3,249.26, Taiwan Weighted fell 58.97 points or 0.55% to 10,777.94, KOSPI shed 52.52 points or 2.31% to 2,273.61 and Shanghai Composite was down by 58.30 points or 2.09% to 2,789.12. However, Jakarta Composite was up by 7.16 points or 0.12% to 5,806.40.