Feeble global cues drag benchmarks lower in early deals

Indian equity benchmark made a cautious start and are trading with marginal losses in early deals, tracking feeble global cues including - trade war worries and oil prices. Traders remained on sidelines ahead of services sector data for June slated to be released later in the day. Sentiments were downbeat with the rating agency ICRA’s report that Reserve Bank of India’s (RBI) plan to change disbursement norms of working capital would exert pressure on the liquidity profile of borrowers, specifically those having a high dependence on cash credit or overdraft facilities while lacking alternative sources of liquidity. Some cautiousness also crept in with a report that the five-pronged strategy recommended by the panel of bankers for resolution of bad loans is a useful long-term concept, but tighter deadlines and near-term funding challenges remain. However, losses remained capped as traders were getting some solace with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the Indian economy is on the cusp of a major sustained and ongoing recovery and poised to grow above 8% from the next year, thanks to a slew of measures taken by the government in the last few years.

On the global front, Asian markets are trading mostly in red at this point of time, with Japanese markets lagging other Asian majors as trade jitters continued to simmer ahead of a deadline when tariffs are due to take effect. The US markets ended a holiday-shortened session in negative territory on Tuesday, amid lingering trade concerns as tariffs on billions of dollars worth of US and Chinese goods are set to take effect later this week.

Back home, stocks related to coal sector remained buzzing with a private report highlighting that coal imports in the first two months of the ongoing fiscal registered a marginal decline of 2.6% at 36.49 million tonnes (MT). In scrip specific developments, Prakash Industries surged on achieving highest sales volume in Q1FY2019 and Ashoka Buildcon was up on receiving arbitration award of Rs 22.45 crore.

The BSE Sensex is currently trading at 35325.57, down by 53.03 points or 0.15% after trading in a range of 35309.67 and 35437.93. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.58%, while Small cap index down by 0.12%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.40%, Energy up by 0.36%, Power up by 0.24% and Utilities was up by 0.09%, while Metal down by 1.19%, Telecom down by 1.18%, Basic Materials down by 0.79%, TECK down by 0.71% and IT was down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 1.27%, Sun Pharma up by 0.99%, Reliance Industries up by 0.91%, HDFC up by 0.67% and Bajaj Auto up by 0.52%. On the flip side, Vedanta down by 2.06%, Bharti Airtel down by 1.89%, Tata Motors - DVR down by 1.58%, ONGC down by 1.11% and Adani Ports down by 1.05% were the top losers.

Meanwhile, highlighting slew of measures taken by the government in the last few years, NITI Aayog Vice Chairman Rajiv Kumar has said that the India’s economy is on the cusp of a major sustained and ongoing recovery, and it is poised to grow above 8% from the next year. He stated that this on the basis of the macroeconomic balances that are in place, along with a higher growth.

He said ‘I think because of all these reforms, all the measures we have taken (over the last few years), we are now on the cusp of a major sustained and ongoing recovery’. He also said that the economic growth is likely to shift from 7.5% now to 8% and above next year and by 2022, the country will start growing at 8.5-9% and thereafter will sustain it. He pointed out that over the last four years, the economy has been hugely formalised and the dualism has been done away with to a great extent.

NITI Aayog Vice Chairman said ‘The dualism that existed between the formal and informal -- between those who paid taxes and those who did not, I think that is beginning to change in a major way with indirect tax base increasing by 40 lakh in two years over a base of 60 lakh, so, an incredible jump there.’ He added that all of this will help India integrate much better with global production network and would give competitiveness and thus a basis for a higher trajectory of growth which will be above 8% to go forward.

The CNX Nifty is currently trading at 10692.30, down by 7.60 points or 0.07% after trading in a range of 10677.75 and 10717.30. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Lupin up by 2.20%, Dr. Reddys Lab up by 1.86%, Indiabulls Housing up by 1.66%, Sun Pharma up by 1.41% and HDFC up by 1.12%. On the flip side, Hindalco down by 2.03%, Bharti Airtel down by 1.78%, Vedanta down by 1.75%, Grasim Industries down by 1.56% and HPCL down by 1.26% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 81.31 points or 0.37% to 21,704.23, Straits Times slipped 4.13 points or 0.13% to 3,231.77, Hang Seng tumbled 306.46 points or 1.09% to 28,239.11, KOSPI shed 8.02 points or 0.35% to 2,264.74 , Jakarta Composite dipped 1.93 points or 0.03% to 5,632.01 and Shanghai Composite was down by 18.98 points or 0.69% to 2,767.91. On the flip side, Taiwan Weighted was up by 2.83 points or 0.03% to 10,718.55.