Benchmarks trade with caution in early deals

Indian equity benchmarks have made cautious start and are trading slightly in red in early deals on Wednesday as traders remain concerned with India’s G-20 Sherpa Shaktikanta Das, expressing concern over increasing protectionism and trade conflicts across the world, said that countries ought to work out arrangements that are beneficial to all in the larger interest of reviving global growth. Some cautiousness crept in with a private report stating that Indian inflation likely rose to a near two-year high in June, driven by surging oil and food prices, a development that would strengthen calls for more monetary policy tightening by the Reserve Bank of India. However, losses remained capped as some solace came with report that the Global Innovation Index (GII) has ranked India as the 57th most innovative nation in the world. The country has improved its ranking from 60th position last year. India has been improving steadily since it was ranked 81st in 2015.

On the global front, all the Asian markets are trading in red terrain at this point of time, following the release of a list of an additional $200 billion in Chinese goods on which the US is considering imposing tariffs. The US markets ended higher for fourth straight session on Tuesday as Wall Street shifted from consternation over global trade disputes to enthusiasm over coming second-quarter earnings results following a string of strong economic data that has refreshed investor optimism.

Back home, stocks related to software pack edged higher after Tata Consultancy Services (TCS), India’s biggest software services exporter, posted a better-than-expected 23% jump in first-quarter net profit to Rs 7,340 crore, buoyed by robust growth at the banking, financial services and insurance (BFSI) and digital verticals. In scrip specific developments, Andhra Bank gained on getting approval to raise funds and Advanced Enzyme moved higher on completing additional investment in subsidiary company.

The BSE Sensex is currently trading at 36236.57, down by 3.05 points or 0.01% after trading in a range of 36169.70 and 36332.99. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.19%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were IT up by 1.06%, TECK up by 0.84%, Realty up by 0.63%, Telecom up by 0.13% and Consumer Discretionary Goods & Services was up by 0.06%, while Metal down by 1.73%, Basic Materials down by 0.81%, Energy down by 0.59%, PSU down by 0.51% and Utilities was down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.53%, Bajaj Auto up by 1.62%, Axis Bank up by 0.73%, Asian Paints up by 0.60% and HDFC up by 0.59%. On the flip side, Vedanta down by 1.99%, Coal India down by 1.87%, Hero MotoCorp down by 1.35%, Tata Steel down by 1.23% and SBI down by 1.20% were the top losers.

Meanwhile, India’s G-20 Sherpa Shaktikanta Das has expressed concern over increasing protectionism and trade conflicts across the world and said countries ought to work out arrangements that are beneficial to all in the larger interest of reviving global growth. He added that global growth has taken a downward turn in the aftermath of 2008 financial crisis. Then advanced economies were under pressure because of subsequent developments. Financial crisis was followed by debt crisis in PIGS countries (Portugal, Italy, Greece and Spain). It was followed by Eurozone crisis. He also said that there was another major event like Britain deciding to exit the European Union, putting further pressure on global growth.

Das further said ‘But now I think in recent months, the US economy as well as European economies are showing signs of revival. On the whole, the global economy appears to be in revival mode. Therefore, at this juncture, any trade conflict which goes beyond a certain point will definitely have negative impact on global growth’. He further said that free trade has been responsible for sustained global growth over the years and added that protectionist tendencies going beyond a point, naturally will have adverse consequences on world economy.

Highlighting that the world economy cannot afford another era of slow growth, the former Economic Affairs Secretary said therefore it is necessary that all countries act in a spirit of cooperation and resolve -- the trade issue bilaterally or multilaterally. He also noted that some of the trade issues are bilateral in nature and unless they are resolved the global economy faces negative prospect of growth slowing down. He added in that background, the negotiations taking place under the aegis of World Trade Organisation (WTO), among the trade ministers assumes very great significance and countries work out arrangements which are beneficial to all.

The CNX Nifty is currently trading at 10945.65, down by 1.60 points or 0.01% after trading in a range of 10923.00 and 10965.65. There were 20 stocks advancing against 29 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were TCS up by 2.68%, Bharti Infratel up by 2.47%, Tech Mahindra up by 2.42%, Indiabulls Housing up by 2.05% and Bajaj Auto up by 1.49%. On the flip side, Hindalco down by 2.38%, Vedanta down by 2.17%, Coal India down by 2.07%, Cipla down by 1.37% and SBI down by 1.29% were the top losers.

All the Asian markets are trading mostly in red; Nikkei 225 declined 201.24 points or 0.91% to 21,995.65, Straits Times dropped 27.49 points or 0.85% to 3,247.34, Hang Seng tumbled 412.53 points or 1.46% to 28,269.72, Taiwan Weighted shed 79.53 points or 0.74% to 10,677.36, KOSPI dipped 11.52 points or 0.50% to 2,282.64, Jakarta Composite slipped 18.40 points or 0.31% to 5,863.36 and Shanghai Composite was down by 52.85 points or 1.90% to 2,774.78.