Sensex, Nifty in red; Telecom, Realty fall

Equity markets failed to hold gains in late afternoon session with the both indices Sensex and Nifty slipping into red terrain, despite firm cues from European markets. The broader markets were too following the sluggish larger peers, while Telecom, Realty and Basic Materials continued to fall in late noon deals. Energy and IT stocks too have given up some of their gains. Domestic sentiments got hit by weak microeconomic data of CPI inflation and factory output. India’s retail inflation surged to five-month high of 5% in June 2018, for the third straight month, as compared to 4.87% in May, while India’s industrial production measured by Index of Industrial Production (IIP) declined to a seven-month low of 3.2% in the month of May 2018, as compared to a revised 4.8% growth in April. Traders took note of outgoing Chief Economic Adviser Arvind Subramanian’s statement that the country needs more reforms.  He said ‘We need to do more. We need to think about how to improve governance, more private sector participation.’

On the global front, European markets were trading in green, tracking overnight gains on Wall Street amid elevated expectations of strong US earnings. However, the euro remained sluggish after ECB minutes from the Governing Council's June meeting showed broader support to keep interest rates lower, as long as needed, and to keep the end of QE unconditional on incoming data. Further, Asian markets were also trading in green, after data showed China's trade grew by double digits in June despite mounting tensions with Washington. Back home, in scrip specific development, RS Software touched the roof on emerging as L1 (lowest) Bidder in the reverse online auction conducted by National Payments Corporation of India (NPCI) for development and operation of platform for EFRM.

The BSE Sensex is currently trading at 36544.04, down by 4.37 points or 0.01% after trading in a range of 36528.05 and 36740.07. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.84%, while Small cap index was down by 1.41%.

The only gaining sectoral indices on the BSE were Consumer Durables up by 0.80%, Energy up by 0.67% and IT up by 0.17%, while Telecom down by 1.46%, Realty down by 1.37%, Basic Materials down by 1.22%, PSU down by 1.02% and Industrials down by 0.91% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.27%, Maruti Suzuki up by 1.12%, Coal India up by 1.00%, HDFC Bank up by 0.85% and Kotak Mahindra Bank up by 0.80%. On the flip side, Axis Bank down by 2.58%, ONGC down by 2.23%, ITC down by 2.17%, ICICI Bank down by 2.17% and SBI down by 2.06% were the top losers.

Meanwhile, in order to identify various items and policy interventions to curb import dependence, the government has set up a high-level task force under the chairmanship of Cabinet Secretary P K Sinha. The task force includes secretaries from departments of commerce, industrial policy and promotion, skill development, revenue, defence production, steel, petroleum, electronics and telecommunications. It would suggest ways to cut import of those items which can be manufactured or explored in the country.

The move assumes importance as India is highly dependent on imports of several items such as oil, electronic hardware, machinery, ingredients for pharmaceuticals, gold and chemicals. On an average, India's imports stand at around $450 billion per year. During 2017-18, the inbound shipments grew about 20 percent to $460 billion. Besides, oil imports recorded a growth of 25.47 percent to $109.11 billion in the last fiscal.

Although increase in imports of intermediates and raw materials reflects boost in economic activities, inbound shipments of final goods impact domestic manufacturers. Besides, there are some concerns over India’s high dependence on China for active pharmaceutical ingredients (APIs) which are used as raw material ingredients to prepare finished medicines. At present, over 60 percent of APIs are imported from China.

The CNX Nifty is currently trading at 11013.05, down by 10.15 points or 0.09% after trading in a range of 10999.75 and 11071.35. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Titan up by 3.25%, BPCL up by 1.93%, Bajaj Finance up by 1.73%, Reliance Industries up by 1.41% and Maruti Suzuki up by 1.18%. On the flip side, UPL down by 4.98%, Zee Entertainment down by 3.66%, Axis Bank down by 2.92%, ITC down by 2.42% and Bharti Infratel down by 2.39% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 zoomed 409.39 points or 1.81% to 22,597.35, KOSPI increased 25.84 points or 1.12% to 2,310.90, Taiwan Weighted soared 126.16 points or 1.16% to 10,864.54, Straits Times was up by 8.20 points or 0.25% to 3,261.21, Hang Seng rose 44.61 points or 0.16% to 28,525.44 and Jakarta Composite gained 10.98 points or 0.19% to 5,918.85. On the flip side, Shanghai Composite decreased 6.11 points or 0.22% to 2,831.55.

All European markets were trading in green, UK’s FTSE 100 increased 46.89 points or 0.61% to 7,698.22, France’s CAC surged 23.17 points or 0.43% to 5,429.07 and Germany’s DAX gained 42.20 points or 0.34% to 12,535.17.