Sensex, Nifty in red; Kotak Mahindra Bank top loser

Mirroring weak European markets, Indian equity benchmarks were trading in red territory in late afternoon session, impacted by fall in Capital Goods and Industrials stocks. The sluggish broader markets along with losses led by the major industry leaders like Kotak Mahindra Bank, Larsen & Toubro and TCS also weighed on the domestic sentiments. The market participants got cautious with a new World Bank’s study report stating that the government’s demonetisation during the third quarter of 2016-17 took away up to 7.3 percentage points of growth in the country’s Gross Domestic Product (GDP) for that period only, in districts dominated by informal activities. Some concerns also came with a recent ASSOCHAM-Ashvin Parekh Advisory Services LLP (APAS) joint study that a developed corporate bond market is the need of the hour for India as an 8% economic growth cannot be achieved without a robust corporate capex cycle, more so as sole reliance on bank loans is not warranted, particularly when bank lending has been squeezed.

On the global front, European markets were trading in red, as sentiments got hit with Euro area annual inflation accelerating in June, exceeding the European Central Bank's target of ‘below, but close to 2%. As per final data from Eurostat, the annual inflation rate rose to 2% from 1.9% in May, in line with the flash estimate release on June 29. Asian markets were also trading in red, as investors awaited new developments on global trade disputes. Larry Kudlow, US President Donald Trump's top economic adviser, blamed Chinese President Xi Jinping for blocking a US-China trade deal and suggested that the European Union will be offering a significant free trade offer during a visit to the US next week. Back home, in scrip specific development, Integra Engineering India traded higher after the company developed a new own product for various industrial applications.

The BSE Sensex is currently trading at 36311.04, down by 62.40 points or 0.17% after trading in a range of 36285.88 and 36515.58. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.73%, while Small cap index was down by 1.03%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.89%, FMCG up by 0.53% and Energy up by 0.07%, while Capital Goods down by 1.50%, Industrials down by 1.10%, IT down by 1.05%, Healthcare down by 1.03% and Basic Materials down by 0.83% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.46%, Yes Bank up by 2.03%, Vedanta up by 1.91%, ITC up by 1.71% and Adani Ports & SEZ up by 1.48%. On the flip side, Kotak Mahindra Bank down by 3.66%, Larsen & Toubro down by 2.16%, TCS down by 1.08%, Coal India down by 1.06% and Tata Steel down by 1.03% were the top losers.

Meanwhile, amid various measures taken to strengthen the banking system and tax reform which boost investment, the Asian Development Bank (ADB) in its latest report has said that Indian economy is on track to meet fiscal year 2018 projected growth of 7.3% and will further accelerate to 7.6% in 2019. An international development finance institution also forecasted that the growth in Asia and the Pacific’s developing economies will remain solid in 2018 and 2019 despite rising trade tensions.

ADB further said that even though rising trade tensions remain a concern for the region, protectionist trade measures implemented so far in 2018 have not significantly dented buoyant trade flows to and from developing Asia and added that prudent macroeconomic and fiscal policymaking will help economies across the region prepare to respond to external shocks, ensuring that growth in the region remains robust.

The report also noted that South Asia continues to be the fastest growing subregion, led by India, while in Southeast Asia, growth projections for the subregion remain unchanged at 5.2% in both 2018 and 2019, on the back of robust domestic demand. As per the report, Central Asia is growing faster than expected, prompting an upward revision to forecasts from 4.0% to 4.2% in 2018 and from 4.2% to 4.3% in 2019.

The CNX Nifty is currently trading at 10942.55, down by 37.90 points or 0.35% after trading in a range of 10936.95 and 11006.50. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Titan up by 2.67%, Yes Bank up by 2.52%, Bharti Airtel up by 2.43%, ITC up by 2.01% and Vedanta up by 1.84%. On the flip side, Hindalco down by 7.70%, Bharti Infratel down by 4.73%, Kotak Mahindra Bank down by 3.62%, Larsen & Toubro down by 2.47% and Cipla down by 2.10% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 29.51 points or 0.13% to 22,764.68, Taiwan Weighted was down by 7.08 points or 0.07% to 10,835.38, Jakarta Composite lost 26.48 points or 0.45% to 5,864.25, KOSPI fell 7.82 points or 0.34% to 2,282.29, Hang Seng plunged 106.56 points or 0.38% to 28,010.86 and Shanghai Composite declined 14.28 points or 0.51% to 2,772.98. On the flip side, Straits Times increased 32.79 points or 1% to 3,273.29.

European markets were trading mostly in red; France’s CAC decreased 23.40 points or 0.43% to 5,424.04 and Germany’s DAX fell 42.24 points or 0.33% to 12,723.70. On the flip side, UK’s FTSE 100 increased 16.63 points or 0.22% to 7,692.91.