Indices continue to trade in negative zone

Indian equity markets continued to trade in negative zone in early noon session, with Sensex and Nifty posting losses of around 0.30%. The drop in the indices was mainly due to the decline in share prices of blue-chip stocks such as HDFC, HDFC Bank, Infosys, ITC and TCS. Traders also remained cautious ahead of RBI’s monetary policy announcement on August 1. Investors continued to have a cautious approach towards Moody’s Investors Service’s report which stated that the GST Council’s decision to lower rates on several goods and also rationalise rates on some services will impact government’s fiscal consolidation effort. Traders took note of Niti Aayog CEO Amitabh Kant’s statement that Agriculture sector must grow at 4 per cent or higher in order to achieve GDP growth rate of 8-10 per cent. Meanwhile, the Trump administration’s decision to place India in the Strategic Trade Authorisation-1 list of countries, that eases export of high-tech items, acknowledges the security as well as economic relationship between the two largest democracies of the world, and boosts the defence partnership in a big way.

On the global front, Asian markets were trading mostly in green despite negative cues from the rout in global technology shares while the yen edged higher ahead of the Bank of Japan’s rate review, at which it could flag a shift away from its massive monetary stimulus. Back home, S&P Global Ratings stated that India’s infrastructure deficit is “too large” and the country still has a long way to go before it can close the sizeable deficit between supply and demand. In scrip specific development, shares of InterGlobe Aviation slipped after the company posted a 97% plunge in its net profit for the first quarter ended June, 2018.

The BSE Sensex is currently trading at 37363.76, down by 130.64 points or 0.35% after trading in a range of 37298.75 and 37534.95. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.06%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Realty up by 1.39%, Healthcare up by 0.70%, Utilities up by 0.45%, Consumer Disc up by 0.33% and Power up by 0.29%, while Metal down by 0.60%, Bankex down by 0.49%, Basic Materials down by 0.42%, Oil & Gas down by 0.31% and FMCG down by 0.22% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.56%, Sun Pharma up by 1.53%, Bajaj Auto up by 1.31%, Asian Paints up by 1.27% and NTPC up by 0.90%. On the flip side, Tata Motors - DVR down by 2.38%, Axis Bank down by 1.71%, Tata Motors down by 1.65%, Vedanta down by 1.62% and HDFC down by 1.61% were the top losers.

Meanwhile, Union Minister of Petroleum & Natural Gas Dharmendra Pradhan has said that the government is focusing on biofuels such as first and second generation ethanol, biodiesel and bio-CNG as part of its various measures for easing the price of crude oil import, increasing income of farmers and environmental benefits. He also informed that the government is also focusing on increasing domestic production of oil and gas, capitalising untapped potential in bio-fuels and other alternate fuels, and implementing measures for refinery process improvements.

The minister has stated that the government has notified the National Policy on Biofuels 2018, which permits use of damaged food grains for production of ethanol for blending with petrol. He also said that there is also a provision to allow surplus food grains for ethanol production during the surplus phase as decided by the National Biofuel Coordination Committee.

Pradhan further said that many different sources must be there for energy. He also said that the government continues to modulate the effective price of domestic LPG supplies to domestic consumers under the Direct Benefit Transfer of LPG. He noted that the domestic price of LPG in the country is based on international price of LPG (ie. Saudi contract price) and is not linked to the cost of crude oil.

The CNX Nifty is currently trading at 11284.20, down by 35.35 points or 0.31% after trading in a range of 11267.75 and 11312.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 4.04%, Sun Pharma up by 1.56%, Dr. Reddys Lab up by 1.54%, Cipla up by 1.40% and HCL Tech up by 1.36%. On the flip side, Indiabulls Housing down by 2.59%, BPCL down by 2.19%, Axis Bank down by 1.97%, HPCL down by 1.86% and Eicher Motors down by 1.80% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted increased 23.97 points or 0.22% to 11,057.51, KOSPI increased 1.75 points or 0.08% to 2,295.26, Nikkei 225 increased 8.88 points or 0.04% to 22,553.72, Straits Times increased 11.24 points or 0.34% to 3,318.39 and Shanghai Composite increased 1.88 points or 0.07% to 2,870.93. On the flip side, Hang Seng decreased 152.33 points or 0.53% to 28,580.80 and Jakarta Composite decreased 79.77 points or 1.34% to 5,948.17.