Sluggish trade continues on D-street; Realty, Telecom stocks drag

Sluggish trade continued on Dalal-street in the early noon session as FIIs and DIIs were on a selling spree after the RBI hiked the repo rate by 25 bps to 6.5 per cent yesterday. Besides, selling in Realty, Telecom and Auto stocks dragged the markets lower. Traders remained cautious with report stating that Goods and services tax (GST) collection rose in July but stayed well below the government’s target of Rs 1 trillion for a third month in succession of the current financial year (starting April 1). Meanwhile, a report stated that India’s central bank governor raised the prospect of global currency wars as he led policy makers in raising interest rates to the highest in two years to shore up the rupee and tackle inflation pressures in the world’s fastest-growing major economy.

On the global front, all the Asian markets were trading under pressure as the latest escalation in the Sino-US trade war hit Chinese shares, while global bond markets were rattled by increased borrowing by Washington and Japan's new tolerance for higher yields. Back on the domestic front, stocks related to agriculture were in focus with a report stating that the farm exports have risen dramatically, reversing the trend of falling trade surpluses in the last three years, providing a major fillip to PM Narendra Modi’s dream of doubling farmers’ income by 2022.

The BSE Sensex is currently trading at 37325.80, down by 195.82 points or 0.52% after trading in a range of 37229.99 and 37529.69. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.24%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.65%, Consumer Durables up by 0.33%, PSU up by 0.15%, FMCG up by 0.12% and Power up by 0.10%, while Realty down by 1.02%, Telecom down by 0.85%, Auto down by 0.77%, Energy down by 0.64% and Bankex down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.90%, Sun Pharma up by 1.60%, Hindustan Unilever up by 1.44%, Coal India up by 0.94% and Tata Motors - DVR up by 0.87%. On the flip side, Bharti Airtel down by 2.02%, Vedanta down by 1.54%, Reliance Industries down by 1.44%, Maruti Suzuki down by 1.29% and HDFC down by 1.25% were the top losers.

Meanwhile, Union Minister of Finance Piyush Goyal has said that the government has decided to withdraw the contentious Financial Resolution and Deposit Insurance (FRDI) Bill, 2017 following widespread public anxiety with regard to the ‘bail-in’ clause to resolve a failing bank and insurance cover on bank deposits. The bill was introduced in the Lok Sabha in August 2017 and subsequently sent to a joint committee of both houses for legislative scrutiny.

The minister has informed that the stakeholders including public have raised worries relating to the provisions of the FRDI Bill, like the use of bail-in instrument to resolve a failing bank, the adequacy of deposit insurance cover and the felt need to revive the insurance limits substantially, and application of resolution framework for public sector banks. He also said that resolution of these issues would take a lot of time and added that the bill will have to be re-examined.

A Joint Parliamentary Committee headed by Bhupendra Yadav, agreed with the proposal of the government to withdraw the bill. The FRDI Bill sought to make an enabling law for creation of an independent Resolution Corporation to carry out speedy and efficient resolution of financial firms in distress, providing deposit insurance to consumers of certain categories, monitoring of the systemically important financial institutions and protecting the consumers to the extent possible.

The CNX Nifty is currently trading at 11291.45, down by 54.75 points or 0.48% after trading in a range of 11263.55 and 11328.90. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 2.23%, Lupin up by 2.11%, HPCL up by 2.09%, Sun Pharma up by 1.85% and BPCL up by 1.62%. On the flip side, Bharti Airtel down by 2.25%, Reliance Industries down by 1.51%, HCL Tech. down by 1.48%, Vedanta down by 1.40% and Tech Mahindra down by 1.37% were the top losers.

All the Asian markets were trading in red; Jakarta Composite decreased 11.60 points or 0.19% to 6,021.82, Taiwan Weighted dropped 168.36 points or 1.54% to 10,929.77, KOSPI contracted 35.43 points or 1.56% to 2,271.64, Nikkei 225 slipped 234.17 points or 1.04% to 22,512.53, Straits Times declined 48.52 points or 1.48% to 3,280.49, Hang Seng dipped 603.42 points or 2.18% to 27,737.32 and Shanghai Composite was down 74.91 points or 2.72% to 2,749.62.