Local equities trade flat in morning session

Local equity benchmarks traded flat in the morning session. PSU, Energy and Telecom counters witnessed notable losses, while Basic Materials and Consumer Disc sectors edged higher. A level of pressure was seen on frontline stocks, especially Adani Ports, SBI and Coal India. Investors were on the backfoot on a report stating that the rupee is over-valued and the fair value of the local currency is 70-71 to a greenback. The widening current account deficit and higher interest rates have made the rupee the worst among its Asian peers so far this year. Meanwhile, FPIs buying equities worth over Rs 248 crore on Monday and domestic institutional investors purchasing shares with a net value of Rs 218.64 crore. However, losses remained capped as traders were getting some solace with ICRA’s report that revenues of Indian corporates have grown by 22% in the June quarter from a year ago. It added that the increase in revenues has been attributed to the strong growth in both consumer-based industries.

On the global front, Asian markets were trading mostly in green, followed gains on Wall Street, as strong corporate profits helped to defuse fears over US-China trade tensions. Back on domestic turf, on the sectoral front, banking stocks fell marginally, despite a private report stated that the government will hold talks with the Reserve Bank of India about relaxing capital requirements for banks and bringing them in line with the less-stringent Basel-III norms. In scrip specific development, L&T gained with its construction arm bagging orders worth Rs 1,904 crore. Besides, Indiabulls Housing Finance advanced on raising Rs 1,000 crore via Non-Convertible Debentures.

The BSE Sensex is currently trading at 37682.48, down by 9.41 points or 0.02% after trading in a range of 37669.69 and 37876.87. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.23%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.71%, Consumer Disc up by 0.36%, Metal up by 0.29%, Consumer Durables up by 0.19%, TECK was up by 0.14%, while PSU down by 0.80%, Energy down by 0.78%, Telecom down by 0.61%, Oil & Gas down by 0.57% and Power was down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.73%, Vedanta up by 1.23%, Tata Steel up by 1.01%, Tata Motors - DVR up by 0.85% and Larsen & Toubro was up by 0.68%. On the flip side, Adani Ports & SEZ down by 4.76%, Coal India down by 2.07%, SBI down by 1.12%, Bharti Airtel down by 1.11% and Reliance Industries was down by 0.79% were the top losers.

Meanwhile, Indian auto component manufacturing industry sought uniform 18 percent Goods and Services Tax (GST) rate across the sector and stated that low taxation would not only ensure better compliance, but would also ensure a larger tax base. Besides, it said that the lower tax levy would also help in curtailing flourishing of grey operations in the aftermarket.

Automotive Component Manufacturers Association of India (ACMA) President Nirmal Minda has indicated that presently, 60 percent of the components attract 18 percent GST rate, while the rest 40 percent, majority of which are two-wheelers, and tractor components attract 28 percent. He also elaborated that there is a need for creating a fund to support indigenous R&D and technology creation in the component industry as also for technology acquisition from other parts of the world. Minda said “As we prepare for the introduction of electric mobility in the country, a well-defined, technology agnostic road map with clear responsibilities of each stakeholder will go a long way in ensuring a smooth roll out as also leading to creation of a local supply base for the same.”

According to ACMA, the Indian auto components industry registered a growth of 18.3 percent to Rs 3.45 lakh crore for the first time in the financial year 2017-18. Also, exports of auto components grew by 23.9 percent to Rs 90,571 crore from Rs 73,128 crore in 2016-17.

The CNX Nifty is currently trading at 11391.55, up by 4.45 points or 0.04% after trading in a range of 11377.20 and 11428.95. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.64%, Ultratech Cement up by 1.86%, Grasim Industries up by 1.39%, Zee Entertainment up by 1.03% and Titan Company was up by 0.98%. On the flip side, Adani Ports & SEZ down by 4.48%, Coal India down by 2.05%, Cipla down by 1.54%, HPCL down by 1.21% and SBI was down by 0.97% were the top losers.

Asian markets were trading mostly in green; KOSPI gained 4.89 points or 0.21% to 2,291.39, Hang Seng strengthened 263.87 points or 0.94% to 28,083.43, Straits Times advanced 52.95 points or 1.59% to 3,338.29, Nikkei 225 rose 132.67 points or 0.59% to 22,639.99 and Shanghai Composite was up by 38.55 points or 1.41% to 2,743.71.

On the other hand, Taiwan Weighted decreased 23.47 points or 0.21% to 11,000.63 and Jakarta Composite was down by 16.34 points or 0.27% to 6,084.79.