Markets trade flat; Energy, PSU major losers

Indian equity benchmarks traded flat in afternoon session, as investors turned cautious amid escalating global trade war concerns. The sentiments remained in lackluster mood with president of the International Economic Association, and former chief economist at the World Bank, Kaushik Basu’s statement that in the event of US-China currency war there will be a sideline effect on India and a depreciation of the rupee, which, if managed well by policymakers, will be good for the country. However, traders took some support with report with rating agency 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 such as consumer goods, and auto; and commodity sectors such as cement, iron, steel, and oil and gas. On the sectoral front, stocks related to tea sector edged lower after ICRA stating that higher wage rates for tea estate workers is likely to impact the operating cost of bulk tea players significantly.

On the global front, Asian markets were trading mostly in green, following another positive Wall Street lead. Back home, the BSE Sensex is currently trading at 37683.80, down by 8.09 points or 0.02% after trading in a range of 37586.88 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 was down by 0.30%, while Small cap index was down by 0.26%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.47%, Consumer Disc up by 0.34%, Consumer Durables up by 0.31%, Metal up by 0.29% and Auto up by 0.21% while, Energy down by 0.68%, PSU down by 0.61%, Telecom down by 0.58%, Oil & Gas down by 0.56%, Power down by 0.54% were the losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.99%, Yes Bank up by 1.76%, Tata Steel up by 1.28%, Vedanta up by 0.94% and Larsen & Toubro up by 0.68%. On the flip side, Adani Ports &SEZ down by 6.32%, Coal India down by 2.10%, Bharti Airtel down by 1.05%, Sun Pharma down by 0.69% and Reliance Industries down by 0.67% were the top losers.

Meanwhile, in order to look into issues related to the proposed mega free trade deal -- Regional Comprehensive Economic Partnership (RCEP), the government will set up a four-member group of ministers (GoM). The RCEP bloc comprises 10 Asean group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six Free Trade Agreement (FTA) partners - India, China, Japan, South Korea, Australia and New Zealand. 

The development assumes significance as Indian industry and exporters have raised anxieties about the presence of China in the grouping, with which India has huge trade deficit. India had trade deficit with as many as 10 member countries, including China, South Korea and Australia, of the RCEP grouping of 16 nations which have been negotiating a mega trade pact since November 2012. The trade gap with China, Korea, Indonesia and Australia has increased to $63.12 billion; $11.96 billion; $ 12.47 billion and $10.16 billion in 2017-18. It was $51.11 billion, $8.34 billion, $9.94 billion and $8.19 billion respectively in the previous financial year, 2016-17.

Giving zero duty access to China would led to flooding of Chinese goods in the domestic market and impact the manufacturing sector. The mega trade pact aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights. Pressure is also mounting on member countries including India for early conclusion of the proposed free trade pact. Member countries are looking to conclude the talks by end of this year but a lot of issues are yet to be finalised including the number of products over which duties will be eliminated. Domestic steel and other metal industries want these sectors to be kept out of the deal. Under services, India wants greater market access for its professionals in the proposed agreement.

The CNX Nifty is currently trading at 11395.45, up by 8.35 points or 0.07% after trading in a range of 11359.70 and 11428.95. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 1.99%, Yes Bank up by 1.87%, Grasim Industries up by 1.62%, Tata Steel up by 1.59% and Ultratech Cement up by 1.56%. On the flip side, Adani Ports &SEZ down by 6.05%, Coal India down by 2.28%, HPCL down by 1.29%, BPCL down by 1.21% and Cipla down by 1.02% were the top losers.

Asian markets were trading mostly in green, Straits Times increased 61.54 points or 1.84% to 3,346.88, Hang Seng surged 396.32 points or 1.4% to 28,215.88, Shanghai Composite rose 58.74 points or 2.13% to 2,763.90, KOSPI inched up 13.66 points or 0.59% to 2,300.16 and Nikkei 225 was up by 155.42 points or 0.69% to 22,662.74.

On the flip side, Jakarta Composite decreased 9.60 points or 0.16% to 6,091.53 and Taiwan Weighted was down by 40.66 points or 0.37% to 10,983.44.