Benchmarks end lower on Friday; Sensex breaches 37,900 mark

Indian equity benchmarks ended the Friday’s trade in red terrain, snapping their two days record winning streak, with frontline gauges breaching their crucial 37,900 (Sensex) and 11,450 (Nifty) levels. Sentiments remained dampened since morning, as key gauges made a pessimistic start with traders remained on sidelines ahead of industrial production data for June scheduled to be announced post market hours. Investors also remained cautious after data released by the India Meteorological Department (IMD) showed that 39% of the 681 districts in India have received less than normal rainfall in the week ended August 8. Selling got intensified in last leg of trade on account of selling in banking stocks led by sharp selloff in State Bank of India (SBI) after the bank reported a consolidated net loss of Rs 4,230.44 crore for the quarter ended June 30, 2018, as compared to net profit of Rs 3,031.88 crore for the same quarter in the previous year. On standalone basis, the bank reported a net loss of Rs 4,875.85 crore for the quarter under review as compared to a net profit of Rs 2,005.53 crore for the same quarter in the previous year.

Traders paid no heed towards a private report stating that the production and manufacturing sector saw a 60% rise year-on-year (Y-o-Y) in recruitment in July. Market participants failed to get any sense of relief with the Lok Sabha passing four bills to amend the GST law, as Finance Minister Piyush Goyal said lower tax rates will improve compliance and enhance revenue collection. He said tax collection will not come down despite reduction in taxes as he allayed the concerns to that effect raised by some members and added that the lower rates will rather improve compliance and enhance revenue collection. Meanwhile, the Securities and Exchange Board of India (SEBI) in its annual report for 2017-18 has said that it is planning to put in place measures to curb insider trading and misuse of unpublished price-sensitive information through timely announcements by listed companies.

Weak opening in European counters too dampened sentiments with all the major indices trading in red in early deals, as investors reacted to corporate earnings, fresh turmoil for Turkey and continued fears of a trade war between the US and China. Asian markets ended mostly in red, as investors fretted about rising trade tensions between the US and China as well as the new set of US sanctions on Russia.

Back home, pharma stocks edged lower, even though the commerce ministry’s latest data showed that India’s pharmaceutical exports rose only 3% to $17.3 billion in last financial year (FY18), as compared to $16.7 billion in FY17, while in financial year 2016 exports were $16.9 billion. However, auto stocks edged higher, despite domestic passenger vehicle (PV) sales lost speed in the month of July 2018, with the decline of 2.71% on year on year basis. As per the Society of Indian Automobile Manufacturers (SIAM) data report, domestic PV sales decreased to 2,90,960 units in July 2018 from 2,99,066 units in July 2017.

Finally, the BSE Sensex shed 155.14 points or 0.41% to 37,869.23, while the CNX Nifty was down by 41.20 points or 0.36% to 11,429.50.

The BSE Sensex touched a high and a low of 38,051.45 and 37,815.75, respectively and there were 12 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.80%, while Small cap index was down by 0.78%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.79%, IT up by 0.50%, TECK up by 0.34%, Auto up by 0.26% amd Consumer Discretionary Goods & Services up by 0.17%, while Metal down by 2.01%, Basic Materials down by 1.58%, Utilities down by 1.41%, PSU down by 1.36% and Capital Goods down by 1.18% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.41%, Mahindra & Mahindra up by 1.26%, TCS up by 0.98%, ITC up by 0.94% and Kotak Mahindra Bank up by 0.71%. On the flip side, SBI down by 3.79%, Sun Pharma down by 3.00%, Vedanta down by 2.97%, Tata Motors down by 2.82% and Tata Motors - DVR down by 2.23% were the top losers.

Meanwhile, Minister of State for Civil Aviation Jayant Sinha stated that an amount of Rs 268.10 crore has been collected as levy from various airlines towards the regional air connectivity scheme or UDAN (Ude Desh ka Aam Nagrik) till August 3, 2018. He also said that all scheduled airline operators have been remitting the regional connectivity scheme (RCS) levy.

Sinha noted that the scheme seeks to connect unserved and under-served airports as well as make flying more affordable for the people. To fund the scheme, he said an amount of Rs 5,000 is collected from airlines on every flight operated on major routes. He also said that no revenue has been earned by the Regional Air Connectivity Fund Trust (RACFT) under the scheme except for deposits of RCS levy.

The minister further stated that the Tourism Ministry has requested for introduction of ‘cities/ towns/ places of tourist importance’ under the scheme. He also said that many routes awarded under UDAN are already operational. He added that Deccan Air and Air Odisha stopped their services in four sectors due to technical snag and slot allocation issues.

The CNX Nifty traded in a range of 11,478.75 and 11,419.65. There were 19 stocks in green as against 31 stocks in red on the index.

The top gainers on Nifty were Eicher Motors up by 5.15%, BPCL up by 3.10%, HPCL up by 1.69%, Mahindra & Mahindra up by 1.18% and HCL Technologies up by 0.98%. On the flip side, SBI down by 4.63%, Vedanta down by 3.56%, Tata Motors down by 3.04%, GAIL India down by 3.00% and Sun Pharma down by 2.99% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 shed by 34.31 points or 0.45% to 7,707.46 and France’s CAC dipped 56.94 points or 1.05% to 5,445.31 and Germany’s DAX was down by 181.74 points or 1.45% to 12,494.37.

Asian equity markets ended mostly in red on Friday as investors fretted about rising trade tensions between the US and China as well as the new set of US sanctions on Russia. A diplomatic rift between the US and Turkey also kept underlying sentiments cautious. Japanese shares fell sharply to hit one-month low, with a firmer yen and heavy selling in the technology sector weighing on markets. The yen rose against the dollar as trade worries persisted and data showed the country's economy grew more than expected in the second quarter, driven by higher consumer spending and business investment. Though, Japan's GDP expanded a seasonally adjusted 0.5 percent sequentially in the second quarter of 2018, the Cabinet Office said in a preliminary reading. That exceeded expectations for an increase of 0.3 percent following the 0.2 percent loss in the three months prior. However, Chinese ended higher with technology companies leading after China revamped a national leadership group charged with planning and studying its key technological development strategies.