Indian equity markets ended lower on Friday, after touching record highs in the previous session, following weak trend in global markets. Today, the markets are likely to make gap-down opening on Monday, amid subdued global cues following a slump in the Turkish lira, as US President Donald Trump doubled steel and aluminum tariffs on Turkey, raising concerns the country may plunge into a financial crisis. Traders will be eyeing the macro data of retail inflation for July scheduled to be announced post market hours. However, traders will be getting some encouragement later in the trade, with report that India’s industrial output recorded a five-month high growth of 7% in June as against 3.9% in May, as production of consumer durables and capital goods picked up pace ahead of festival season. There will be some support with report that foreign investors have pumped in over Rs 8,500 crore into the Indian capital markets in the last eight trading sessions on improvement in crude oil prices, stabilising rupee and better corporate earnings. Traders will also be reacting on report that India’s economic growth will improve further in the coming quarters due to recovery in domestic demand as also the investment cycle. There will be some buzz in the Steel sector stocks with Joint Plant Committee’s (JPC) latest report showing that India’s crude steel output grew 6% to 8.73 million tonne (MT) during July 2018, as compared to 8.22 MT crude steel produced during the same month a year ago. There will be some cautiousness in the power sector stocks, with Crisil’s latest report that India will not be able to achieve its ambitious target of generating 100GW solar power by 2022.
The US markets ended lower on Friday, amid concerns over the ongoing slide of the Turkish liraand fears the country’s economic and political crisis could spread to Europe and elsewhere. Asian markets were trading in red on Monday as a renewed rout in the Turkish lira drove demand for safe harbours, including the US dollar, Swiss franc and yen.
Back home, 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. 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.
