Benchmarks pare most of their initial losses to trade marginally lower

Indian equity benchmarks made a decent recovery and are trading with marginal losses in early deals. Sentiments remained dampened in initial trade as cautiousness crept in with report that India’s trade deficit soared to a near five-year high of $18 billion. The commerce ministry data showed that the country’s exports rose by 14.32% to $25.77 billion in July mainly on account of better performance of gems and jewellery sector as well as petroleum products, while imports during July were valued at $43.79 billion, a growth of 28.81% compared to $33.99 billion in the year ago period. Traders also remained concerned on India Ratings’ report that if the steep decline in the household savings rate -- which has fallen to 16.3% from 23.6% between fiscals 2012 and 2017 -- continues, it may pose a serious challenge to overall growth and the macroeconomic stability. However, losses remained capped with FICCI’s latest Economic Outlook Survey stated that the Indian economy is expected to grow at 7.4% in the current fiscal, higher than the previous year.

On the global front, Asian markets are trading in red, taking cues from losses on Wall Street after Chinese internet giant Tencent reported a fall in quarterly profit - a disappointing result that weighed on the tech space stateside. The US markets fell on Wednesday as investors turned risk-averse on disappointing earnings and escalating global tariff worries.

Back home, telecom stocks remained in focus on report that the Telecom Commission, apex decision-making body at the telecom department, is likely to meet on August 31 to discuss Trai’s recommendation on spectrum allocation. In scrip specific developments, Grasim Industries advanced on reporting 25% rise in Q1 consolidated net profit and Maruti Suzuki strengthened on inaugurating integrated water-supply system in Gujarat.

The BSE Sensex is currently trading at 37784.30, down by 67.70 points or 0.18% after trading in a range of 37644.97 and 37797.21. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index down by 0.08%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Utilities up by 0.87%, IT up by 0.60%, Power up by 0.49%, Healthcare up by 0.48% and PSU was up by 0.47% while, Metal down by 1.42%, Realty down by 1.16%, Basic Materials down by 0.55%, Consumer Durables down by 0.53% and Energy was down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.33%, Sun Pharma up by 1.27%, Mahindra & Mahindra up by 1.02%, Infosys up by 0.98% and Power Grid Corporation up by 0.93%. On the flip side, Vedanta down by 3.25%, Kotak Mahindra Bank down by 2.97%, Wipro down by 1.48%, ONGC down by 1.05% and Tata Steel down by 1.05% were the top losers.

Meanwhile, the industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey has forecasted that the India’s gross domestic product (GDP) growth is likely to expand at 7.4% in the current fiscal year (FY19), higher than the previous year. However, it said that rising oil prices are putting pressure on the current account, while global uncertainties around trade and financial markets carry serious risks for the rupee. Also, trade tensions between major economies are disturbing the global recovery.

The FICCI survey forecasts an annual median GDP growth at 7.4% for 2018-19, with a minimum and maximum range of 7.1% and 7.5%, respectively. It added that the projection is in line with the estimates put out by the Reserve Bank earlier this month. The expansion in the GDP was 6.7% (provisional) in 2017-18. On the growth in the first quarter of the current fiscal, it said the expansion in the economic activity would be 7.1%. On rupee front, it said the Indian currency will remain under strain. As per the report, the fair value of Indian Rupee vis-a-vis the US Dollar would be in the range of 65 to 66.

On the sectoral front, the industry body said the median growth forecast for agriculture and allied activities has been put at 3% for 2018-19. Although there has been some slippage in the monsoons during June and July, updated forecast for August and September indicate a pick-up in rainfall. Besides, industry and services sector are expected to grow by 6.9% and 8.3%, respectively in 2018-19. Talking about inflation, FICCI said the Consumer Price Index or retail inflation has been forecast at 4.8% for the year as whole. Further, the median growth forecast for IIP has been put at 6.5% for the year 2018-19.

The CNX Nifty is currently trading at 11416.25, down by 18.85 points or 0.16% after trading in a range of 11376.95 and 11419.30. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 3.32%, Axis Bank up by 2.39%, Cipla up by 1.97%, Bajaj Finance up by 1.77% and UPL up by 1.70%. On the flip side, Vedanta down by 3.16%, Kotak Mahindra Bank down by 3.09%, Hindalco down by 2.26%, Wipro down by 1.68% and Zee Entertainment down by 1.62% were the top losers.

Asian markets are trading in red; Nikkei 225 slipped 35.51 points or 0.16% to 22,168.71, Taiwan Weighted decreased 35.61 points or 0.33% to 10,681.14, Straits Times shed 16.71 points or 0.52% to 3,217.41, Jakarta Composite fell 12.14 points or 0.21% to 5,804.45, Hang Seng declined 167.93 points or 0.62% to 27,155.66, KOSPI dropped 21.39 points or 0.96% to 2,237.52 and Shanghai Composite was down by 23.66 points or 0.88% to 2,699.60.