Domestic equities erase gains to trade in red terrain

Domestic equity benchmarks erased all of their initial gains to trade in red terrain, mirroring weak global clues. A level of pressure was seen on banking stocks, especially in ICICI Bank, Yes Bank and IndusInd Bank, while Mid-caps and Small-caps have also turned negative. Investors were on the sidelines as a private report stated that India’s rural wage growth has slumped from an average of 11% in the financial years 2013-15 to a mere 0.45% in the financial years 2016-18, due to the negative impact of demonetization. The rural wage growth slumped to decimal points from double-digit in last three years despite government support. Some pessimism also came with a report that the government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. However, the losses remained capped as traders were getting some solace with Commerce Ministry’s statement that National Logistics Portal is being developed to ensure ease of trading in the international and domestic markets, as India eyes lowering logistics cost from 14% of GDP to less than 10% by 2022.

On the global front, Asian markets were trading mostly in red, after trade talks between Washington and Beijing ended without any progress. Beside, investors are keeping an eye on Powell's speech at Jackson Hole symposium. Back home, in scrip specific development, Tata Investment Corporation strengthened on reporting 25% rise in Q1 net profit. Beside, Ashok Leyland gained on winning tender for Defence Tracked Combat Vehicle for developmental work and marks the company’s foray into tracked vehicle business.

The BSE Sensex is currently trading at 38290.95, down by 45.81 points or 0.12% after trading in a range of 38276.59 and 38429.50. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.11%, while Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were Power up by 0.58%, Basic Materials up by 0.53%, Metal up by 0.50%, Utilities up by 0.35% and PSU was up by 0.30%, while FMCG down by 0.49%, Bankex down by 0.34%, IT down by 0.30%, Telecom down by 0.24% and TECK was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.18%, Power Grid up by 1.74%, Coal India up by 1.23%, Axis Bank up by 1.01% and Wipro was up by 0.79%. On the flip side, ICICI Bank down by 1.47%, Yes Bank down by 1.36%, IndusInd Bank down by 1.04%, Sun Pharma down by 0.77% and Infosys was down by 0.59% were the top losers.

Meanwhile, in order to ensure ease of trading in the international and domestic markets, the Commerce Ministry has said that a National Logistics Portal is being developed. India's logistics sector is highly defragmented and the aim is to reduce the logistics cost from the present 14% of GDP to less than 10% by 2022.  The portal will link all the stakeholders of export-import, domestic trade and all trade activities on a single platform, thereby generating jobs, increasing trade competitiveness and helping the country transform into a logistics hub.

Further, stakeholders like traders, manufacturers, logistics service providers, infrastructure providers, financial services, government departments and groups and associations will all be on one platform, once the portal is created. The National Logistics portal will be implemented in phases and in the first phase it seeks to implement the logistics e-market place. Other main components of the portal include a logistics certification platform, an integrated regulatory platform and a banking and financial services platform.

The ministry underlined that the logistics e-market place will allow a trader or exporter to plan end to end shipment route, check availability, enquire the rates make bookings for a wide range of services such as freight forward, ocean freight, truck, warehouse, air freight, ICD services and packaging services, exchange e-contract, generate invoice, pay electronically, and monitor physical flow of goods.

The CNX Nifty is currently trading at 11561.30, down by 21.45 points or 0.19% after trading in a range of 11558.65 and 11604.60. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were UPL up by 2.85%, ONGC up by 1.63%, Power Grid up by 1.55%, Grasim Industries up by 1.11% and Coal India was up by 1.06%. On the flip side, ICICI Bank down by 1.81%, Yes Bank down by 1.75%, Hindalco down by 1.38%, Titan Company down by 1.38% and Cipla was down by 1.30% were the top losers.

Asian Markets were trading mostly in red, Hang Seng declined 121.40 points or 0.44% to 27,669.06, Shanghai Composite slipped 9.64 points or 0.36% to 2,714.98, Jakarta Composite dropped 19.78 points or 0.33% to 5,963.21, Straits Times fell 20.15 points or 0.62% to 3,229.74 and Taiwan Weighted was down by 61.66 points or 0.57% to 10,801.47.

On the other side, KOSPI gained 8.23 points or 0.36% to 2,290.83 and Nikkei 225 was up by 168.84 points or 0.75% to 22,579.66.