Local bourses continue to trade lacklustre

Indian equities continued weakness to trade below neutral lines in the late afternoon session on account of selling in front line counters. Selling was witnessed in Yes Bank, ICICI Bank and Adani Ports, while buying in front line stocks like Vedanta, ONGC and Wipro capped the losses. Some concern came with private report that Raghuram G. Rajan, who warned of a credit crisis in 2005 before it hit, is now cautioning that trade wars when combined with a build-up in leverage and high asset prices could result in a toxic mix that dragged global growth. However, losses were limited as traders found some support with that India is seeking to boost the aspirational value of jobs such as plumbing, carpentry and beautician to make more people employable in a market with one of the world’s largest working-age populations.

On the global front, European markets are trading in green with a report that the European Union will scrap import controls on solar panels and cells from China in September, rejecting a request from EU producers who argue that the bloc will be opening its doors to a flood of dumped products. Asian markets are trading mixed at this point of time. On domestic turf, Lupin gained on getting EIR from USFDA for inspection of its Nagpur facility, Vedanta surged on planning to expand alumina refinery in Odisha by using use alternate bauxite resources as it looks beyond the failed Niyamgiri experiment.

The BSE Sensex is currently trading at 38269.49, down by 67.27 points or 0.18% after trading in a range of 38172.77 and 38429.50. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.28%, while Small cap index was down by 0.25%.

The top gaining sectoral indices on the BSE were Metal up by 1.11%, Basic Materials up by 0.59%, Energy up by 0.58%, Oil & Gas up by 0.35% and Power was up by 0.32%, while Bankex down by 0.71%, Consumer Durables down by 0.70%, FMCG down by 0.50%, IT down by 0.43% and Utilities was down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.14%, ONGC up by 2.04%, Wipro up by 1.21%, Axis Bank up by 1.17% and Coal India was up by 0.81%. On the flip side, Yes Bank down by 3.24%, ICICI Bank down by 1.94%, Adani Ports by 1.80%, Indusind Bank down by 1.59% and Hero MotoCorp was down by 1.55% were the top losers.

Meanwhile, international rating agency Moody’s Investors Service in its latest report has said that the launch of government’s flagship health insurance scheme, Ayushman Bharat, is credit positive for India’s insurers as it will help grow health premiums and provide insurers with cross-selling and servicing opportunities. The Ayushman Bharat-National Health Protection Mission (AB-NHBM) will be launched on September 25, 2018. The scheme will cover over 100 million poor families and would provide a health insurance coverage of up to Rs 500,000 per family per year for secondary and tertiary care hospitalisation.

As per the report, health insurance contributes around 23% of general insurance premiums and is one of insurers main drivers of growth. Health premiums have grown at a compound annual growth rate of 18% during financial year 2011-12 to 2016-17. As of FY17, only 440 million people were covered under health insurance schemes, and the rating agency expects the AB-NHBM to increase that number by 500 million.

However, Moody’s said out of the 29 states, 23 have chosen to run the scheme as a trust model, which will diminish insurers’ growth prospects. It expects that insurers with scale advantages and track records of managing large insurance schemes will benefit from the health programme. Trust models entail government funds being allocated to a trust fund rather than to insurance premiums, and the trust fund making disbursements for claims, rather than insurers disbursing claims. When the trust fund is depleted, the government will need to provide additional funds.

The CNX Nifty is currently trading at 11560.10, down by 22.65 points or 0.20% after trading in a range of 11532.00 and 11604.60. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.21%, ONGC up by 1.83%, Bharti Infratel up by 1.59%, Grasim Industries up by 1.25% and Axis Bank was up by 1.18%. On the flip side, Yes Bank down by 3.37%, Titan down by 2.66%, ICICI Bank down by 2.00%, Adani Ports down by 1.96% and Hero MotoCorp was down by 1.79% were the top losers.

Asian markets are trading mixed, Straits Times fell 34.62 points or 1.08% to 3,215.27, Jakarta Composite lost 24.03 points or 0.4% to 5,958.96, Taiwan Weighted tumbled 53.78 points or 0.5% to 10,809.35 and Hang Seng was down by 118.59 points or 0.43% to 27,671.87. On the flip side Shanghai Composite jumped 4.81 points or 0.18% to 2,729.43, KOSPI surged 10.61 points or 0.46% to 2,293.21 and Nikkei 225 was up by 190.95 points or 0.84% to 22,601.77.

European markets are trading mostly in green, France’s CAC increased 8.04 points or 0.15% to 5,427.37 and Germany’s DAX was up by 6.62 points or 0.05% to 12,372.20, while UK’s FTSE 100 was down by 0.06 points to 7,563.16.