Benchmarks continue lackluster trade slightly in red

Indian equity benchmarks continued their lackluster trade slightly in red in afternoon session, as cautiousness remained in markets ahead of Futures and Options (F&O) derivative expiry for August series due tomorrow. Investors’ sentiments remain dented with a private report that the Indian economy is in for a rough ride, with rising oil prices set to continue weighing on its already-weakened currency, widen its deficit, and affect its growth outlook. The rupee has also come under pressure, hitting a fresh record low of 70.50 against US dollar in early trade at the forex market, tracking weakness in Asian peers and on strong month-end dollar demand. However, losses were limited as traders found some support with Care Ratings in its latest report bet on a higher GDP growth April-June quarter as compared to the last year. On the sectoral front, tourism sector was in focus with private report stating that the state tourism industry, which has estimated a total loss of Rs 2,000 crore due to property damages in the deluge and loss of business during July-September period, is hoping to limp back on track by October.

On the global front, Asian markets were trading mostly in green, following little movement overnight in the U.S. and Europe. Back home, the BSE Sensex is currently trading at 38870.12, down by 26.51 points or 0.07% after trading in a range of 38841.09 and 38989.65. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Realty up by 1.45%, Metal up by 1.37%, Basic Materials up by 0.84%, PSU up by 0.71% and Oil & Gas up by 0.63%, while TECK down by 0.40%, IT down by 0.38%, Telecom down by 0.31%, FMCG down by 0.22% and Capital Goods down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.47%, ONGC up by 1.46%, SBI up by 1.41%, Tata Steel up by 1.16% and Vedanta up by 1.13%. On the flip side, Coal India down by 2.46%, HDFC Bank down by 1.05%, Indusind Bank down by 1.01%, NTPC down by 0.86% and Infosys down by 0.81% were the top losers.

Meanwhile, Insurance Regulatory and Development Authority of India (IRDAI) has constituted ten-member committee in June 2018 to look into regulations on Insurance Marketing Firms (IMFs). The committee has recommended for relaxing norms for insurance agent to insurance service provider switch and if the recommendations of a committee are considered, the individuals could soon be allowed to shift from being insurance agents to insurance service providers (ISP).

The committee has said that the practice of paying Rs 5,000 as fixed salary to ISPs should continue. It also said that an insurance agent is tied to and works for one company only and can sell only that firm's products. On the other hand, an ISP can through the IMF tie-up with two life, two general and two standalone health insurers. ISPs get a fixed remuneration while agents receive commissions for the products sold. Besides, it suggested that in case of migration from an agent to ISP, the continuation of renewal commission/benefits post-surrender of the individual agency will be as per the board approved policy of the insurance companies. Individual insurance agents don’t earn a fixed remuneration whereas ISPs do.

The committee report further said that presently, it is difficult to convince any individual agent who is an eligible candidate to be an ISP of an IMF, since that entails him to surrender his individual agency licence. It also said that this will result in the individual losing his/her renewal commission as per the present practice of the insurance companies.

The CNX Nifty is currently trading at 11727.95, down by 10.55 points or 0.09% after trading in a range of 11715.80 and 11753.20. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were UPL up by 2.82%, Yes Bank up by 1.73%, ONGC up by 1.46%, SBI up by 1.36% and Vedanta up by 1.15%. On the flip side, Coal India down by 2.56%, Indusind Bank down by 1.07%, HDFC Bank down by 0.93%, Eicher Motors down by 0.90% and Infosys down by 0.88% were the top losers.

Asian markets were trading mostly in green; Straits Times increased 1.23 points or 0.04% to 3,248.78, Taiwan Weighted rose 110.02 points or 0.99% to 11,099.57, KOSPI surged 5.91 points or 0.26% to 2,309.03 and Nikkei 225 was up by 34.75 points or 0.15% to 22,848.22.

On the flip side, Jakarta Composite decreased 33.74 points or 0.56% to 6,008.91, Hang Seng was down by 22.37 points or 0.08% to 28,329.25 and Shanghai Composite shed 12.06 points or 0.44% to 2,765.92.