Last hour sell-off drag benchmarks lower

Indian equity benchmarks ended the lackluster day of trade of trade with a cut of around half a percent on account of selling occurred in last leg of trade. Markets made a cautious start and traded in very tight range near neutral lines for most part of the day, as traders remained on sidelines  ahead of August F&O expiry on Thursday. Traders also remained cautious 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. However, markets somehow managed to restrict their losses, as market participants took some support with Care Ratings in its latest report bet on a higher GDP growth April-June quarter as compared to the last year. Meanwhile, the department of industrial policy and promotion (DIPP) has effectively ruled out foreign direct investment (FDI) in inventory-based ecommerce, allaying concerns raised by those opposed to such a move, even as it agreed with the need for a regulator to oversee the sector.

But it was selling in final hour of trade which played spoil sports for the Indian markets and dragged frontline gauges below their crucial 11,700 (Nifty) and 38,800 (Sensex) levels. Sentiments turned pessimistic with the credit rating agency, India Ratings’ latest report stating that the widening current account deficit (CAD), which is projected to cross 2.6% of GDP this year, coupled with the rupee plunge, is likely to increase borrowing costs for corporates and bring down the overall volume of fresh forex loans. Sentiments also remain dampened with Credit rating agency Moody's Investors Service report that there are risks of India breaching the 3.3% fiscal deficit target for the current financial year as higher oil prices will add to short-term fiscal pressures. Anxiety persisted on street after the Reserve Bank of India in its annual report said that bad loans for the banking sector are likely to increase in 2018-19 from the current levels of around 11.5%.

Weakness in European counters too dampened sentiments despite report that France’s consumer confidence held steady for the second straight month in August, in line with expectations. As per survey data from the statistical office Insee, the consumer sentiment came in at 97 in August, the same reading as in the previous two months. Asian counters ended mostly in green, though gains remained capped, as optimism over the US-Mexico trade deal was quickly replaced by caution ahead of a looming deadline on tariffs with China.

Back home, telecom sector stocks remained in focus with a report that India Ratings and Research (Ind-Ra) has maintained a negative-to-stable outlook on telecom sector for the rest of FY19, saying weak revenue per user and high capex will continue to suppress the sectoral credit outlook. Tourism sector remained 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. Meanwhile, Lupin edged lower, while JSW Steel rallied after NSE Indices on Tuesday announced a rejig in the benchmark Nifty50 index by replacing pharma stock Lupin with JSW Steel from September 28, 2018.

Finally, the BSE Sensex declined 173.70 points or 0.45% to 38,722.93, while the CNX Nifty was down by 46.60 points or 0.40% to 11,691.90.

The BSE Sensex touched a high and a low of 38,989.65 and 38,679.57, respectively and there were 13 stocks advancing against 18 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.47%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Metal up by 1.11%, Realty up by 1.09%, Basic Materials up by 0.68%, PSU up by 0.66% and Oil & Gas was up by 0.23%, while Energy down by 1.13%, Telecom down by 0.71%, TECK down by 0.50%, IT down by 0.41% and Healthcare was down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.58%, SBI up by 1.54%, Tata Motors - DVR up by 0.83%, Tata Steel up by 0.80% and ICICI Bank up by 0.53%. On the flip side, Coal India down by 2.58%, Reliance Industries down by 1.80%, Power Grid Corporation down by 1.58%, Yes Bank down by 1.44% and Indusind Bank down by 1.36% were the top losers.

Meanwhile, for the second phase of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India scheme (FAME India II), the Finance Ministry has approved a sizeable amount as provision. Union Minister Anant Geete has said that the biggest concern currently is charging facilities for an electric vehicle. Therefore, they are providing charging facilities free of cost in public places and government offices to encourage people to adopt electric mobility.

Geete said they have accorded priority to public transport, especially buses, taxis and three-wheelers, including auto-rickshaws in FAME. Similarly, they are also seriously thinking about government vehicles (switching to electric vehicle technology). The minister said about 300 charging stations have been established till now for electric vehicles. The Department of Heavy Industry had allocated 455 electric buses to selected cities and special category states through expression of interest recently.

Besides, the modalities of the scheme have been finalised by an inter-ministerial panel and it will soon be placed before the Union Cabinet for approval. Meanwhile, Prime Minister Narendra Modi will launch on September 7 the second phase of the FAME India scheme, offering incentives for mass adoption of electric vehicles with an outlay of Rs 5,500 crore.

The CNX Nifty traded in a range of 11,753.20 and 11,678.85. There were 20 stocks in green as against 30 stocks in red on the index.

The top gainers on Nifty were UPL up by 4.87%, Bajaj Finance up by 1.96%, SBI up by 1.47%, ONGC up by 1.32% and GAIL up by 0.97%. On the flip side, Coal India down by 2.85%, Power Grid Corporation down by 2.08%, Lupin down by 1.99%, Reliance Industries down by 1.90% and Indusind bank down by 1.58% were the top losers.

European markets were trading in red; France’s CAC shed 3.11 points or 0.06% to 5,481.88, Germany’s DAX fell 2.20 points or 0.02% to 12,525.22 and UK’s FTSE 100 was down by 34.95 points or 0.46% to 7,582.27.

Asian equity markets ended mostly higher on Wednesday. Japanese markets ended higher as technology shares advanced along with their Wall Street counterparts. Meanwhile, investors are awaited cues from high-stakes talks between the US and Canada as well as China's official factory PMI due Friday. Canada's Foreign Minister Chrystia Freeland has arrived in Washington to resume talks about the future of the three-nation North American Free Trade Agreement or NAFTA, after the US and Mexico agreed to a new trade deal on Monday. Though, Chinese shares closed lower after the country's state planner warned of increased economic risks in the second half of the year and said that greater efforts are needed to hit key development goals.