Bourses maintain losing momentum in early noon session

Domestic bourses maintained their losing momentum in the early noon session as investors turned cautious ahead of expiry of August month derivatives later in the day. Selling in Bankex, Energy and Realty stocks were dragging the markets lower. Meanwhile, Indusind Bank and Kotak Mahindra Bank were amongst the top losers on both NSE and BSE. Domestic sentiments were also hit as rupee slipped to a fresh record low against the American currency and as crude oil prices rose due to drop in US crude inventories and expected supply disruptions from Iran and Venezuela. Sentiments also weakened as foreign institutional investors (FIIs) sold shares worth a net Rs 1415.87 crore on August 29, 2018, as per provisional data from the stock exchanges. Besides, investors’ sentiment continued to remain pessimistic with Credit rating agency Moody’s Investors Service report highlighting 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.

On the global front, barring Japan and South Korea all other Asian counters were trading in red. Japanese stocks edged higher for the eighth straight day after U.S. stocks extended their rally overnight amid optimism over trade-talks. Back home, broader indices were trading in green. Amongst the Mid cap stocks, Petronet LNG and Jindal Steel & Power stocks were gaining the most and amongst the Small cap stocks Chambal Fertilisers & Chemicals and CESC were gaining.

The BSE Sensex is currently trading at 38685.44, down by 37.49 points or 0.10% after trading in a range of 38624.23 and 38819.06. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.40%, while Small cap index up by 0.33%.

The top gaining sectoral indices on the BSE were Metal up by 1.34%, Basic Materials up by 0.91%, FMCG up by 0.74%, Utilities up by 0.54% and Telecom up by 0.53%, while Bankex down by 0.56%, Energy down by 0.42%, Realty down by 0.31%, IT down by 0.21% and TECK down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.25%, ONGC up by 1.83%, ITC up by 1.34%, Bharti Airtel up by 1.17% and Vedanta up by 1.14%. On the flip side, Indusind Bank down by 1.79%, Kotak Mahindra Bank down by 1.54%, Yes Bank down by 1.09%, Axis Bank down by 0.93% and Reliance Industries down by 0.89% were the top losers.

Meanwhile, economic affairs secretary Subhash Chandra Garg has said that the demonetisation of Rs 500 and Rs 1000 notes in November 2016 achieved the objectives quite substantially as it helped curb black money flows, even as the RBI reported most of the demonetised currency was back with the banks. As per the RBI's annual report, as much as 99.3 percent of the demonetised notes have returned to the banking system.

Garg has mentioned that objectives of the note ban like checking black money, terror financing, promoting digital transaction and weeding out fake currency notes have been achieved. He noted that over the last one year and 10 months, there has not been a single high quality fake note in the system as a result of a new security feature in notes. Besides, he stressed that there is no currency shortage in any part of the country. On the cost of printing and transport of new notes post note ban, he said RBI spends about Rs 4,000-5,000 crore annually on currency but in the last fiscal it spent Rs 8,000 crore. He stated that with this the process of demonetisation is complete and added that physical currency at present was 87-88% of what it would have been had the pre-demonetisation trend continued, which is Rs 3-4 lakh crore less money in circulation.

Talking about old notes with Nepal, Economic affairs secretary said that no final decision had been taken on the issue so far. He also said that the perception that lot of people may be holding banned currency notes outside India is not correct. He said “The non-citizen have no right to hold it in first place... therefore there is no legal provision to take it back.” He added that there are small quantities of notes that are with enforcement agencies and some in court cases.

The CNX Nifty is currently trading at 11671.00, down by 20.90 points or 0.18% after trading in a range of 11656.80 and 11698.80. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.26%, UPL up by 2.07%, ONGC up by 2.03%, GAIL India up by 1.40% and Bharti Airtel up by 1.36%. On the flip side, Tech Mahindra down by 1.84%, Indusind Bank down by 1.76%, Kotak Mahindra Bank down by 1.67%, HCL Tech down by 1.53% and HPCL down by 1.32% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 21.08 points or 0.65% to 3,222.84, Taiwan Weighted declined 5.82 points or 0.05% to 11,093.75, Hang Seng dropped 274.51 points or 0.98% to 28,141.93, Jakarta Composite slipped 0.35 points or 0.01% to 6,064.80 and Shanghai Composite was down 18.02 points or 0.65% to 2,751.27.

Bucking the trend, KOSPI increased 2.44 points or 0.11% to 2,311.47 and Nikkei 225 increased 21.28 points or 0.09% to 22,869.50.