Weak trade persists ahead of August F&O expiry

Weak trade continued in late afternoon session ahead of August F&O expiry, with Sensex and Nifty crumbling below their neutral lines, mirroring weak European markets. Domestic sentiments remained down on account of heavy selling at Banking, Energy and Consumer Durables counters. Traders also got cautious after the Reserve Bank of India (RBI) reiterated concerns over rising inflationary pressures this fiscal year due to global and domestic pressures and called for continuous vigil to keep them at bay. Anxiety also remained among the market participants as credit rating agency Moody's Investors Service said that India’s Fiscal deficit is likely to be wider than budgeted in the current financial year (FY19), amid rising oil prices and interest rates, cuts in the goods and services tax on some items and relatively high increases in minimum support prices for some crops. The street failed to take any sense of relief with Finance Minister Arun Jaitley’s statement that India is expected to surpass Britain next year to become world's fifth largest economy.

On the global front, European markets were trading in red, as Germany's consumer confidence is set to drop slightly in September, but the mood is likely to remain positive due to a stable job market. The survey data from the market research group GfK revealed that the forward-looking consumer sentiment index dropped to 10.5 in September from 10.6 in August. Asian markets were also trading in red, as worries over the Sino-US trade war persisted and investors looked ahead to the release of Chinese manufacturing data due Friday for direction. Back Home, in scrip specific development, ITI zoomed after receiving an Advance Work Order (AWO) from BSNL for the Operation and Maintenance and Sales & Marketing of the Passive Infrastructure of 6945 BTS sites of BSNL's GSM network in UP East, UP West, Uttarkhand and Tamilnadu Circles.

The BSE Sensex is currently trading at 38633.31, down by 89.62 points or 0.23% after trading in a range of 38604.33 and 38819.06. There were 14 stocks advancing against 16 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Utilities up by 1.29%, FMCG up by 0.80%, Basic Materials up by 0.71%, Metal up by 0.67% and Healthcare up by 0.67%, while Bankex down by 0.78%, Energy down by 0.74%, Consumer Durables down by 0.26%, Consumer Disc down by 0.20% and TECK down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.26%, Tata Steel up by 2.01%, ITC up by 1.50%, ONGC up by 1.30% and NTPC up by 1.14%. On the flip side, Indusind Bank down by 2.00%, Kotak Mahindra Bank down by 1.67%, Yes Bank down by 1.43%, Reliance Industries down by 1.27% and Asian Paints down by 1.22% were the top losers.

Meanwhile, amid robust consumption demand, the Reserve Bank of India (RBI) in its latest annual report has said that India remains a preferred destination for foreign direct investment (FDI). The apex bank highlighted that FDI inflows to India increased mainly due to higher flows into the various sectors such as communication services, retail and wholesale trade, financial services and computer services.

The report also showed that in terms of sources, FDI inflows were concentrated mostly in Mauritius and Singapore that accounted for about 61% of total equity investments, despite the phased implementation of an amended double taxation avoidance agreement with these countries effective from April 2017 to prevent evasion of taxes on income and capital gains.

As per the analysis report, manufacturing activity is gathering momentum on the back of new business, both domestic and export orders, rising capacity utilization and drawdown of inventories. In the services sector, the impulses of growth are broadening and expansion in employment conditions is generating anticipations of improvement in demand conditions. Besides, aggregate domestic demand is also being supported by steadily strengthening investment with a renewal of the capex cycle underway and a strong pick-up in exports in Q1.

The CNX Nifty is currently trading at 11659.10, down by 32.80 points or 0.28% after trading in a range of 11646.40 and 11698.80. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.52%, Sun Pharma up by 2.35%, UPL up by 2.20%, Tata Steel up by 2.09% and ITC up by 1.44%. On the flip side, Indusind Bank down by 1.90%, HPCL down by 1.75%, Kotak Mahindra Bank down by 1.69%, Eicher Motors down by 1.67% and Tech Mahindra down by 1.41% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted lost 5.82 points or 0.05% to 11,093.75, KOSPI decreased 1.68 points or 0.07% to 2,307.35, Jakarta Composite declined 42.07 points or 0.7% to 6,023.08, Hang Seng plunged 252.39 points or 0.9% to 28,164.05, Straits Times fell 12.19 points or 0.38% to 3,231.73 and Shanghai Composite was down by 31.55 points or 1.15% to 2,737.74. On the flip side, Nikkei 225 increased 21.28 points or 0.09% to 22,869.50.

All European markets were trading in red; UK’s FTSE 100 decreased 64.29 points or 0.86% to 7,498.92, France’s CAC fell 33.34 points or 0.61% to 5,467.99 and Germany’s DAX was down by 156.19 points or 1.26% to 12,405.49.