Indian benchmarks trade in red zone; Sensex tanks over 100 points

Indian equity benchmarks slipped into red zone in the early noon session with Nifty and Sensex posting losses of 23.90 and 105.20 points, respectively due to selling in Energy, Metal and Bankex stocks. Along with these sectors, even Oil and Gas sector was trading lower after the International Energy Agency (IEA) said crude oil prices are likely to rise further in 2018 and may remain above $75 a barrel for some time, owing to the geo-political situations across the world. Investors will cautiously look forward to the release of June-quarter GDP data, due later in the day. The domestic markets were under pressure following the fresh worries of another trade tariffs battle between US and China. Domestic sentiments were also hit as rupee crashed to a new low of 71 due to dollar demand and rising crude oil prices. Investors remain concerned with a private report stating that the rupee’s slide past the 70 mark to the US dollar has prompted Indian importers to seek medium-term cover for overseas payment liabilities as fears grow that the local unit is unlikely to rebound in a hurry. Adding to the woes, a report stated that despite world-beating GDP growth, the government is facing job creation challenge for middle class workforce. 

On the global front, Asian markets were trading mostly in red on trade war fears. Japanese Nikkei edged lower after report that Japan’s factory output fell for a third straight month in July due to slowing exports of cars and steel and flooding that disrupted production, compounded by global trade tensions that cloud the export-reliant economy’s outlook. Back on the domestic front, stocks related to Power sector were trading in green with ICRA in its latest report stating that the all-India electricity demand rose 7.4 percent in July 2018 on a year-on-year (Y-o-Y) basis as per the provisional estimates of the Central Electricity Authority (CEA).

The BSE Sensex is currently trading at 38584.90, down by 105.20 points or 0.27% after trading in a range of 38566.81 and 38838.45. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.09%, while Small cap index up by 0.09%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.51%, IT up by 1.02%, TECK up by 0.86%, Consumer Durables up by 0.40%, Power up by 0.39% while, Energy down by 1.38%, Metal down by 0.69%, Bankex down by 0.67%, Realty down by 0.61%, Basic Materials down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.99%, Sun Pharma up by 1.80%, Infosys up by 1.32%, Wipro up by 1.31% and Indusind Bank up by 0.92%. On the flip side, Yes Bank down by 5.78%, Reliance Industries down by 2.46%, Vedanta down by 2.00%, ICICI Bank down by 1.34% and Mahindra & Mahindra down by 1.18% were the top losers.

Meanwhile, credit rating agency, ICRA in its latest report has said that the all-India electricity demand rose 7.4 percent in July 2018 on a year-on-year (Y-o-Y) basis as per the provisional estimates of the Central Electricity Authority (CEA). However, it said that thermal plant load factor (PLF) or capacity utilisation moderated to 55.5 percent in July 2018 from 60.7 percent in June 2018, on account of higher generation from wind and hydro sources, leading to backing down of thermal units.

The rating agency has stated apart from a few months in between, the monthly electricity demand growth has remained higher than 5 percent over the past 15 months, reflecting a sustained recovery in demand. It also expects that this demand growth trend is likely to continue, given the focus of the central government on improving rural household electrification. However, it noted that the thermal PLF remains sensitive to the generation from renewable energy sources and coal supply available from domestic sources.

According to the report, in the first four months of FY19, the thermal power segment did not witness any capacity addition, while the hydro and renewable energy segment added 110 MW and 1,742 MW, respectively during this period. Besides, it expects the capacity addition from the thermal segment to remain subdued and to be mainly driven by the central and state sector. With an improved tariff competitiveness and strong policy thrust, it said that the renewable energy segment would remain a major driver of capacity addition in the power sector in the medium term.

The CNX Nifty is currently trading at 11652.90, down by 23.90 points or 0.20% after trading in a range of 11643.20 and 11727.65. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.94%, Tech Mahindra up by 2.47%, Dr. Reddys Lab up by 2.45%, Bharti Infratel up by 2.04% and Lupin up by 1.98%. On the flip side, Yes Bank down by 5.79%, Reliance Industries down by 2.33%, Vedanta down by 1.76%, Bajaj Finance down by 1.56% and Mahindra & Mahindra down by 1.38% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 10.47 points or 0.33% to 3,215.25, Taiwan Weighted declined 29.81 points or 0.27% to 11,063.94, Hang Seng slipped 262.44 points or 0.94% to 27,901.61, Jakarta Composite plunged 71.61 points or 1.2% to 5,947.35, Shanghai Composite decreased 5.60 points or 0.2% to 2,732.14 and Nikkei 225 was down 4.35 points or 0.02% to 22,865.15.

Bucking the trend, KOSPI was up 9.06 points or 0.39% to 2,316.41.