Weakness in markets continue; Energy stocks fall

Weakness in the markets continued in late afternoon session, with Sensex falling around 80 points, on the back of weak European markets. Heavy losses led by Energy, Oil & Gas and Metal stocks, kept the domestic sentiments down, while Yes Bank plunged most among all industry majors with the losses of more than 6%. Anxiety remained on the street as Federation of Indian Export Organisations (FIEO) said that exporters are facing uncertainty due to continues depreciation of the Indian currency. FIEO President Ganesh Kumar Gupta said that exporters are not able to negotiate properly prices of goods in the global markets. Some concerns also came 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 - including Iran sanctions and drop in Venezuela production. However, downside side remained capped, supported by Union finance minister Arun Jaitley’s statement that the demonetisation of Rs 500 and Rs 1000 notes in November 2016, led to formalisation of economy, increased tax collection and higher growth. Some support also came with Niti Aayog Vice-Chairman Rajiv Kumar’s statement that the government is committed to fiscal discipline and added that the Prime Minister resisted the pressure to cut down excise duty on fuel despite rising oil prices.

On the global front, European markets were trading in red, as Eurozone economic confidence deteriorated more-than-expected in August. The survey results from European Commission showed that the economic sentiment index dropped to 111.6 in August from 112.1 in July. Asian markets were also trading in red, despite China's official manufacturing PMI came in higher than expected in August. The manufacturing PMI stood at 51.3 in the month, beating forecasts for a score of 51.0 and up from 51.2 in July. Back home, in scrip specific development, KEC International gained after the company secured new orders of Rs 1,010 crore across its businesses.

The BSE Sensex is currently trading at 38613.14, down by 76.96 points or 0.20% after trading in a range of 38562.21 and 38838.45. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.12%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.30%, IT up by 1.40%, TECK up by 1.11%, Power up by 0.94% and Utilities up by 0.75%, while Energy down by 1.72%, Oil & Gas down by 0.58%, Metal down by 0.54%, Realty down by 0.32%, Bankex down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.81%, Tata Motors - DVR up by 2.71%, Tata Motors up by 2.66%, Power Grid Corporation up by 2.22% and Wipro up by 1.94%. On the flip side, Yes Bank down by 6.08%, Reliance Industries down by 2.72%, Mahindra & Mahindra down by 1.49%, Maruti Suzuki down by 1.12% and Tata Steel down by 0.89% were the top losers.

Meanwhile, highlighting the impact of the demonetisation on reduction of cash transactions, Niti Aayog Vice-Chairman Rajiv Kumar has said that the government is committed to fiscal discipline and added that the Prime Minister resisted the pressure to cut down excise duty on fuel despite rising oil prices.

Rajiv Kumar further said that the note ban has impacted the markets and market psychology and the move has encouraged digital payments. He also underlined that the objective of the note ban exercise was not to have a large number of unreturned Rs 500 and 1,000 notes but to reduce cash transactions and promote digitization.

On the inflation front, Kumar said that retail inflation, which includes fuel and food, is lower than core inflation, adding that inflation is well under control and the government is constantly on vigil on these issues. He also noted that inflationary impact of an oil price rise, or that of minor exchange rate decline is not that high, because there can be a supply response to that.

The CNX Nifty is currently trading at 11666.65, down by 10.15 points or 0.09% after trading in a range of 11640.10 and 11727.65. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Lupin up by 4.72%, Dr. Reddy’s Lab up by 4.41%, Tech Mahindra up by 3.83%, UPL up by 3.28% and Tata Motors up by 2.76%. On the flip side, Yes Bank down by 5.71%, Reliance Industries down by 2.74%, Bajaj Finance down by 2.67%, Bajaj Finserv down by 2.60% and Zee Entertainment down by 1.71% were the top losers.

Asain markets were trading mostly in red; Taiwan Weighted decreased 29.81 points or 0.27% to 11,063.94, Jakarta Composite fell 32.90 points or 0.55% to 5,986.06, Hang Seng plunged 275.50 points or 0.99% to 27,888.55, Straits Times declined 11.98 points or 0.37% to 3,213.74, Shanghai Composite lost 12.49 points or 0.46% to 2,725.25 and Nikkei 225 was down by 4.35 points or 0.02% to 22,865.15. On the flip side, KOSPI was up by 15.53 points or 0.67% to 2,322.88.

All European markets were trading in red; UK’s FTSE 100 decreased 12.90 points or 0.17% to 7,503.13, France’s CAC fell 36.00 points or 0.66% to 5,442.06 and Germany’s DAX was down by 111.41 points or 0.9% to 12,382.83.