Sensex, Nifty at day’s low

Indian equity benchmarks extended their losses in late afternoon session to reach at intraday low points, following weak European markets. Besides, heavy sell-off at FMCG, Basic Materials and Consumer Durables counters coupled with losses led by industry majors like Hindustan Unilever and Asian Paints, also dragged the key indices down in late noon deals. Adding some woes, ICRA in its latest report stated that India’s apparel exports are likely to remain subdued in the near term, even as the worst appears to be over. With the base effect setting in, ICRA expects India’s apparel exports to grow at a modest pace of 1%-2% Y-o-Y for the rest of FY2019, vis-a-vis a sharp de-growth of 14% Y-o-Y in first four months of FY2019. Some concerns also came after export credit provided by banks fell sharply by about 47% to Rs 21,900 crore as of July 20 from a year earlier. The persistent decline in export credit, especially to small players in the current year so far has raised fresh concerns about adequate financial support to exporters.

On the global front, European markets were trading in red, as the UK manufacturing sector expanded at the weakest pace in just over two years in August. The manufacturing Purchasing Managers’ Index dropped to 52.8 in August from 53.8 in July. The slowdown was driven by a contraction in new export orders for the first time since April 2016. Asian markets were trading in green, as Argentina announcing emergency measures to restore investor confidence in its government. Back home, in scrip specific development, ARSS Infrastructure Projects gained after the company’s Joint Venture (JV) ‘ARSS - TECHNOCOM - PRIYASHI AASHI’ bagged two work orders aggregating total of Rs 77.79 crore from Northeast Frontier Railway Construction Organisation.

The BSE Sensex is currently trading at 38139.43, down by 173.09 points or 0.45% after trading in a range of 38139.41 and 38518.56. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.57%, while Small cap index was down by 1.97%.

The only gaining sectoral indices on the BSE were IT up by 2.00% and TECK up by 1.42%, while FMCG down by 2.64%, Basic Materials down by 2.48%, Consumer Durables down by 2.36%, PSU down by 2.10% and Realty down by 2.08% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.23%, TCS up by 1.97%, Wipro up by 1.05%, Reliance Industries up by 0.59% and HDFC up by 0.58%. On the flip side, Hindustan Unilever down by 3.55%, Asian Paints down by 3.46%, SBI down by 2.59%, Indusind Bank down by 2.40% and Adani Ports & SEZ down by 2.25% were the top losers.

Meanwhile, highlighting that there was no direct link between demonetisation and the economic slowdown, Niti Aayog Vice Chairman Rajiv Kumar has said that the slowdown in the growth rate in six quarters starting from the last quarter of 2015-16 was due to rising non-performing assets (NPAs) in the banking sector and not because of the note ban drive.

Niti Aayog Vice Chairman further noted that credit disbursal to the industry got stalled on the back of rising NPAs and in the case of the micro, small and medium enterprises (MSME) industry, credit actually shrank. He further said that fall in Gross Domestic Product growth in two quarters immediately after demonetization was just simply in continuation of a declining trend and not because of the shock of demonetization.

Besides, Rajiv Kumar said that following the decline in growth rate, ramping up of capital expenditure was necessary to counter the decline in credit disbursal to industry players, adding that the government is compensating for this by ramping up public capital expenditure and so it has been because of the government there is a rise in the quarterly growth rate since the second quarter of 2017-18.

The CNX Nifty is currently trading at 11506.90, down by 75.45 points or 0.65% after trading in a range of 11501.90 and 11602.55. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.52%, TCS up by 2.29%, HCL Tech. up by 2.13%, Tech Mahindra up by 1.78% and Wipro up by 1.09%. On the flip side, Ultratech Cement down by 4.19%, Titan down by 3.82%, Grasim Industries down by 3.72%, Indiabulls Housing Finance down by 3.56% and Asian Paints down by 3.50% were the top losers.

Asian markets were trading mostly in green, Taiwan Weighted increased 57.16 points or 0.52% to 11,021.38, Hang Seng zoomed 260.80 points or 0.93% to 27,973.34, Shanghai Composite gained 29.85 points or 1.09% to 2,750.58 and KOSPI was up by 8.69 points or 0.38% to 2,315.72. On the flip side, Jakarta Composite decreased 73.54 points or 1.25% to 5,894.04, Straits Times fell 2.38 points or 0.07% to 3,204.82 and Nikkei 225 was down by 10.48 points or 0.05% to 22,696.90.

All European markets were trading in red; UK’s FTSE 100 decreased 0.65 points or 0.01% to 7,503.95, France’s CAC lost 24.28 points or 0.45% to 5,389.52 and Germany’s DAX was down by 37.93 points or 0.31% to 12,308.48.