Benchmarks trade slightly in red in early deals

Indian equity benchmarks made a cautious start and are trading slightly in red in early deals on Wednesday amid weak global cues. Traders remained on sidelines ahead of Services PMI data for the month of August to be out later in the day. Traders remained concerned about a report that the National Council of Applied Economic Research’s (NCAER) business confidence index (N-BCI) fell by 12.9% in July over April this year on a quarter-on-quarter basis on account of worsening of business sentiments across various segments. NCAER said the decline in the N-BCI on a year-on-year basis works out to be 15.9%. Some cautiousness also crept in with a private report that India’s growth rate is expected to moderate this fiscal despite a strong start in the April-June quarter largely owing to tighter financial conditions, limited fiscal headroom and upcoming elections.

Global cues too remained sluggish with Asian markets trading in red at this point of time following the negative cues overnight from Wall Street amid worries about trade wars and the turbulence in emerging market currencies. The US markets ended lower on Tuesday as investors were anxious about the trade tensions between Washington and its key trading partners.

Back home, traders reacted negatively on the Reserve Bank of India’s (RBI) data showing that investment by Indian companies in their overseas ventures fell by more than 36% to $1.39 billion in July this year. In scrip specific developments, Texmo Pipes gained on bagging order worth Rs 81.30 crore from L&T and  Muthoot Finance edged higher on raising funds up to Rs 5000 crore via NCDs.

The BSE Sensex is currently trading at 38119.54, down by 38.38 points or 0.10% after trading in a range of 38089.52 and 38250.61. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.54%, while Small cap index down by 0.49%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.67%, IT up by 0.17%, TECK up by 0.04% and Energy was up by 0.02%, while Consumer Durables down by 1.01%, Realty down by 0.88%, FMCG down by 0.87%, Metal down by 0.78% and Telecom was down by 0.74% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.04%, Wipro up by 1.00%, Bajaj Auto up by 0.48%, Power Grid Corporation up by 0.34% and Infosys up by 0.31%. On the flip side, Coal India down by 2.38%, Hindustan Unilever down by 1.69%, ONGC down by 0.98%, Indusind Bank down by 0.91% and Vedanta down by 0.80% were the top losers.

Meanwhile, the industry body, Confederation of Indian Industry (CII) has stated that India’s economic growth of 8.2% in the first quarter of 2018-19 is an outcome of key reforms initiated by the government like Goods and Services Tax (GST) and liberalisation of Foreign Direct Investment (FDI) norms. It also said that India can garner a Gross Domestic Product (GDP) growth of 7.3-7.7% for the ongoing financial year with the help of increase in private investment and enhanced government spending.

CII President Rakesh Bharti Mittal said that the country could see strong demand contributing to higher GDP growth this fiscal with good monsoons so far. He noted that GST, reforms in Ease of Doing Business, FDI, labour, agriculture, and many other initiatives aimed at improving the overall investment climate and productivity have begun to show impact. He added ‘These have collectively contributed to the robust GDP figures that we saw for June quarter 2018-19. At 8.2% it is a significant improvement over the 5.6% registered a year back.’

As per the CII President, the reforms have also led to increased demand leading to better capacity utilisation and higher growth of the industry, which again is reflected in manufacturing growth at an impressive 13% plus in the first quarter. However, he said that a few external challenges remain, in the form of oil prices and hardening interest rates in the US, but domestic strengths are robust enough to ensure that India would ride over any bumps on the road. CII claimed that the results of a poll conducted among its National Council CEOs are the most positive in a long time.

The CNX Nifty is currently trading at 11504.20, down by 16.10 points or 0.14% after trading in a range of 11492.05 and 11542.65. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.75%, Wipro up by 1.04%, GAIL India up by 0.97%, UPL up by 0.94% and Dr. Reddys Lab up by 0.78%. On the flip side, Coal India down by 2.13%, Hindustan Unilever down by 1.77%, Indiabulls Housing down by 1.66%, Zee Entertainment down by 1.55% and Bharti Infratel down by 1.53% were the top losers.

Asian markets are trading in red; Nikkei 225 decreased 61.57 points or 0.27% to 22,635.33. Taiwan Weighted slipped 5.58 points or 0.05% to 11,015.80, Straits Times decreased declined 26.11 points or 0.82% to 3,184.40, Jakarta Composite tumbled 192.91 points or 3.38% to 5,712.39, Hang Seng dropped 461.20 points or 1.68% to 27,512.14, KOSPI shed 3.68 points or 0.16% to 2,312.04 and Shanghai Composite was down by 25.32 points or 0.93% to 2,725.26.