Markets trade at day's low; Nifty below 11,450 mark

Extending their early losses, the local equity markets continued weak trade and were now trading at day’s low points in afternoon session, as the Indian rupee weakens to fresh record low against the dollar. Sentiment on the street weakened further with report that India's services sector activity fell in August from July's 21-month peak as new business orders declined, following which firms raised their staffing levels at a modest pace amid rising input cost inflation. The Nikkei/IHS Markit Services Purchasing Managers’ Index declined to 51.5 in August from a 21-month high of 54.2 in July. 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.  Adding some woes, 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%. On the sectoral front, textile sector remained in focus after ICRA said that apparel exports are likely to remain subdued with the base effect setting in and due to uncertain government policies. India’s apparel exports are expected to fall 4 per cent this fiscal even as they are expected to register a modest growth of 2 percent in the remaining eight months of the financial year.

On the global front, Asian markets are trading in red, as heightened worries over international trade conflicts curbed investor appetite for riskier assets. Back home, the BSE Sensex is currently trading at 37927.91, down by 230.01 points or 0.60% after trading in a range of 37924.23 and 38250.61. 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 1.49%, while Small cap index was down by 1.38%.

The top losing sectoral indices on the BSE were Consumer Durables down by 2.72%, Telecom down by 2.28%, Realty down by 2.24%, Capital Goods down by 1.64% and Industrials down by 1.50%, while there were no gaining stocks on BSE.

The top gainers on the Sensex were ITC up by 1.08%, Wipro up by 0.94%, Yes Bank up by 0.90%, Sun Pharma up by 0.89% and Bajaj Auto up by 0.70%. On the flip side, Tata Motors - DVR down by 3.08%, Coal India down by 2.25%, Tata Motors down by 1.93%, Hindustan Unilever down by 1.92% and Kotak Mahindra Bank down by 1.85% were the top losers.

Meanwhile, the government will not cut excise duty on petrol and diesel to cushion consumers from spiralling prices, which touched all-time record highs, as it has limited fiscal space available to take any dent in revenue collections. With imports becoming costlier because of rupee's free fall against the US dollar, the government believes the current account deficit will overshoot the target and it cannot disturb fiscal maths by cutting excise duty on petrol and diesel.

Talking on the relentless price rise, former finance minister P Chidambaram has said that relentless rise in prices of petrol and diesel is not inevitable, because the price is built up by excessive taxes on petrol and diesel. He also said that if taxes are cut, prices will decline significantly.

Petrol and diesel prices touched fresh highs on September 04, 2018, as rupee hit record low of 71.54, making imports costlier. Petrol price in Delhi rose to a record Rs 79.31 a litre and diesel climbed to an all-time high of Rs 71.34, renewing calls for a cut in excise duty to cushion the spike. According to a price notification of state-owned fuel retailers, petrol price was hiked by 16 paise per litre and diesel by 19 paise. Fuel rates have been on fire since mid-August, rising almost every day due to a combination of a drop in rupee value and rise in crude oil rates.

The CNX Nifty is currently trading at 11441.15, down by 79.15 points or 0.69% after trading in a range of 11436.15 and 11542.65. There were 11 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.00%, UPL up by 0.99%, Wipro up by 0.94%, Yes Bank up by 0.94% and Bajaj Auto up by 0.59%. On the flip side, Indiabulls Housing Finance down by 3.06%, Bharti Infratel down by 2.75%, Titan Co down by 2.49%, Coal India down by 2.15% and HPCL down by 1.90% were the top losers.

All Asian markets are trading in red, Straits Times decreased 38.54 points or 1.22% to 3,171.97, Taiwan Weighted fell 26.25 points or 0.24% to 10,995.13, Hang Seng dropped 652.00 points or 2.39% to 27,321.34, Shanghai Composite shed 33.44 points or 1.23% to 2,717.14, KOSPI decreased 23.95 points or 1.05% to 2,291.77, Jakarta Composite dipped 237.71 points or 4.19% to 5,667.59 and Nikkei 225 was down by 116.07 points or 0.51% to 22,580.83.