Weak global cues drag benchmarks lower in early deals

Indian equity benchmarks made a pessimistic start and are trading with a cut of over half a percent, breaching their crucial 38,200 (Sensex) and 11,550 (Nifty) levels in early deals on Monday, following Asian markets after US President Donald Trump raised the stakes in the heated trade dispute with China. Sentiments remained downbeat with the State Bank of India’s (SBI) report that with the currency losing more than 11% to the dollar this year, India will have to shell out an extra Rs 68,500 crore when repaying short-term debt in the coming months. Weakness in rupee too dampened sentiments as it opened at fresh record low of Rs 72.27/$. The Indian rupee has seen sharp depreciation against the US dollar last week, but managed to recover on Friday to close the week at 71.74. Traders shrugged off the Reserve Bank of India’s (RBI) data showing that India’s current account deficit (CAD) as a percentage of GDP declined marginally to 2.4% in the April-June quarter of 2018-19 against 2.5% in the year-ago period.

On the global front, Asian markets are trading mostly in red at this point of time as trade tensions between the US and China remains in focus. The US markets declined on Friday amid ongoing trade concerns after President Donald Trump suggested he may impose tariffs on another $267 billion worth of Chinese goods.

Back home, steel sector stocks are exhibiting mixed trend with report that India may impose anti-dumping duty of up to $185.51 per tonne for five years on certain varieties of Chinese steel with a view to guard domestic players from cheap imports of the commodity from the neighbouring country. In scrip specific developments, NTPC surged with R&D arm inking MoA with CIPET and Glenmark Pharma gained with arm securing marketing authorization in Germany.

The BSE Sensex is currently trading at 38191.82, down by 198.00 points or 0.52% after trading in a range of 38185.43 and 38354.52. There were 9 stocks advancing against 21 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index rose 0.09%, while Small cap index was up by 0.20%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.93%, IT up by 0.55% and TECK was up by 0.40%, while Oil & Gas down by 0.78%, Energy down by 0.78%, FMCG down by 0.69%, Utilities down by 0.63% and Power was down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.19%, Yes Bank up by 1.11%, Infosys up by 0.74%, Wipro up by 0.51% and Bajaj Auto up by 0.48%. On the flip side, Asian Paints down by 2.57%, Power Grid Corporation down by 2.35%, Kotak Mahindra Bank down by 2.12%, Indusind Bank down by 1.40% and Tata Motors - DVR down by 1.35% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its Developments in India’s Balance of Payments (BoP) during the Q1 (April-June) of 2018-19, has stated that the country’s current account deficit (CAD) as a percentage of Gross Domestic Product (GDP) eased marginally to 2.4% in Q1FY19 against 2.5% in the same quarter of previous year. However, in value terms, the CAD was higher at $15.8 billion in April-June this year as against $15 billion in the same quarter of 2017-18 mainly due to a higher trade deficit.

The central bank stated that trade deficit stood at $45.7 billion as compared with $41.9 billion a year ago. The Indian currency is declining against the US dollar due to global factors as well as concerns on higher trade deficit on account of sustained high crude oil prices. As per the data, net services receipts rose 2.1% year-on-year mainly on the back of a rise in net earnings from software and financial services. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.8 billion, rising by 16.9% from their level a year ago.

The data on BoP also revealed that net foreign direct investment at $9.7 billion in the first quarter of 2018-19 was higher than $7.1 billion in the year-ago period. However, portfolio investment recorded net outflow of $8.1 billion in the first quarter of 2018-19 as compared with an inflow of $12.5 billion in the year-ago period on account of net sales in both the debt and equity markets. Net receipts on account of non-resident deposits amounted to $3.5 billion in April-June, 2018-19, as compared with $1.2 billion a year ago.

The CNX Nifty is currently trading at 11523.70, down by 65.40 points or 0.56% after trading in a range of 11523.45 and 11573.00. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.10%, Lupin up by 2.03%, Yes Bank up by 1.36%, Cipla up by 0.94% and Infosys up by 0.81%. On the flip side, Ultratech Cement down by 2.66%, Asian Paints down by 2.31%, Power Grid Corporation down by 2.30%, BPCL down by 1.82% and Kotak Mahindra Bank down by 1.80% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted declined 109.67 points or 1.02% to 10,737.32, Straits Times decreased 15.49 points or 0.5% to 3,118.90, Jakarta Composite shed 28.21 points or 0.48% to 5,823.26, Hang Seng dropped 239.61 points or 0.9% to 26,733.86 and Shanghai Composite was down by 17.00 points or 0.63% to 2,685.30.

On the flip side, Nikkei 225 increased 47.60 points or 0.21% to 22,354.66 and KOSPI was up by 6.04 points or 0.26% to 2,287.62.