Barometer gauges continue to trade deep in red

Indian benchmarks continued to trade deep in red in early noon session, with Sensex and Nifty plunging around 300 and 80 points respectively, owing to weakening of rupee to a fresh record low. Subdued cues from other Asian markets also dampened the trading sentiments. Except IT and TECK, all the other BSE sectoral indices were trading in negative terrain. Oil & Gas sector was trading lower due to surge in global crude oil rates as US drilling for new production stalled and as the market eyed tighter conditions once Washington's sanctions against Iran's crude exports kick in from November. Besides, on the BSE, Power Grid, Kotak Bank and IndusInd Bank were amongst the major losers, while on the NSE, Ultratech Cement, Bajaj Finserv and Indusind Bank were amongst the top losers. Investors remain concerned with Reserve Bank of India’s (RBI) data showing that the CAD in value terms 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. Adding to the woes, latest data on public debt showed that total liabilities of the government increased to Rs 79.8 lakh crore at end-June 2018 from Rs 77.98 lakh crore at end-March 2018.

On the global front, most of the Asian counters were trading under pressure on growing fears of an all-out trade war between the world's top two economies. Back home, some concerns also spread in with a report showing that foreign investors have pulled out a massive Rs 5,600 crore from the Indian capital markets in the last five trading sessions, after putting in money during the previous two months, on unabated fall in rupee and rise in crude oil prices. The overall market breadth on BSE was in the favour of declines; there were 1046 shares on the gaining side against 1319 shares on the losing side while 137 shares remained unchanged.

The BSE Sensex is currently trading at 38095.68, down by 294.14 points or 0.77% after trading in a range of 38084.20 and 38354.52. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.80%, while Small cap index down by 0.31%.

The only gaining sectoral indices on the BSE were IT up by 0.57% and TECK up by 0.32%, while FMCG down by 1.33%, Consumer Durables down by 1.21%, Telecom down by 1.16%, Oil & Gas down by 1.08% and Basic Materials down by 1.02% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.21%, Infosys up by 1.15%, Wipro up by 0.86%, Tata Motors up by 0.72% and Adani Ports up by 0.41%. On the flip side, Power Grid down by 2.25%, Kotak Mahindra Bank down by 2.04%, Indusind Bank down by 2.02%, HDFC down by 1.90% and Vedanta down by 1.75% were the top losers.

Meanwhile, Federation of Indian Export Organisations (FIEO) has said that the commerce ministry must direct the Export Credit Guarantee Corporation (ECGC) to provide liberal insurance coverage to shipments in order to promote exports. FIEO President Ganesh Gupta has said that the claims made by exporters should be settled on time and not rejected outrightly.

Gupta has said that they have asked the commerce ministry to direct ECGC on this issue. He also said that exporters are facing huge problem at this front, therefore proper insurance cover is important to boost the country's exports. He noted that ECGC should work with exporters to address all the issues. Adding further, he said that liberal insurance cover for markets such as Africa and Latin America would help promote shipments in these regions.

In June, the Cabinet Committee on Economic Affairs approved capital infusion of Rs 2,000 crore in the ECGC to enhance insurance coverage to micro, small medium enterprises (MSME) exports and strengthen India’s exports to emerging and challenging markets like Africa, CIS (Commonwealth of Independent States) and Latin American countries. ECGC offers credit insurance schemes to exporters to protect them against losses due to non-payment of export dues by overseas buyers due to political and/or commercial risks. India’s exports during 2017-18 grew by 9.78 percent to $302.84 billion from $275.85 billion reported for 2016-17.

The CNX Nifty is currently trading at 11510.05, down by 79.05 points or 0.68% after trading in a range of 11489.30 and 11573.00. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.16%, Lupin up by 1.78%, HCL Tech. up by 1.73%, Infosys up by 1.34% and Tata Motors up by 1.05%. On the flip side, Ultratech Cement down by 2.76%, Bajaj Finserv down by 2.47%, Indusind Bank down by 2.24%, BPCL down by 2.14% and Power Grid down by 2.02% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 18.18 points or 0.58% to 3,116.21, Taiwan Weighted declined 121.19 points or 1.13% to 10,725.80, Hang Seng plunged 322.60 points or 1.21% to 26,650.87, Shanghai Composite decreased 22.57 points or 0.84% to 2,679.73 and Jakarta Composite was down 32.16 points or 0.55% to 5,819.31.

On the flip side, KOSPI increased 3.50 points or 0.15% to 2,285.08 and Nikkei 225 was up 66.03 points or 0.3% to 22,373.09.