Post Session: Quick Review

Indian equity benchmarks traded on a weak note throughout the day on Monday and heavy selling in the last hour of trade largely forced the markets to close at day’s low. The market indices snapped a two-session gaining run, with Sensex and Nifty settling below their crucial 38,000 and 11,450 levels, respectively. Markets traded in red since the beginning, following subdued global cues and sharp fall in the Indian rupee. The street remained disappointed 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. Anxiety also persisted with a report 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. Public debt accounted for 89.3% of total outstanding liabilities at end-June 2018 with internal debt accounting for 83.0% share. Nearly 24.9% of the outstanding dated securities had a residual maturity of less than five years.

Selling got intensified during final hours of trade and local barometer gauges traded at intraday low levels, as traders reacted negatively to President Donald Trump’s statement that he wants to stop the subsidies that growing economies like India and China have been receiving as he wants the US, which he considers as a ‘developing nation’, to grow faster than anybody. Traders shrugged off a private report stating that India's inflation likely eased below the Reserve Bank of India's medium-term target in August on softer food prices, raising the probability the central bank will keep interest rates on hold at its next rate review. Traders also paid no heed towards Economic affairs secretary Subhash Chandra Garg’s statement that the government will ensure fiscal deficit target is not breached.

On the global front, Asian markets ended mostly lower on Monday. European markets were trading in green in early deals, despite ongoing concerns over global trade. Back home, insurance sector was in limelight after Assocham-APAS study stated that the Indian insurance industry is expected to grow to $280 billion by 2019-20 aided by the government's flagship Ayushman Bharat and increasing awareness about need for protection. Besides, Oil & Gas stocks ended in red, despite Oil Minister Dharmendra Pradhan’s statement that India as a stable economy should avoid any knee-jerk reaction to volatile crude oil prices, indicating no cut in taxes on fuel despite petrol breaching the Rs 80 per litre level in the Capital.

The BSE Sensex ended at 37907.91, down by 481.91 points or 1.26% after trading in a range of 37888.17 and 38354.52. There were 3 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.78%, while Small cap index was down by 1.12%.(Provisional)

The top losing sectoral indices on the BSE were Metal down by 1.88%, Auto down by 1.81%, FMCG down by 1.74%, Energy down by 1.71% and Basic Materials down by 1.71%, while there were no gainers on the BSE sectoral space.(Provisional)

The few gainers on the Sensex were Axis Bank up by 0.98%, TCS up by 0.35% and Wipro up by 0.31%. (Provisional)

On the flip side, Sun Pharma down by 3.84%, Mahindra & Mahindra down by 3.70%, Vedanta down by 3.57%, SBI down by 2.60% and Indusind Bank down by 2.50% were the top losers. (Provisional)

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 ended at 11432.65, down by 156.45 points or 1.35% after trading in a range of 11430.45 and 11573.00. There were 7 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were HCL Tech up by 1.32%, Axis Bank up by 0.86%, Zee Entertainment up by 0.55%, GAIL India up by 0.42% and TCS up by 0.32%. (Provisional)

On the flip side, Bajaj Finance down by 5.09%, Indiabulls Housing Finance down by 4.64%, Sun Pharma down by 4.17%, Mahindra & Mahindra down by 3.87% and Bajaj Finserv down by 3.79% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 8.02 points or 0.11% to 7,285.72, France’s CAC was up by 10.50 points or 0.2% to 5,262.72 and Germany’s DAX added 14.65 points or 0.12% to 11,974.28.

Asian markets ended mostly in red on Monday amid trade worries after U.S. President Donald Trump threatened to slap tariffs on all of the Chinese goods imported into the United States. A report showed China’s trade surplus with the U.S. widened to a record in August, adding to the trade tensions. While a strong U.S. jobs report supported the dollar, oil prices rose after data showed U.S. energy companies cut two oil rigs last week. Bucking the trend, Japanese shares ended higher, as upbeat revised GDP data and a slightly weaker yen helped investors shrug off trade worries. Japan’s gross domestic product climbed an annual 3.0 percent in the second quarter of 2018. That beat forecasts for 2.6 percent and was up from the previous reading of 1.9 percent. On an annualized seasonally adjusted basis, GDP added 0.7 percent - unchanged and in line with expectations.