Indices continue to trade in red zone; Sensex below 37,900 mark

Domestic indices continued to trade in negative zone with marginal losses in the early noon session as investors remained cautious owing to US-China trade war concerns. Selling in FMCG, Telecom and Consumer Durables stocks were pulling the markets lower. Sentiments remained pessimistic with Moody's Investors Service in its report stating that the ongoing free fall of the rupee against the US dollar is credit negative for Indian companies, especially for those that generate revenue in rupees but rely on dollar debt to fund their operations and have substantial dollar-based expenses. However, losses were capped as traders took some comfort with ADB’s report highlighting that India’s share in the GDP of Asia and Pacific region has increased to 17.3 per cent in 2017 from 14.6 per cent in 2000. Buying in PSU, Metal and Bankex stocks were keeping a lid on the losses. Meanwhile, broader indices were outperforming their larger peers.

On the global front, barring Japan and Taiwan all the other Asian markets were trading in red. With U.S. yields on the rise again, a weakening yen gave Japanese stocks a boost. Back home, in scrip specific developments, Suzlon rose on entering into partnership with CLP India and IOC gained on entering into MoU with Haryana government.

The BSE Sensex is currently trading at 37865.55, down by 56.62 points or 0.15% after trading in a range of 37838.30 and 38043.27. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.33%, while Small cap index up by 0.13%.

The top gaining sectoral indices on the BSE were PSU up by 0.50%, Metal up by 0.41%, Bankex up by 0.36%, Power up by 0.35% and IT up by 0.31%, while FMCG down by 1.68%, Telecom down by 1.07% and Consumer Durables down by 0.86% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.96%, SBI up by 1.86%, Infosys up by 1.31%, Vedanta up by 1.26% and Asian Paints up by 1.19%. On the flip side, ITC down by 2.73%, Hero MotoCorp down by 1.78%, Hindustan Unilever down by 1.40%, Bharti Airtel down by 1.18% and HDFC down by 1.01% were the top losers.

Meanwhile, the industry chamber, Associated Chambers of Commerce and Industry of India (ASSOCHAM) has said that the most important factor responsible for rising petrol and diesel prices, at this point of time, is the global macro situation, impacting the entire pack of Emerging Markets, with India being no exception. However, it expressed hopes that the tax burden would be brought down to some extent.

The industry chamber said “It has been our stand that petrol and diesel should be brought under the Goods and Services Tax (GST). However, it may not be feasible at this point of time”. It also said that the US dollar has been strengthening against most currencies of the world, so the weakening of rupee against the dollar has to be seen in that context.

ASSOCHAM further said that with India being a large importer of crude oil, the currency depreciation does have an impact on the landed prices. It also noted that the crude, in any case, has been rising amidst a firm global sentiment. Adding further, it said that the government and the Reserve Bank of India (RBI) are seized of the matter and are considering various options including the option of bringing down the tax burden to some extent.

The CNX Nifty is currently trading at 11421.45, down by 16.65 points or 0.15% after trading in a range of 11415.95 and 11479.40. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.03%, SBI up by 1.95%, Hindalco up by 1.76%, Bajaj Finserv up by 1.49% and HPCL up by 1.36%. On the flip side, ITC down by 2.84%, Titan Co down by 2.34%, Bharti Infratel down by 2.07%, UPL down by 1.85% and Tech Mahindra down by 1.83% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 9.40 points or 0.3% to 3,111.52, Hang Seng slid 71.45 points or 0.27% to 26,541.97, Shanghai Composite slipped 4.98 points or 0.19% to 2,664.50 and KOSPI was down 3.40 points or 0.15% to 2,285.26.

On the other hand, Taiwan Weighted increased 26.50 points or 0.25% to 10,752.30 and Nikkei 225 was up 291.60 points or 1.29% to 22,664.69.