Benchmarks make gap-down start amid weak Asian cues

Pressurized by weak regional cues, Indian equity benchmarks made a gap-down start and are trading with a cut of around a percentage point in early deals on Monday. Sentiments were dampened with report that foreign exchange reserves fell below $400 billion, for the first time since November 11, 2017, in the first week of September. As on September 7, foreign exchange reserves stood at $399.28 billion, a result of the Reserve Bank of India’s intervention at a time when portfolio flows were witnessing some reversals. Some cautiousness also crept in with ICRA’s report that funding of farm loan waivers, poll-related spending and other populist measures are likely to ensure that states are set to miss their fiscal consolidation targets budgeted at the beginning of the year. Traders shrugged off report that India’s exports rose at the fastest pace in three months to reach $27.84 billion in August on account of healthy growth in petroleum products, engineering, pharma, and gems and jewellery shipments. Besides, trade deficit during the month narrowed to $17.4 billion as against $12.72 billion in the same month last year. In July, the trade deficit soared to a near five-year high of $18.02 billion.

On the global front, Asian markets are trading mostly in red at this point of time amid reports over the weekend that the US could be imposing new tariffs on $200 billion of Chinese goods as early as this week. The US markets ended tad higher on Friday, with worries about higher interest rates and the US-China trade fight weighing on sentiments.

Back home, stocks related to steel sector exhibited mixed trend with report that the decision to impose steep tariffs by the US on steel and aluminium may impact the domestic metal sector. Separately, steel minister Chaudhary Birender Singh said negotiations are under way with the US over the 25% tariff it had imposed on steel imports. In scrip specific developments, Glenmark Pharma gained on getting final approval from USFDA for Estradiol Vaginal and Prestige Estates Projects jumped on the buzz of planning to acquire malls in Pune, Mumbai.

The BSE Sensex is currently trading at 37731.03, down by 359.61 points or 0.94% after trading in a range of 37716.99 and 38027.81. There were 2 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.65%, while Small cap index was down by 0.22%.

The few gaining sectoral indices on the BSE were Realty up by 0.39%, IT up by 0.23% and TECK was up by 0.02%, while Bankex down by 1.20%, Consumer Durables down by 1.19%, Telecom down by 1.07%, Energy down by 1.03% and Oil & Gas was down by 0.97% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.21% and Maruti Suzuki up by 0.02%. On the flip side, HDFC down by 1.81%, SBI down by 1.69%, Axis Bank down by 1.65%, Yes Bank down by 1.52% and HDFC Bank down by 1.44% were the top losers.

Meanwhile, continuing growth momentum for the fifth straight month, India’s merchandise exports rose at the fastest pace in three months in the month of August 2018, mainly on the back of healthy growth in petroleum products, engineering, pharma, and gems and jewellery shipments. Besides, imports too grew due to costlier crude oil shipments. However, during the reporting month, trade deficit narrowed to $17.39 billion as against $12.72 billion in the same month last year. In July, the trade deficit soared to a near five-year high of $18.02 billion. Moreover, taking merchandise and services together, overall trade deficit for April-August 2018-19 is estimated at $47.72 billion as compared to $38.95 billion in April-August 2017-18.

As per the data released by the Commerce Ministry, exports grew by 19.21% to $27.84 billion in August 2018, as compared to $23.36 billion in the same month a year ago. In Rupee terms, exports were higher by 29.60% to Rs 1,93,624.74 crore in August 2018, as compared to Rs 1,49,398.90 crore in August 2017. Cumulative value of exports for the period April-August 2018-19 was $136.09 billion as against $117.19 billion during the period April-August 2017-18, registering a positive growth of 16.13% over the same period last year. In Rupee terms, it was up by 22.44% to Rs 9,23,447.82 crore from Rs 7,54,218.89 crore.

Non-petroleum and Non Gems and Jewellery exports in August 2018 were $20.70 billion, as compared to $17.78 billion in August 2017, exhibiting a positive growth of 16.45%. Non-petroleum and Non Gems and Jewellery exports in April-August 2018-19 were $99.24 billion, as compared to $87.60 billion for the corresponding period in 2017-18, an increase of 13.28%.

Imports during August 2018 increased by 25.41% to $45.24 billion as compared to imports of $36.07 billion in August 2017, while in rupee terms it was up by 36.34% to Rs 3,14,597.54 crore from Rs 2,30,737.96 crore in August 2017. Cumulative value of imports for the period April-August 2018-19 was $216.43 billion, as against $184.45 billion during the period April-August 2017-18, registering a positive growth of 17.34% over the same period last year. In rupee terms, it was Rs 14,69,479.24 crore, up by 23.78% from Rs 11,87,188.89 crore in the same period last year.

Oil imports in August 2018 were $11.83 billion, which was 51.62% higher, compared to $7.80 billion in August 2017. Oil imports in April-August 2018-19 were $58.81 billion which was 53.55% higher in compared to $38.30 billion over the same period last year. Non-oil imports in August 2018 were estimated at $33.41 billion which was 18.17% higher, compared to $28.27 billion in August 2017. Non-oil imports in April-August 2018-19 were $157.62 billion which was 7.84% higher, compared to $146.15 billion in April-August 2017-18. Non-Oil and Non-Gold imports were $29.77 billion in August 2018, up 12.84 over the same period of last year. Non-Oil and Non-Gold imports were $142.57 billion in April-August 2018-19, up 8.93% over the same period of last year.

The CNX Nifty is currently trading at 11408.65, down by 106.55 points or 0.93% after trading in a range of 11401.40 and 11464.95. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Wipro up by 1.45%, HCL Tech up by 0.91%, Tech Mahindra up by 0.85%, Eicher Motors up by 0.75% and Dr. Reddys Lab up by 0.28%. On the flip side, Indiabulls Housing down by 2.73%, Titan Co down by 2.35%, Bajaj Finance down by 1.92%, Asian Paints down by 1.87% and HDFC down by 1.84% were the top losers.

All the Asian markets are trading in red; Taiwan Weighted decreased 49.13 points or 0.45% to 10,819.01, Straits Times dropped 20.64 points or 0.66% to 3,140.78, Jakarta Composite declined 84.36 points or 1.44% to 5,846.92, Hang Seng tumbled 429.83 points or 1.6% to 26,856.58, KOSPI shed 17.62 points or 0.77% to 2,300.63 and Shanghai Composite was down by 28.49 points or 1.07% to 2,653.15.