Local equities continue sluggish trend

Local equity benchmarks continued their sluggish trend in the morning session, with Sensex and Nifty trading with losses of around a per cent, following weak Asian clues amid reports that the US was about to announce a new round of tariffs on Chinese imports. Besides, the domestic currency opened at 72.53 against the greenback. Traders remained concerned with a private report that the government’s rupee depreciation arresting measures may not drive fund inflows and are a negative from a longer term perspective as they increase short term debt. The market got hit with another private report stating that India's world-beating stock market run is over. It has downgraded domestic stocks to the equivalent of a hold rating from buy. This is the first time it has lowered Indian stocks since 2014. Traders took note of a report stating 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.

On the global front, Asian markets were trading in red, following an end-of-week rebound in the region, as trade tensions between the US and China appeared poised to reach new highs. Traders were taking note of a report that China said it may decline an offer for renewed trade talks with the US if President Donald Trump carries out his threat to impose an additional $200 billion in tariffs on Chinese goods. Back homes, Future Supply Chain Solutions gained on inking agreement with Voltbek. Besides, Glenmark Pharma gains on getting final approval from USFDA for Estradiol Vaginal.

The BSE Sensex is currently trading at 37707.07, down by 383.57 points or 1.01% after trading in a range of 37701.29 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 slipped 0.62%, while Small cap index was down by 0.13%.

The few gaining sectoral indices on the BSE were Realty up by 0.71%, Healthcare up by 0.21% and IT up by 0.05%, while Bankex down by 1.16%, Consumer Durables down by 1.11%, FMCG down by 0.92%, Energy down by 0.83% and Metal was down by 0.72% were the top losing indices on BSE.

The only gainers on the Sensex were Wipro up by 1.26% and Mahindra & Mahindra was up by 0.09%. On the flip side, HDFC down by 2.11%, NTPC down by 1.71%, Hindustan Unilever down by 1.67%, SBI down by 1.60% and Tata Motors - DVR was down by 1.56% were the top losers.

Meanwhile, allaying market concerns that a confluence of factors could derail the India’s economic growth, Finance Minister Arun Jaitley has said that the government is confident of meeting its fiscal deficit target of 3.3% of gross domestic product (GDP) in the fiscal year 2018-19. He added that the government is sure of meeting the fiscal deficit target given robust tax collections.

Jaitley said ‘We will have a growth rate higher than what we’d projected earlier this year in the budget’. He also said the fiscal year that ends in March 2019, will be completed without any spending cuts and inflation remained broadly under control.

Finance Minister’s comment comes a day after he outlined a slew of measures aimed at stemming a decline in the rupee-the worst-performing Asian currency this year. Despite strong GDP growth, the rupee has weakened about 11% this year amid higher oil prices and an emerging markets sell-off. This has widened India’s current account deficit and pushed its balance of payments into the red in April-June for the first time in six quarters.

The CNX Nifty is currently trading at 11406.10, down by 109.10 points or 0.95% after trading in a range of 11401.20 and 11464.95. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were HPCL up by 1.88%, BPCL up by 1.64%, Wipro up by 1.18%, Indian Oil Corporation up by 1.13% and Tech Mahindra was up by 0.74%. On the flip side, Bajaj Finance down by 2.50%, Titan Company down by 2.30%, Bajaj Finserv down by 1.99%, HDFC down by 1.85% and Indiabulls Housing was down by 1.74% were the top losers.

All Asian markets were trading in red, Taiwan Weighted declined 56.05 points or 0.52% to 10,812.09, Straits Times slipped 20.61 points or 0.66% to 3,140.81, Shanghai Composite lost 28.49 points or 1.07% to 2,653.15, KOSPI fell 21.07 points or 0.92% to 2,297.18, Jakarta Composite dropped 107.70 points or 1.85% to 5,823.58 and Hang Seng was down by 434.34 points or 1.62% to 26,852.07.