Domestic gauges continue to trade with a percent cut

Local equities pared some of their losses, but still continued weak trend in afternoon session. Sensex plunged around 380 points and Nifty trading below 11,450 level. Investors remained cautious from private report which stated 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. Market participants shrugged off report that the government announced measures it intends to take to halt the rupee slide and address the underlying issue-the widening current account deficit. Besides, the government announced several steps to prop up capital inflows and to curb ‘non-essential’ imports, while sticking to its fiscal deficit targets. Meanwhile, FIIs purchased shares worth Rs 1,090.56 crore on Friday on net basis, while DIIs bought equities worth Rs 115.14 crore.

On the global front, Asian markets were trading in red, amid reports US could announce as early as today a new round of tariffs on Chinese imports, setting the stage for possible reprisals by Beijing. Back home, in scrip specific development Tata Steel advanced on launching project to extend operational life of blast furnaces in UK. Besides, Ashapura Intimates Fashion surged with arm opening new store in Pune.

The BSE Sensex is currently trading at 37706.43, down by 384.21 points or 1.01% after trading in a range of 37597.05 and 38027.81. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.25%, while Small cap index was up by 0.08%.

The top gaining sectoral indices on the BSE were Realty up by 1.23%, Telecom up by 0.57%, Metal up by 0.36%, Basic Materials up by 0.25% and Healthcare was up by 0.13%, while Energy down by 1.09%, Bankex down by 1.02%, Consumer Durables down by 0.91%, FMCG down by 0.81% and Auto was down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.37%, Wipro up by 0.41%, Adani Ports &Special up by 0.12%, TCS up by 0.06% and Mahindra & Mahindra was up by 0.05%. On the flip side, HDFC down by 2.16%, Reliance Industries down by 1.90%, NTPC down by 1.71%, SBI down by 1.69% and Axis Bank was down by 1.49% were the top losers.

Meanwhile, expressing concerns, credit rating agency, ICRA in its latest report has said that states are likely to miss fiscal consolidation targets in the current financial year (FY19), on the back of various majors like funding of crop loan waivers, election-related spending and the flood relief. The states’ fiscal deficit is primarily financed by issuing state development loans (SDLs).

As per the report, gross issuance of SDLs contracted by 3.4% to Rs 1.32 trillion in April-August of FY19, on sharp decline in issuance by Uttar Pradesh, Maharashtra and Gujarat. However, excluding these three states, the remaining states have seen rise of 14.7% in total SDL issuance during the reported period. The rating agency further predicted that Rs 1.3 trillion of SDLs are scheduled to be redeemed in FY19, much higher than Rs 0.8 trillion redeemed in FY18.

ICRA said that a rise in revenue expenditure beyond the budgeted levels may lead to fiscal slippages for some states, unless their capital spending is curtailed below, or their revenue receipts are enhanced above the budgeted level for FY19. The agency also pointed that a reduction in the capital spending will lead to an unfavourable outcome and this may also impair the quality of expenditure. However, it said that higher-than-budgeted revenue, which is likely following the recent amendments related to IGST and GST compensation cess, and a back-ended pickup in headline SGST collections, will be an encouraging development.

The CNX Nifty is currently trading at 11411.75, down by 103.45 points or 0.90% after trading in a range of 11373.90 and 11464.95. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.95%, HPCL up by 2.28%, Indian Oil Corporation up by 1.38%, Tata Steel up by 1.17% and Tech Mahindra was up by 1.12%. On the flip side, HDFC down by 2.11%, Bajaj Finance down by 2.08%, Reliance Industries down by 2.08%, SBI down by 1.75% and Titan was down by 1.74% were the top losers.

All the Asian markets were trading in red, Straits Times fell 23.94 points or 0.76% to 3,137.48, Taiwan Weighted slipped 39.53 points or 0.37% to 10,828.61, Hang Seng declined 364.43 points or 1.35% to 26,921.98, KOSPI trembled 15.24 points or 0.66% to 2,303.01, Shanghai Composite lost 25.74 points or 0.97% to 2,655.90 and Jakarta Composite was down by 103.98 points or 1.78% to 5,827.30.