Weak trade persists; FMCG, Banking stock top losers

Weak trade continued on the street in late afternoon session, despite higher opening in European markets. The trade remained impacted by heavy selling at FMCG, Banking and Energy counters coupled with weak cues from Asian markets. Traders were pessimistic with a private report that the government's rupee depreciation arresting measures announced Friday may not drive fund inflows and are a negative from a longer term perspective as they increase short term debt. The street took a note of another private report stating that ahead of the festive season, the surge in petrol rates has left consumers scrambling and cutting household expenses to adjust with the price hike. Traders failed to take any sense of relief with Finance Minister Arun Jaitley’s statement 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. Investors also overlooked report that 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. 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.

On the global front, European markets were trading mostly in green, ahead of final inflation data from euro area which is due later in the session. Inflation is expected to ease to 2% in August, in line with flash estimate, from 2.1% in July. Asian markets were trading in red, amid the US-China trade standoff that could imperil global economic growth. Back home, in scrip specific development, Tata Elxsi gained after the company and Ayla Networks entered into strategic partnership to help communications service providers (CSPs) use IoT technologies to achieve their business transformation goals.

The BSE Sensex is currently trading at 37692.79, down by 397.85 points or 1.04% after trading in a range of 37597.05 and 38027.81. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.43%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Realty up by 1.47%, Telecom up by 0.46%, Power up by 0.46%, Utilities up by 0.34% and Metal up by 0.27%, while FMCG down by 1.16%, Bankex down by 0.89%, Energy down by 0.72%, Auto down by 0.71% and Healthcare down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 1.35%, Bharti Airtel up by 1.07%, Tata Steel up by 1.04%, Adani Ports & SEZ up by 0.78% and Wipro up by 0.77%. On the flip side, HDFC down by 2.35%, Sun Pharma down by 1.69%, HDFC Bank down by 1.65%, Asian Paints down by 1.65% and ITC down by 1.61% were the top losers.

Meanwhile, in a move to provide relief, the government is aiming to double the NPA recovery to Rs 1.5 lakh crore in the current financial year 2018-19 as against Rs 74,000 crore in 2017-18. To achieve this, the government has asked the banks to match last full fiscal year recovery number by the end of second half.

The government has been trying its best to recover bad loans and has been insisting on a focused recovery drive, including a special team to deal with the issue. At the same time, the Insolvency and Bankruptcy Code is seen to be a key source to help the lenders recover some of the dues. Besides, the government has made recovery of bad loans a primary criterion for issuing growth capital to banks.

Meanwhile, public sector banks recovered around Rs 36,500 crore up to the June quarter and recovery is expected to reach Rs 75,000-80,000 crore by September-end.

The CNX Nifty is currently trading at 11406.50, down by 108.70 points or 0.94% after trading in a range of 11373.90 and 11464.95. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.91%, HPCL up by 2.20%, Power Grid Corporation up by 1.60%, Indian Oil Corporation up by 1.29% and Tech Mahindra up by 1.26%. On the flip side, HDFC down by 2.46%, Bharti Infratel down by 2.22%, Bajaj Finance down by 1.99%, Bajaj Finserv down by 1.97% and Asian Paints down by 1.92% were the top losers.

Asian markets were trading mostly in red; Hang Seng plunged 353.56 points or 1.31% to 26,932.85, Jakarta Composite lost 111.54 points or 1.92% to 5,819.74, KOSPI fell 15.24 points or 0.66% to 2,303.01, Taiwan Weighted declined 39.53 points or 0.37% to 10,828.61, Straits Times decreased 23.19 points or 0.74% to 3,138.23 and Shanghai Composite was down by 29.85 points or 1.13% to 2,651.79.

European markets were trading mostly in green; UK’s FTSE 100 increased 6.87 points or 0.09% to 7,310.91 and France’s CAC gained 2.43 points or 0.05% to 5,355.00. On the flip side, Germany’s DAX was down by 13.75 points or 0.11% to 12,110.58.