Markets add losses; Sensex plunges around 140 points

Indian equity benchmarks added losses in late afternoon session, with Sensex and Nifty losing more than 100 and 50 points, respectively, despite higher opening in European markets. Domestic sentiments got hit with credit rating agency, India Ratings and Research’s latest report that banks' credit costs are likely to remain elevated at 2%-3% during FY19-FY20, on the back of ageing of non-performing assets (NPAs), accelerated provisioning and slippages especially from non-corporate accounts. Losses led by Realty and PSU stocks coupled with falling major industry leaders like SBI and Tata Motors, dragged the markets down in late noon deals. In line with the larger peers, the broader markets too plunged sharply. Traders overlooked Finance minister Arun Jaitley’s statement that the reforms undertaken by the government in the banking sector have started to yield results and recoveries increased on bad loans that had ballooned because of disproportionate lending during the Congress-led UPA rule. On the sectoral front, sugar companies stocks remained in focus, amid reports that the government may hike the minimum selling price (MSP) for over-supplied sugar mills, a week after an incentive package was announced under which it raised the price of ethanol.

On the global front, European markets were trading mostly in green, as Eurozone inflation slowed as estimated in August. As per final data from Eurostat, harmonized inflation came in at 2% in August versus 2.1% in July. Asian markets were trading mixed, after US President Donald Trump announced new tariffs on an additional $200 billion worth of Chinese imports, in a sharp escalation of the trade conflict between the world’s two biggest economies. The tariffs will be set at 10% until the year-end, but would increase to 25% from January 1. Trump also warned that he would pursue tariffs on approximately $267 billion of additional imports if China takes retaliatory action. Back home, in scrip specific development, TVS Motor traded higher after the company’s 125cc scooter offering TVS NTORQ 125 crossed the 1 lakh sales mark.

The BSE Sensex is currently trading at 37446.05, down by 139.46 points or 0.37% after trading in a range of 37442.06 and 37745.44. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.94%, while Small cap index was down by 0.87%.

The few gaining sectoral indices on the BSE were FMCG up by 1.23%, Consumer Durables up by 0.12% and Energy up by 0.04%, while Realty down by 2.60%, PSU down by 2.02%, Telecom down by 1.42%, Power down by 1.42% and Industrials down by 1.16% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.74%, Yes Bank up by 2.57%, ONGC up by 1.34%, Asian Paints up by 0.99% and Mahindra & Mahindra up by 0.92%. On the flip side, SBI down by 3.75%, Tata Motors down by 2.34%, Bajaj Auto down by 2.04%, Tata Motors - DVR down by 1.91% and Bharti Airtel down by 1.66% were the top losers.

Meanwhile, with an aim to protect the domestic players and to discourage cheap imports, the government has started anti-subsidy probe on imports of cast copper wire rods from four countries-- Indonesia, Malaysia, Thailand and Vietnam.

The Directorate General of Trade Remedies (DGTR) which ensures a level playing field to the Domestic Industry against the adverse impact of the unfair trade practices, has initiated an investigation into the alleged subsidisation of this product. In the investigation, DGTR will determine the existence, degree and effect of alleged subsidisation and to recommend the amount of countervailing or anti-subsidy duty, which if levied, would be adequate to remove the injury to the domestic industry.

Hindalco Industries and Vedanta Industries had filed an application before the DGTR for initiation of an anti-subsidy investigation on imports of cast copper wire rods from Indonesia, Malaysia, Thailand and Vietnam. The period of investigation (POI) is 2017-18 (12 months). However, the data of 2014-17 will also be considered.
The CNX Nifty is currently trading at 11321.40, down by 56.35 points or 0.50% after trading in a range of 11321.40 and 11411.45. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.52%, Yes Bank up by 2.42%, ONGC up by 1.54%, Titan up by 1.21% and GAIL India up by 1.11%. On the flip side, SBI down by 4.03%, Hindalco down by 2.61%, Tata Motors down by 2.48%, HPCL down by 2.28% and Bajaj Auto down by 2.19% were the top losers.

Asian markets were trading mixed; Hang Seng zoomed 151.81 points or 0.56% to 27,084.66, KOSPI rose 5.97 points or 0.26% to 2,308.98, Shanghai Composite gained 48.16 points or 1.78% to 2,699.95 and Nikkei 225 jumped 325.87 points or 1.39% to 23,420.54. On the flip side, Jakarta Composite decreased 12.20 points or 0.21% to 5,812.06, Taiwan Weighted lost 68.40 points or 0.64% to 10,760.21 and Straits Times was down by 9.31 points or 0.3% to 3,132.09.

European markets were trading mostly in green; France’s CAC increased 29.54 points or 0.55% to 5,378.41 and Germany’s DAX was up by 67.22 points or 0.55% to 12,163.63. On the flip side, UK’s FTSE 100 decreased 8.31 points or 0.11% to 7,293.79.