Sensex, Nifty slip into red

Indian equity benchmarks slipped into red terrain in late afternoon session, with Sensex and Nifty losing around 190 and 50 points, respectively, despite firm opening in European markets. The street got cautious with a private report stating that the country’s rainfall deficit in the ongoing monsoon season widened to 10%, hovering on borderline drought conditions, following below-normal showers every month - a pattern of consistent shortfall not seen since 2004. Domestic sentiments also turned negative with another report that there has been a steep decline in economic confidence in India over the past year. In 2017, 83% of individuals surveyed thought the economy was doing good. But in 2018, it was down to 56%. This decline is in contrast to the trend in most countries where public confidence was similarly pronounced in 2017 and 2018. On the sectoral front, metal stocks remained in focus, amid reports that India’s steel ministry has proposed increasing the effective import duty on some steel products to 15% from current rates ranging from 5% to 12.5%.

On the global front, European markets were trading in green, despite Italy's industrial orders dropped for a second straight month in July and at the fastest pace in six months. As per data from the statistical office ISTAT, industrial orders dropped a seasonally adjusted 2.3% from the previous month, when they fell 1.5%. In May, orders grew 3.3%. The latest decline was the biggest since January’s 4.7% fall. In economic releases, consumer and producer prices from the UK and current account from euro area are due later in the day. Asian markets were trading in green, as the US-China trade conflict failed to dent investor confidence in the global economy. Back home, in scrip specific development, TI Financial Holdings gained after the company received an approval for the further investment in shares of Cholamandalam Investment and Finance Company up to 300,000 equity shares Rs 10 each, up to a sum not exceeding Rs 50 crore.

The BSE Sensex is currently trading at 37108.60, down by 182.07 points or 0.49% after trading in a range of 37093.95 and 37530.63. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.05%, while Small cap index was down by 1.27%.

The few gaining sectoral indices on the BSE were Oil & Gas up by 0.92%, Metal up by 0.89% and PSU up by 0.58%, while Consumer Durables down by 1.74%, Realty down by 1.28%, Healthcare down by 1.24%, FMCG down by 1.18% and Consumer Disc down by 1.08% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.16%, Coal India up by 1.97%, Hero MotoCorp up by 1.46%, Tata Steel up by 1.36% and Kotak Mahindra Bank up by 0.68%. On the flip side, Indusind Bank down by 2.50%, Maruti Suzuki down by 2.22%, Yes Bank down by 1.42%, Adani Ports & SEZ down by 1.34% and Reliance Industries down by 1.20% were the top losers.

Meanwhile, the fair trade regulator, the Competition Commission of India (CCI) has imposed a total penalty of Rs 38.05 crore on 18 sugar mills and their two Trade Associations for rigging the bids of a joint tender floated by oil marketing companies (OMCs) for procurement of ethanol for blending with petrol. The two Trade Associations are Indian Sugar Mills Association (ISMA) and Ethanol Manufacturers Association of India (EMAI).

The regulator also issued a Cease and Desist Order against them. While imposing penalties, the Commission applied the principle of relevant turnover and based the penalties on the revenue generated by the sugar millsfrom sale of ethanol only. The penalty was imposed at 7% of the average relevant turnover of the sugar mills, while penalty at 10% of the average receipts was imposed upon the Trade Associations viz. ISMA and EMAI keeping in view the key role they played in facilitating bid rigging. 

The action was taken following a batch of informations filed by India Glycols and 5 other Informants. India Glycol alleged ISMA and EMAI for persuading the OMCs to come-out with a Joint Tender for the purpose of procuring ethanol. The said joint tendering by OMCs was alleged to be an agreement amongst horizontal players to procure ethanol from various suppliers in contravention of the competition act, causing adverse effect on competition within India in supply and distribution of ethanol.

It was also alleged that the sugar manufacturers, who had participated in the Tender of 2013, manipulated the bids by quoting similar rates and in some cases identical rates through an understanding and collective action, in violation of the competition laws.

The CNX Nifty is currently trading at 11229.70, down by 49.20 points or 0.44% after trading in a range of 11218.25 and 11332.05. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.90%, GAIL India up by 2.49%, Coal India up by 2.20%, ONGC up by 1.96% and Hero MotoCorp up by 1.62%. On the flip side, Zee Entertainment down by 2.80%, Bajaj Finserv down by 2.76%, UPL down by 2.50%, Indusind Bank down by 2.48% and Lupin down by 2.27% were the top losers.

Asian markets were trading mostly in green; Hang Seng zoomed 322.71 points or 1.18% to 27,407.37, Shanghai Composite rose 30.90 points or 1.13% to 2,730.85, Nikkei 225 jumped 251.98 points or 1.06% to 23,672.52,, Jakarta Composite increased 46.75 points or 0.8% to 5,858.54, Taiwan Weighted added 97.06 points or 0.89% to 10,857.27 and Straits Times was up by 34.20 points or 1.08% to 3,173.54. On the flip side, KOSPI was down by 0.52 points or 0.02% to 2,308.46.

All European markets were trading in green; UK’s FTSE 100 increased 18.36 points or 0.25% to 7,318.59, France’s CAC gained 15.94 points or 0.3% to 5,379.73 and Germany’s DAX was up 28.54 points or 0.23% to 12,186.21.