Local equities continue lackluster trade

Local equity benchmarks continued their lackluster trade in morning session, with losses of around half a percent, on heavy selling in Auto, Realty and Banking stocks amid weak global cues. Weakness in the rupee, also with rising global crude oil prices, which again went past the $79 per barrel mark, brought cautiousness on the street. The markets remained under pressure with a report that overseas investors have pulled out a massive Rs 15,365 crore from the capital markets till September 21, after putting in funds during the previous two months, on widening current account deficit coupled with global trade tensions. Traders remain concerned with CII report that over 40 per cent of Indian companies surveyed by industry chamber CII are expecting that the Reserve Bank will go in for a further hike in interest rates in the current fiscal. The market participants failed to take support with Economic Affairs Secretary Subhash Chandra Garg’s statement that the government will “very soon” implement the second set of measures including curb on imports of non-essential items to shore up rupee to 68-70 level against the US dollar. Beside, a private report stated that India has pulled out 271 million people out of poverty in last ten years. The report has praised India’s “momentous progress” in reducing multidimensional poverty.

On the global front, Asian markets were trading mostly in red, in cautious trade following the mixed cues from Wall Street Friday and as investors focused on US-China trade tensions. Back home, realty stock edged lower despite report that a fluctuating rupee, and introduction of various regulations to bring in transparency and accountability, are making real estate more lucrative for non-resident Indians (NRIs).

The BSE Sensex is currently trading at 36724.06, down by 117.54 points or 0.32% after trading in a range of 36558.61 and 36945.50. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 1.06%, while Small cap index was down by 1.28%.

The top gaining sectoral indices on the BSE were Metal up by 1.37%, IT up by 1.00%, Oil & Gas up by 0.99%, Energy up by 0.89% and TECK was up by 0.62%, while Realty down by 3.36%, Telecom down by 1.79%, Auto down by 1.67%, Consumer Disc down by 1.51% and Consumer Durables was down by 1.08% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.24%, ONGC up by 2.55%, Coal India up by 2.25%, Infosys up by 1.94% and NTPC was up by 1.58%. On the flip side, HDFC down by 2.86%, Indusind Bank down by 2.84%, Kotak Mahindra Bank down by 2.45%, Bharti Airtel down by 2.34% and Mahindra & Mahindra was down by 2.32% were the top losers.

Meanwhile, terming depreciation in the rupee of around 12 percent as a temporary phenomenon, Economic Affairs Secretary Subhash Chandra Garg has said that the government will very soon implement the second set of measures including curb on imports of several non-essential items to bring rupee to 68-70 level against the US dollar. He also said that the Centre has prepared a list of non-essential items whose imports can be curbed and also drawn up a separate list of goods whose exports can be boosted with a little policy intervention.

On the rupee continuing to fall despite the first set of measures, Garg said “full components of the steps have not been implemented as yet, especially curb on import of non-essential items and boosting some of the exports etc. Those are still to come. These measures are at the final stage. Very soon, these should be announced.” He also said that a group headed by the Commerce Secretary has more or less completed its task on finalising the list and once it gets the nod from higher-ups, it will be announced and will happen very early.

DEA secretary further said that the government is worried about the rupee’s slump and its adverse impact on the Current Account Deficit (CAD). He indicated that the CAD as a percentage of GDP declined marginally to 2.4 percent in the April-June quarter of 2018-19 against 2.5 percent in the year-ago period. Adding further, he said that the fall in rupee has shot up the crude oil import bill for the world’s fastest-growing oil user by 76 percent to $10.2 billion in July. He added that the right level for the rupee is 68-70 per dollar, with 72 being the reasonable outer limit for depreciation.

The CNX Nifty is currently trading at 11090.70, down by 52.40 points or 0.47% after trading in a range of 11040.65 and 11170.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.86%, Tech Mahindra up by 2.64%, Coal India up by 2.51%, ONGC up by 2.19% and Infosys was up by 1.97%. On the flip side, Indiabulls Housing down by 5.23%, Bajaj Finance down by 4.57%, HDFC down by 3.23%, Eicher Motors down by 2.99% and Indusind Bank was down by 2.95% were the top losers.

Asian markets were trading mostly in red, Jakarta Composite slipped 64.14 points or 1.09% to 5,893.60 and Hang Seng was down by 346.28 points or 1.25% to 27,607.30. On the flip side, Straits Times was up by 12.64 points or 0.39% to 3,230.32