Indian benchmarks continue to trade negative territory

Indian benchmarks continued to trade in negative territory in early noon session, with Sensex and Nifty plunging around one fourth of a percent. Selling in frontline blue chip stocks such Mahindra & Mahindra, HDFC, Maruti Suzuki and Indusind Bank too weighed down sentiment, while buying in TCS, Infosys and Coal India minimizing losses up to certain level. The Indian rupee also weakened against the US dollar, tracking heavy selloffs in the local equity markets. Shares of non-banking finance companies (NBFCs) plummeted further over fears of a liquidity crunch. Anxiety remained on the street 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. Traders failed to get any sense of relief with Finance Minister Arun Jaitley’s statement that the Government will take all measures to ensure that adequate liquidity is maintained/provided to the NBFCs, the Mutual funds and the SMEs. Meanwhile Moody’s report stated that the five-pronged strategy announced by the government to increase capital inflow into the country is unlikely to reverse the rupee depreciation.

On the global front, Asian markets were trading mostly in red, as shares stumbled in holiday-thinned trading as China ramped up trade tensions by cancelling upcoming tariff talks with the United States. Back home, on sectoral front, stocks related to Oil & Gas space were trading in green with a private report that India the world's third-biggest oil importer, is considering reducing oil purchases to mitigate the pain of high crude prices and the declining rupee. In scrip specific development, GAIL India surged on commencing work of coal gasification based fertilizer plant. Besides, Generic Engineering advanced on bagging orders worth Rs 273.92 crore.

The BSE Sensex is currently trading at 36560.66, down by 280.94 points or 0.76% after trading in a range of 36531.04 and 36945.50. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.96%, while Small cap index was down by 2.01%.

The few gaining sectoral indices on the BSE were IT up by 2.46%, TECK up by 1.86%, Oil & Gas up by 0.44% and Energy was up by 0.35%, while Realty down by 4.13%, Auto down by 3.21%, Consumer Discretionary down by 2.59%, Consumer Durables down by 1.95% and Telecom was down by 1.89% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.46%, Infosys up by 2.96%, Coal India up by 2.45%, ONGC up by 2.42% and Vedanta was up by 1.41%. On the flip side, Mahindra & Mahindra down by 5.41%, HDFC down by 4.21%, Maruti Suzuki down by 4.15%, Indusind Bank down by 3.56% and Adani Ports &Special was down by 2.93% were the top losers.

Meanwhile, few days after the government announced five-pronged strategy to prevent the rupee rout, global credit rating agency, Moody's Investors Service in its latest report has said that the government’s measures to boost capital inflow in to the country is unlikely to reverse the rupee depreciation.

The rating agency raised concerns on the measures taken by the government, underlining that the strategy will likely take time to affect capital inflows and the potential removal of hedging requirements may heighten corporates' exposure to currency fluctuations even though it could reduce some short-term pressure on the rupee. Moody's further noted that steps to reduce non-essential goods import may provide support to contain the imports bill, but will likely have a lagged effect.

As per the report, rising oil prices will weight on India's fiscal position, increasing expenditures. However, Moody's said that the large foreign-currency reserves provide additional policy space and flexibility for the central bank to manage external shocks and reduce the risk of sustained and large portfolio outflows, as well as pressure on the currency.

The CNX Nifty is currently trading at 11050.00, down by 93.10 points or 0.84% after trading in a range of 11039.90 and 11170.15. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were TCS up by 3.32%, Infosys up by 3.08%, Tech Mahindra up by 3.06%, Coal India up by 2.63% and ONGC was up by 2.36%. On the flip side, Indiabulls Housing down by 7.32%, Mahindra & Mahindra down by 5.72%, Bajaj Finance down by 5.62%, HDFC down by 4.35% and Maruti Suzuki was down by 4.16% were the top losers.

Asian markets were trading mostly in red, Hang Seng fell 413.09 points or 1.5% to 27,540.49 and Jakarta Composite was down by 64.14 points or 1.09% to 5,893.60. On the flip side Straits Times was up by 10.72 points or 0.33% to 3,228.40.