Weak trade persists; FMCG, IT stocks fall

Weak trade persisted on the street in late afternoon session, on account of sluggish opening in European markets coupled with continued sell-off at FMCG and IT counters. Besides, the major industry laggards like Tata Motors, ITC and Wipro kept the markets’ mood down. The street got cautious with a private report stating that even though India’s economy is growing at a fast pace, the ‘higher educated’ are reporting the highest rate of unemployment against the national average. The report also revealed that the unemployment scenario is most ‘severe’ in the northern states of the country. Some concerns also came with another private report stating that after US, India is likely to suffer highest economic damage from climate change. The report further noted that Carbon dioxide emissions are costing the Indian economy up to $210 billion every year.

On the sectoral front, stocks related to sugar sector were trading lower, despite the government approved a Rs 4,500 crore package for the sugar industry that includes over two-fold jump in production assistance to cane growers and transport subsidy to mills for export up to 5 million tonnes in the marketing year 2018-19, while telecom stocks traded higher, after the cabinet approved the new telecom policy, now named National Digital Communications Policy (NDCP) 2018, which aims to attract $100 billion investment and create 4 million jobs in the sector by 2022. In scrip specific development, Liberty Shoes gained after the company forayed into lifestyle retail and unveiled its new business venture, Liberty Lifestyle.

On the global front, European markets were trading in red, as Germany's wholesale price inflation accelerated in August largely driven by fuel cost. The Federal Statistical Office reported that wholesale price inflation rose to 3.8% in August from 3.6% in July. This was the fastest increase in wholesale prices since April 2017. Separately, French manufacturing sentiment deteriorated in September. As per survey results from the statistical office Insee, the manufacturing sentiment index fell to 107 in September from 110 in August. This was the lowest score since March 2017 and well below forecast of 109. However, Asian markets were trading in green, as trade war fears faded and investors waited for cues from the Fed meeting. The US Federal Reserve is widely expected to hike interest rates by 25 basis points when it concludes a two-day policy meeting later in the day.

The BSE Sensex is currently trading at 36509.92, down by 142.14 points or 0.39% after trading in a range of 36357.93 and 36938.74. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Metal up by 2.04%, Realty up by 1.96%, Basic Materials up by 1.36%, Capital Goods up by 1.03% and Healthcare up by 0.59%, while FMCG down by 1.61%, IT down by 1.59%, TECK down by 1.35%, Auto down by 0.93% and Power down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 5.46%, Yes Bank up by 2.46%, Tata Steel up by 1.91%, Reliance Industries up by 0.89% and Larsen & Toubro up by 0.88%. On the flip side, Tata Motors - DVR down by 3.49%, Tata Motors down by 3.34%, ITC down by 2.92%, Wipro down by 2.28% and SBI down by 1.74% were the top losers.

Meanwhile, maintaining India’s growth forecast at 7.3% for 2018, an international development finance institution, Asian Development Bank (ADB) has said that the economy continues on a robust growth path and is likely to grow at 7.6% during 2019, as goods and services tax and demonetisation effects abate as expected.

ADB further noted that robust domestic demand and rising exports, particularly of manufactures, are helping to offset impact of rising oil prices. However, it pointed rupee fall and volatile external financial markets pose challenges for the country, as does accelerating inflation though tighter fiscal policy will help quell inflationary pressures.

In an update of its flagship annual economic publication, Asian Development Outlook (ADO) 2018, ADB forecasted that growth across most of developing Asia remains stable, due to robust domestic demand, buoyant oil and gas prices, and a consolidation of India’s growth rebound. However, it also noted that the region’s resilience will be tested by escalating trade tensions.

The CNX Nifty is currently trading at 11043.55, down by 23.90 points or 0.22% after trading in a range of 10993.05 and 11145.55. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 7.37%, Vedanta up by 5.19%, UPL up by 4.66%, GAIL India up by 3.08% and Yes Bank up by 2.46%. On the flip side, Tata Motors down by 3.34%, Bharti Infratel down by 3.08%, ITC down by 2.91%, HCL Tech. down by 2.44% and Wipro down by 2.39% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 25.68 points or 0.91% to 2,806.82, Nikkei 225 jumped 93.53 points or 0.39% to 24,033.79, Straits Times rose 5.01 points or 0.15% to 3,241.09, Hang Seng zoomed 317.48 points or 1.14% to 27,816.87 and Jakarta Composite increased 19.03 points or 0.32% to 5,893.33. On the flip side, Taiwan Weighted was down by 4.66 points or 0.04% to 10,974.19.

European markets were trading mostly in red; UK’s FTSE 100 decreased 6.34 points or 0.08% to 7,501.22 and Germany’s DAX was down by 19.65 points or 0.16% to 12,355.01. On the flip side, France’s CAC was up by 5.77 points or 0.11% to 5,484.87.