Local equities slip into negative terrain

Local equity benchmarks erased all of their early gains and slipped into negative terrain in the morning session, amid mixed clues from Asian markets. A level of pressure was seen on frontline banking stocks, especially in Axis Bank and Yes Bank. Traders remained concerned with a private report that while India has a huge population of about 121 crore as per government’s census, just 831 richest Indians hold a quarter of India’s GDP. Market participants took note of a report that hike in custom duty to 10% on compressors, used for air conditioners and refrigerators, can be a ‘set back’ and may have an impact on the coming festive season sales. However, losses remained capped as traders are getting some solace with report that India has proposed Bangladesh to consider negotiating a comprehensive free trade agreement with a view to promote two-way commerce and investments. Besides, Finance Minister Arun Jaitley stated that India has large avenues of growth to sustain a GDP increase of 7-8% for two decades, unlike any other major economy.

On the global front, Asian markets were trading mixed, as investors assessed commentary from the Federal Reserve that reaffirmed the US economy is strong enough to warrant another interest-rate increase by the end of this year. Back home, on the sectoral front, Aviation stock declined after the government introduced an import duty of 5% on jet fuel or aviation turbine fuel (ATF). In scrip specific development, Gennex Laboratories zooms with its associate company getting approval from TSPCB.

The BSE Sensex is currently trading at 36538.17, down by 4.10 points or 0.01% after trading in a range of 36502.18 and 36711.62. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.81%, while Small cap index was down by 0.42%.

The top gaining sectoral indices on the BSE were IT up by 0.66%, TECK up by 0.62%, Basic Materials up by 0.36%, Consumer Durables up by 0.31% and Metal was up by 0.22%, while Realty down by 1.90%, Healthcare down by 0.81%, Capital Goods down by 0.64%, Bankex down by 0.34% and Industrials was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.60%, Bajaj Auto up by 1.48%, Infosys up by 1.11%, Tata Steel up by 0.94% and TCS was up by 0.80%. On the flip side, Yes Bank down by 2.48%, HDFC down by 1.37%, Axis Bank down by 1.02%, Maruti Suzuki down by 0.85% and Sun Pharma was down by 0.74% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that India has large avenues of growth to sustain a gross domestic product (GDP) rise of 7-8 percent for two decades, unlike any other country in the world. He also said that obstructionist ideas and technology naysayers need to be smashed and quick decision making would help India stay on higher growth trajectory. He said that “Developed economies have very fewer avenues of growth. We still have very large avenues of growth. …. India’s largest impact on the world over the next 2 decades will be on the strength of consumption”.

The minister has indicated that the Indian economy grew at a rate of 8.2 percent in the April-June quarter of current fiscal on good show by manufacturing and farm sectors. It grew at 6.7 percent in 2017-18. He said that “When you have a consumer base of this kind, your middle class will become larger than the population of any other country other than China. And therefore every investor is compelled to come to you, and are expected to put in money into the country.”

Jaitley further said that the path ahead for India is to shun obstructionists who had become so used to of India living in poverty. He said that “Why must you have EVM, let’s go back to paper, why must you have digitisation let’s go back to cash currency, why must you have Aadhaar, let’s have manual way of checkng. So the obsolete thinking in these areas need to not only defeated but smashed.”

The CNX Nifty is currently trading at 11038.10, down by 15.70 points or 0.14% after trading in a range of 11037.55 and 11089.45. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Titan Co up by 2.71%, Ultratech Cement up by 1.78%, Bajaj Auto up by 1.51%, Asian Paints up by 1.40% and Infosys was up by 1.17%. On the flip side, Indiabulls Housing Finance down by 6.07%, Yes Bank down by 2.64%, Bajaj Finance down by 1.79%, Dr. Reddy’s Lab down by 1.61% and HDFC was down by 1.49% were the top losers.

Asian markets were trading mixed, Jakarta Composite gained 39.88 points or 0.67% to 5,913.15, Straits Times surged 15.82 points or 0.49% to 3,254.92, KOSPI soared 12.36 points or 0.53% to 2,351.53 and Taiwan Weighted was up by 26.66 points or 0.24% to 11,000.85.

On the other side, Shanghai Composite fell 11.02 points or 0.39% to 2,795.79, Hang Seng slipped 94.47 points or 0.34% to 27,722.40 and Nikkei 225 was down by 113.98 points or 0.48% to 23,919.81.