Indian markets extend losses; trade with minor cuts

Indian equity markets extended losses in the early noon session, with Nifty and Sensex trading with minor cuts, as traders turned cautious ahead of September futures and options (F&O) expiry. Besides, realty witnessed the maximum loss in trade followed by healthcare and capital goods. Selling in frontline blue chip stocks such as Yes Bank and HDFC among others pushed the markets lower. There was some level of pessimism on the street with private report stating that the Reserve Bank of India (RBI) is likely to raise interest rates in early October, despite relatively tame inflation, to prop up a retreating rupee. Investors continued to remain a bit cautious with another private report stating that the ‘higher educated’ are reporting the highest rate of unemployment against the national average, even though India’s economy is growing at a fast pace. Meanwhile, a report stated that intervening to support a falling rupee, the government has increased the import taxes (basic customs duty) on 19 items ranging from white goods, gold jewellery and aviation turbine fuel to footwear and certain plastic items by 2.5 to 10 percentage points.

On the global front, Asian markets were trading mixed as investors considered the prospect of more US interest rate hikes and Donald Trump's latest broadside in his trade war with China. Back home, banking sector remains in focus with RBI data showing that Bank credit rose by 13.46 per cent to Rs 87,98,812 crore in the fortnight ended September 14.

The BSE Sensex is currently trading at 36502.46, down by 39.81 points or 0.11% after trading in a range of 36465.31 and 36711.62. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.20%, while Small cap index was down by 0.99%.

The top gaining sectoral indices on the BSE were IT up by 0.78%, TECK up by 0.72%, Metal up by 0.35%, Energy up by 0.13% and Consumer Durables up by 0.10%, while Realty down by 3.11%, Healthcare down by 1.33%, Capital Goods down by 1.17%, Industrials down by 0.84% and Power was down by 0.66% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.55%, Bajaj Auto up by 1.47%, Infosys up by 1.32%, TCS up by 1.31% and Coal India up by 1.25%. On the flip side, Yes Bank down by 5.88%, HDFC down by 1.81%, Sun Pharma down by 1.57%, Maruti Suzuki down by 1.50% and Tata Motors - DVR down by 1.30% were the top losers.

Meanwhile, with an aim to curtail widening current account deficit (CAD), the government has hiked import duties on 19 items, including jet fuel. The CAD is expanding mainly on the back of high crude oil prices and the rupee dipping to a historic low. Besides, the enhanced duty rates, which will make these imported goods expensive, will come into effect from midnight of September 26-27, 2018. Moreover, the total value of imports of these items in the year 2017-18 was about Rs 86,000 crore.

The import duty on air conditioners, household refrigerators and washing machines (less than 10 kg) doubled to 20%. The basic customs duty on compressors, speakers and footwears raised to 10% , 15% and 25% respectively. The duty on radial car tyres raised from 10% to 15% while for cut and polished diamonds, semi-processed diamonds, lab grown diamonds, coloured gem stones the import hiked from 5% to 7.5%. The articles of jewellery, goldsmith and silver wares will now attract a duty of 20%, up from 15% earlier. Import of bath wares, packing material, tableware, kitchenware and office stationary items, decorative sheets, beads and bangles, trunk, suitcases, and travel bags will now attract basic customs duty of 15% as against 10% earlier.

Besides, the government has also announced an import duty of 5% on aviation turbine fuel (ATF), while it was nil earlier. The announcement follows a decision taken by the government on September 14 that the centre would impose curbs on import of non-essential items to contain the widening CAD and check the rupee fall. The CAD widened to 2.4% of the GDP in the first quarter of 2018-19.

The CNX Nifty is currently trading at 11028.05, down by 25.75 points or 0.23% after trading in a range of 11017.40 and 11089.45. There were 21 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Titan Co up by 3.06%, Bajaj Auto up by 1.68%, Asian Paints up by 1.46%, Infosys up by 1.27% and TCS up by 1.23%. On the flip side, Yes Bank down by 6.01%, Indiabulls Housing down by 5.67%, Bajaj Finance down by 2.51%, Dr. Reddys Lab down by 2.36% and HDFC down by 1.89% were the top losers.

Asian markets were trading mixed; Jakarta Composite increased 39.88 points or 0.67% to 5,913.15, Straits Times surged 14.67 points or 0.45% to 3,253.77, KOSPI added 9.91 points or 0.42% to 2,349.08 and Taiwan Weighted was up 60.00 points or 0.54% to 11,034.19.

On the other hand, Hang Seng decreased 115.77 points or 0.42% to 27,701.10, Shanghai Composite declined 14.60 points or 0.52% to 2,792.21 and Nikkei 225 was down 237.05 points or 1% to 23,796.74.