Local equities continue lackluster trade

Local equity benchmarks continued their lackluster trade in morning session, with Sensex and Nifty falling over 80 and 45 points, respectively, amid mixed signals from other Asian markets. A level of pressure was seen on frontline stocks, especially Bharti Airtel and Kotak Mahindra Bank. Telecom, Consumer Durables and Capital Goods counters witnessed notable losses, while IT and Metal sectors edged higher. Sentiments remained cautious with report that overseas investors pulled out a massive Rs 21,000 crore ($3 billion) from the capital markets in September, making it the steepest outflow in four months, on widening current account deficit amid global trade tensions. Traders failed to draw any sense of relief from a report that India’s economic reforms and growth story offer compelling evidence that openness in services contributes to long run growth performance.

On the global front, Asian stocks were trading mixed, as the US and Canada announced that they had reached a deal to replace the North American Free Trade Agreement. Back home, on the sectoral front, Consumer durable stocks slips despite a private report that Consumer durable makers expect a double-digit growth in sales this festive season despite a hike in customs duty as most of them have chosen to absorb the impact and not to pass it on to consumers.

The BSE Sensex is currently trading at 36141.97, down by 85.17 points or 0.24% after trading in a range of 36079.01 and 36291.51. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.92%, while Small cap index was down by 1.40%.

The few gaining sectoral indices on the BSE were IT up by 1.26%, TECK up by 0.89%, Utilities up by 0.25% and Metal was up by 0.12%, while Telecom down by 2.31%, Consumer Durables down by 1.91%, Capital Goods down by 1.46%, Realty down by 1.27% and Consumer Disc was down by 1.14% were the  top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.64%, Infosys up by 1.53%, Tata Motors - DVR up by 1.20%, SBI up by 0.87% and Wipro was up by 0.83%. On the flip side, Bharti Airtel down by 4.27%, Kotak Mahindra Bank down by 3.80%, Indusind Bank down by 2.76%, Axis Bank down by 2.18% and Hero MotoCorp was down by 1.85% were the top losers.

Meanwhile, with the US economy growing at its best in four years coupled with the rupee depreciation leading to enhanced net revenue realizations, the industry chamber, Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its latest report has said that India’s exports hold a promising outlook. Besides, the commerce ministry data showed that the US emerged as the top export destination for India, with $47.9 billion worth of shipments in the last fiscal ended March, followed by the UAE and Hong Kong.

The US economic growth accelerated by 4.2% in the second quarter of this year, its fastest pace in about four years despite the ongoing tariff war with China. The report stated that the US accounted for about a good chunk of 16% of the country’s total merchandise exports of $303 billion in the fiscal 2017-18 with the annual growth of 13.42%. It is the largest market for Indian exports, both for merchandise and even services. So, when the US grows at its current pace, it augurs very well for the total Indian exports' basket.

ASSOCHAM further said a sharp drop in rupee may have caused a burden on the country's import bill, but the net realisations for exporters have increased significantly. According to the trade data for August 2018, while exports have shown a growth of about 19% in dollar terms, the rupee realisations for the export shipments went up close to 30%. It said with further streamlining of exporters' GST refunds, their competitiveness should also improve, helping them in the global market. It added engineering goods, chemicals, gems and jewellery are among the major items of exports to the US from India. It expects that with the focus of the Trump administration on infrastructure build-up, the demand for Indian exports, particularly of steel and other engineering goods should increase.

The CNX Nifty is currently trading at 10884.20, down by 46.25 points or 0.42% after trading in a range of 10855.60 and 10931.90. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.84%, Hindalco up by 1.65%, TCS up by 1.61%, GAIL India up by 1.48% and Infosys was up by 1.07%. On the flip side, Bharti Airtel down by 4.53%, Kotak Mahindra Bank down by 3.64%, Axis Bank down by 3.20%, UPL down by 2.99% and Indusind Bank was down by 2.92% were the top losers.

Asian markets were trading mixed, Nikkei 225 surged 129.00 points or 0.53% to 24,249.04, Straits Times gained 9.20 points or 0.28% to 3,266.25 and Taiwan Weighted was up by 45.82 points or 0.41% to 11,052.16.

On the other side, Jakarta Composite slipped 24.15 points or 0.41% to 5,952.40 and KOSPI was down by 6.09 points or 0.26% to 2,336.98.