Indian equities continue weak trade; Realty stocks fall

Indian equity benchmarks continued to trade lower in afternoon session, as concerns over falling rupee, rising crude oil prices and uncertainty over the RBI policy meet later this week weighed on investors’ sentiment. The mood of the markets remain impacted by the RBI's report that India’s external debt declined 2.8% to $514.4 billion at June-end over the previous quarter on account of a decrease in commercial borrowings, short-term debt and non-resident Indian (NRI) deposits. Additional pressure also came with India Meteorological Department (IMD) stating that at the end of the four-month-long monsoon season this year, the rainfall recorded in the country as a whole has remained 9 percent short of the normal mark. The market participants overlooked a monthly survey indicating that India’s manufacturing sector activity improved in September amid gains in new orders, output and employment. The Nikkei India Manufacturing Purchasing Managers' Index strengthened slightly in September to 52.2, up from 51.7 in August. On the sectoral front, auto stocks remained in limelight as companies report their sales number today. Bajaj Auto has registered a rise of 17% in total sales to 502,009 units in September 2018 against 428,752 units in September 2017. 

On the global front, Asian markets were trading mostly in red, following the lackluster cues from Wall Street Friday and as investors digested mixed regional economic data, including data showing a slowdown in China's manufacturing sector in September. Back home, the BSE Sensex is currently trading at 36089.55, down by 137.59 points or 0.38% after trading in a range of 35960.65 and 36291.51. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index down by 1.78%, while Small cap index was down by 2.56%.

The only gaining sectoral indices on the BSE were IT up by 2.58% and TECK up by 2.09%, while Realty down by 3.31%, Capital Goods down by 3.08%, Energy down by 2.73%, Consumer Durables down by 2.62% and Industrials down by 2.48% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.49%, TCS up by 3.46%, Infosys up by 3.17%, Wipro up by 1.93% and HDFC up by 1.25%. On the flip side, Kotak Mahindra Bank down by 5.55%, Axis Bank down by 3.71%, Larsen & Toubro down by 3.45%, Bharti Airtel down by 3.40% and Reliance Industries down by 3.30% were the top losers.

Meanwhile, global rating agency, Fitch ratings in its latest report has said that a new telecom policy, namely National Digital Communications Policy (NDCP) 2018, will help companies in serving growing data needs, cut costs and reduce red tape. The new policy aims to attract $100 billion in investments, create four million jobs in the telecom sector by 2022, and boost the sector's contribution to 8% of GDP from 6% in 2017 as well as backing the principles of net neutrality.

According to the report, the NDCP's plan to expand broadband coverage funded by the universal service obligation fund and in partnership with private telcos is expected to support private telecom companies' growth, as it will broaden the customer base and improve Internet adoption, particularly in rural areas. However, it said that implementing proposals like connecting six lakh villages to the broadband network, establishing two million Wi-Fi hotspots in rural areas and one million in urban areas, will be a challenge.

The rating agency also cautioned that accelerated 5G deployment will encourage companies to increase investment in 5G spectrum which, depending on the 5G spectrum asset price, may further stretch already heavily indebted balance sheets over the next two years. It pointed out that at present, the telcos face a lot of pressure on taxes through licence fees, spectrum usage charges and universal service fees on top of expensive spectrum assets, while the litigation is also high.

The CNX Nifty is currently trading at 10857.00, down by 73.45 points or 0.67% after trading in a range of 10821.55 and 10931.90. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were TCS up by 3.63%, Yes Bank up by 3.40%, Hindalco up by 2.90%, Infosys up by 2.87% and Wipro up by 2.01%. On the flip side, Kotak Mahindra Bank down by 5.37%, Ultratech Cement down by 4.67%, HPCL down by 4.22%, Larsen & Toubro down by 3.88% and Axis Bank down by 3.84% were the top losers.

Asian markets were trading mostly in red; Straits Times was down by 1.60 points or 0.05% to 3,255.45, Jakarta Composite fell 28.83 points or 0.48% to 5,947.72 and KOSPI dropped 4.19 points or 0.18% to 2,338.88. On the flip side, Nikkei 225 increased 125.72 points or 0.52% to 24,245.76 and Taiwan Weighted rose 45.46 points or 0.41% to 11,051.80.