Benchmarks make pessimistic start; rupee breaches 73/$

Indian equity benchmarks made a pessimistic start and are trading with a cut of over half a percent in early deals, as traders remained on sidelines ahead of the Reserve Bank of India’s monetary policy review later this week. Investors are eyeing Services PMI data for the month of September to be released on October 4. Sentiments remained dampened with the government data showing that the growth of eight core sectors slowed to 4.2% in August, due to fall in output of crude oil, petroleum product and fertiliser. Besides, retail inflation for industrial workers rose to 5.61% in August from 2.52% in the year-ago month mainly due to rise in prices of food items and petroleum products. Weakness in rupee which slipped below 73 per dollar mark for the first time to hit an all-time low of 73.34 in intraday deals too dampened sentiments. The Indian currency dropped to a record low in opening deals on Wednesday as a sharp rise in global crude oil prices over the last two sessions weighed on sentiment for the local unit.

Sluggish global cues too weighed sentiments with Asian markets trading mostly in red, as investors weighed continuing concerns in Indonesia and Italy and strength in commodity prices. The US markets ended mostly lower on Tuesday as investors shift focus to slowing growth prospects, US-China trade dispute, amid fading NAFTA deal sentiment.

Back home, traders shrugged off report that the Commerce Ministry focusing on nine sectors, including pharma, food processing and textiles, to boost exports in the current fiscal. The ministry is targeting a minimum growth rate of 16% in exports this fiscal. Also, traders failed to get any sense of relief with report that the finance ministry expects the GST collections to cross Rs 1 lakh crore in November and December on account of festive season demand and the anti-evasion measures initiated by the revenue department.

The BSE Sensex is currently trading at 36308.41, down by 217.73 points or 0.60% after trading in a range of 36246.55 and 36602.85. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index slipped 0.14%, while Small cap index up by 0.49%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.60%, Realty up by 0.24%, Metal up by 0.12% and PSU was up by 0.01%, while Telecom down by 1.61%, Auto down by 1.38%, Consumer Discretionary Goods & Services down by 0.90%, TECK down by 0.86% and IT was down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 6.86%, Sun Pharma up by 1.00%, Adani Ports & SEZ up by 0.88%, Tata Steel up by 0.76% and Kotak Mahindra Bank up by 0.70%. On the flip side, Maruti Suzuki down by 2.55%, Wipro down by 2.22%, ICICI Bank down by 1.89%, Mahindra & Mahindra down by 1.89% and TCS down by 1.45% were the top losers.

Meanwhile, with an aim to boost exports in the current fiscal (FY19), the Commerce ministry is focusing on nine sectors, including pharma, food processing and textiles. In FY19, the ministry is targeting a minimum growth rate of 16% in exports. The nine sectors include Gems and jewellery, textiles, leather, engineering, electronics, defence, pharma, agri and marine products.

In order to push exports, the ministry has suggested several steps including demanding priority sector lending to exporters. Besides, the Defence Ministry sought cooperation of the Commerce Ministry to boost defence exports from Rs 5,000 crore to Rs 35,000 crore in the coming years.

Ministry of Electronics and IT suggested formulating a strategy to attract companies that are shifting their manufacturing bases from China due to high wages. The Department of Chemicals stated that they are looking at new countries for exports and raised delay in environmental clearance for agro-chemical sector. Since 2011-12, India’s exports have been hovering at around $300 billion. During 2017-18, the shipments grew by about 10% to $303 billion.

The CNX Nifty is currently trading at 10919.35, down by 88.95 points or 0.81% after trading in a range of 10910.05 and 10982.70. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 7.19%, Adani Ports & SEZ up by 0.88%, Kotak Mahindra Bank up by 0.80%, Tata Steel up by 0.69% and Tech Mahindra up by 0.47%. On the flip side, Eicher Motors down by 6.18%, Bharti Infratel down by 5.33%, Maruti Suzuki down by 2.80%, Grasim Industries down by 2.75% and Ultratech Cement down by 2.66% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 207.32 points or 0.86% to 24,063.30, Taiwan Weighted dropped 71.54 points or 0.66% to 10,848.09, Jakarta Composite slipped 14.48 points or 0.25% to 5,861.14, Hang Seng shed 140.54 points or 0.52% to 26,985.84 and KOSPI was down by 29.31 points or 1.27% to 2,309.57. On the flip side, Straits Times increased 25.65 points or 0.78% to 3,268.30.