Local equities extend losses in morning deals

Local equity benchmarks extended their losses in morning session, with Sensex and Nifty falling around 300 and 90 points, respectively. Telecom, Auto, Consumer Disc and TECK counters witnessed notable losses, while Metal and Healthcare sectors edged higher. The rupee weakened and past the 73 mark against the US dollar for the first time after crude oil prices surged near $85 barrel. Sentiments remained pessimistic with a report that Reserve Bank of India (RBI) is likely to increase the repo rate by 25 basis points in the upcoming monetary policy review as inflation is expected to accelerate further due to higher crude prices and the weakness in rupee. The monetary policy committee will start its three-day meeting from October 3 to decide on the fourth bi-monthly monetary policy. Sentiments also remained down-beat with a report that India’s core sector output grew at a slower pace of 4.2% in August 2018, from 7.3% in July 2018, as output of coal, refinery products and fertilisers moderated. However, traders failed to get any sense of relief from a report that the country’s microfinance sector which rose by 25% in the first quarter, may need Rs 6,000-9,000 crore over the next three years to meet it growth plans. The growth prospects for the sector remain good and the industry is expected to grow at 20-22% in the current financial year.

On the global front, Asian markets were trading mostly in red, following a volatile US session as investors weighed continuing concerns in Indonesia and Italy and strength in commodity prices. Back home, on the sectoral front, Power stocks were trading lower, despite Prime Minister Narendra Modi stated that India is targeting 40% of electricity generation from non-fossil fuel-based resources by 2030 as it looks to tap vast solar and wind potential to replace reliance on polluting coal to meet its energy needs.

The BSE Sensex is currently trading at 36228.10, down by 298.04 points or 0.82% after trading in a range of 36217.31 and 36602.85. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.63%, while Small cap index was up by 0.49%.

The only gaining sectoral indices on the BSE were Metal up by 0.32% and Healthcare was up by 0.23%, while Telecom down by 2.54%, Auto down by 1.84%, Consumer Disc down by 1.28%, Consumer Durables down by 1.18% and TECK was down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 7.48%, Adani Ports & SEZ up by 1.51%, Tata Steel up by 0.77%, ONGC up by 0.45% and Kotak Mahindra Bank was up by 0.41%. On the flip side, Mahindra & Mahindra down by 3.25%, Maruti Suzuki down by 2.67%, Bharti Airtel down by 2.64%, Indusind Bank down by 1.86% and ICICI Bank was down by 1.80% were the top losers.

Meanwhile, India’s core sector output grew at a slower pace of 4.2% in August 2018, from 7.3% in July 2018, as output of coal, refinery products and fertilisers moderated. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 128.1 in August, 2018, which was 4.2% higher compared to the index of August, 2017. Its cumulative growth during April to August, 2018-19 was 5.5%. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Among eight core sectors, Coal production having 10.33% weight rose 2.4 % in August, 2018 over August, 2017, and its cumulative index increased by 10.3% during April to August, 2018-19 over corresponding period of the previous year. Petroleum Refinery production having 28.04% weight increased 5.1% in August, 2018 over August, 2017 and its cumulative index surged by 7.4% during April to August, 2018-19 over the corresponding period of previous year.

The Natural Gas production having 6.88% weight rose by 1.1% in August, 2018 over August, 2017, while its cumulative index was down by 0.6% during April to August, 2018-19 over the corresponding period of previous year. On the flip side, Steel production having 17.92% weight jumped by 3.9% in August, 2018 over August, 2017 and its cumulative index increased by 3.4% during April to August, 2018-19 over the corresponding period of previous year.

Fertilizer production having 2.63% weight declined by 5.3% in August, 2018 over August, 2017, while its cumulative index rose by 1.7% during April to August, 2018-19 over the corresponding period of previous year. Cement production having 5.37% weight jumped 14.3% in August, 2018 over August, 2017 and its cumulative index increased by 14.7% during April to August, 2018-19 over the corresponding period of previous year. On the other hand, Crude Oil production having 8.98% weight declined by 3.7% in August, 2018 over August, 2017 and its cumulative index fell by 3.3% during April to August, 2018-19 over the corresponding period of previous year. 

The CNX Nifty is currently trading at 10918.15, down by 90.15 points or 0.82% after trading in a range of 10901.20 and 10982.70. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 8.07%, Vedanta up by 1.57%, Tata Steel up by 1.41%, Adani Ports & SEZ up by 1.17% and Kotak Mahindra Bank was up by 0.97%. On the flip side, Eicher Motors down by 5.97%, Bharti Infratel down by 5.01%, Grasim Industries down by 2.89%, Mahindra & Mahindra down by 2.87% and Maruti Suzuki was down by 2.60% were the top losers.

Asian markets were trading mostly in red, Jakarta Composite slipped 25.12 points or 0.43% to 5,850.50, KOSPI dropped 29.31 points or 1.27% to 2,309.57, Hang Seng fell 88.21 points or 0.33% to 27,038.17, Nikkei 225 declined 166.81 points or 0.69% to 24,103.81 and Taiwan Weighted was down by 61.07 points or 0.56% to 10,858.56. On the other side, Straits Times was up by 25.93 points or 0.79% to 3,268.58.