Benchmarks trade slightly in red in early deals

Indian equity benchmarks made a cautious start and are trading slightly in red in early deals on Tuesday amid renewed worries over global trade after a private report stated that the United States is preparing to announce tariffs on all remaining Chinese imports by early December. Traders remained cautious with the Reserve Bank of India’s (RBI) data showing that Indian companies’ investment in their overseas ventures fell by 47% to $1.54 billion in September 2018. Indian companies had invested $2.91 billion in their joint ventures (JVs) and wholly-owned subsidiaries (WoS) abroad during September 2017. Meanwhile, India and Japan signed a pact to raise the scope of a bilateral currency swap arrangement to a record $75 billion, aimed at bringing in greater stability in the foreign exchange and capital markets, amid a slide in the rupee in recent months.

On the global front, Asian markets are exhibiting mixed trend at this point of time amid worries about the US-China trade war following a report that the US may impose more tariffs against Chinese goods. The US markets ended sharply lower on Monday as technology stocks tumbled after a report the Trump administration was set to press its trade war with China.

Back home, sugar sector stocks remained in focus with report that the Indian Sugar Mills Association said India’s sugar output in the current 2018/19 season is expected to be lower than earlier expectations and could drop further if more sugar gets diverted for ethanol production. The sugar output is now seen at 32 million tonnes for the season that began on October 1, down from its previous forecast of 35-35.5 million tonnes. Stocks related to aluminium sector remained in limelight with report that the government is considering a proposal to increase import duty on aluminium with a view to supporting domestic players.

The BSE Sensex is currently trading at 34044.27, down by 23.13 points or 0.07% after trading in a range of 33931.47 and 34097.35. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.63%, while Small cap index was up by 0.80%.

The top gaining sectoral indices on the BSE were IT up by 1.28%, TECK up by 1.10%, Consumer Durables up by 0.96%, Auto up by 0.73% and Consumer Discretionary Goods & Services was up by 0.55%, while Energy down by 1.60%, Oil & Gas down by 1.01%, Metal down by 0.47%, Power down by 0.34% and PSU was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.64%, Infosys up by 2.13%, Tata Motors up by 1.45%, SBI up by 1.34% and Mahindra & Mahindra up by 1.22%. On the flip side, Reliance Industries down by 1.50%, Indusind Bank down by 1.43%, Coal India down by 1.41%, NTPC down by 1.13% and Sun Pharma down by 1.13% were the top losers.

Meanwhile, the Reserve Bank of India’s (RBI) latest data on outward foreign direct investment (OFDI) showed that investment of Indian companies in their overseas ventures declined by 47.08% to $1.54 billion in September 2018, as compared to $2.91 billion invested in their joint ventures (JVs) and wholly-owned subsidiaries (WoS) abroad during September 2017. Besides, the investment by domestic companies in overseas firms was a mere $992.14 million in August 2018.

According to the data, of the total $1.54 billion investment in September, $950.82 million was in the form of loans, $251.84 million was infused as equity capital and $352.08 million was through the issuance of guarantees. In the September 2017, $1062.66 million was in the form of loans, $384.73 million was infused as equity capital and $1459.94 million was through the issuance of guarantees.

The data also showed that major investors included UPL, which pumped in $408.12 million in its wholly-owned subsidiary in Mauritius, Sanmar Group International infused $77.55 million in WoS in Switzerland and JSW Steel put in $74.87 million in five tranches in its wholly-owned unit and joint ventures located in the US, Italy and Chile. KEC International invested $71.35 million in a JV in Saudi Arabia; ONGC Videsh $59.37 million in its joint-ventures in Russia and Vietnam and Sage Metals put $33.50 million in a wholly-owned unit in the US.

The CNX Nifty is currently trading at 10244.75, down by 6.10 points or 0.06% after trading in a range of 10206.30 and 10259.45. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.53%, GAIL India up by 3.01%, Infosys up by 1.99%, Grasim Industries up by 1.98% and Tech Mahindra up by 1.77%. On the flip side, BPCL down by 4.22%, HPCL down by 3.56%, Indian Oil Corporation down by 2.30%, Cipla down by 1.60% and Reliance Industries down by 1.54% were the top losers.

Asian markets exhibiting mixed trend; Nikkei 225 surged 409.97 points or 1.9% to 21,559.77, Jakarta Composite increased 24.23 points or 0.42% to 5,778.84, KOSPI jumped 21.05 points or 1.04% to 2,017.10 and Shanghai Composite was up by 18.28 points or 0.71% to 2,560.38.

On the flip side, Taiwan Weighted dipped 10.28 points or 0.11% to 9,506.04, Straits Times decreased 11.81 points or 0.4% to 2,969.73 and Hang Seng was down by 42.27 points or 0.17% to 24,769.77.