Local equities turn negative

Local equity benchmarks erased all of their early gains to trade just below neutral lines in morning session, both Sensex and Nifty were trading below their crucial 35,150 and 10,600 marks, respectively. A level of pressure was seen on frontline stocks, especially Tata Motors, Hero MotoCorp and Yes Bank. Traders remained cautious with former RBI governor Raghuram Rajan’s statement that demonetisation and the Goods and Services Tax (GST) are the two major headwinds that held back India’s economic growth last year, asserting that the current 7% growth rate is not enough to meet the country’s needs. Market participates remained on the sideline with a report stating that exports of over half of the 30 sectors closely monitored by the Commerce Ministry were in the negative zone in September. Overall exports in September were contracted by 2.15% to $27.95 billion mainly due to the base impact. However, losses remained capped with a private report stating that revaluation of gold reserves and a stronger rupee lifted India’s foreign exchange (forex) reserves by over $1 billion in the week ended November 02.

On the global front, Asian markets were trading in red, as investors assessed whether the recent rallies can endure. The pound slipped as UK Prime Minister Theresa May fought to keep her Brexit divorce plan alive. Back on domestic turf, Finance Minister Arun Jaitley stressed the need to enhance the lending capacity of banks so that the sectors that are in dire need of credit, including the MSMEs, get support and the NBFCs’ liquidity position improves.

The BSE Sensex is currently trading at 35149.14, down by 9.41 points or 0.03% after trading in a range of 35094.33 and 35333.22. There were 11 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.42%, while Small cap index was down by 0.47%.

The top gaining sectoral indices on the BSE were IT up by 1.14%, TECK up by 0.80%, Consumer Durables up by 0.54%, Capital Goods up by 0.16% and FMCG was up by 0.02%, while Telecom down by 1.29%, Realty down by 0.89%, Auto down by 0.85%, PSU down by 0.70% and Metal was down by 0.59% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.56%, Kotak Mahindra Bank up by 1.05%, ONGC up by 0.89%, TCS up by 0.83% and Coal India was up by 0.45%. On the flip side, Tata Motors down by 3.07%, Tata Motors - DVR down by 2.29%, Yes Bank down by 2.28%, Hero MotoCorp down by 1.56% and Power Grid was down by 1.38% were the top losers.

Meanwhile, the commerce ministry in its latest data has showed that Exports of over half of the 30 sectors were in the negative zone in September, 2018. The data showed that Overall exports in September contracted by 2.15% to $27.95 billion mainly on account of the base impact. Outbound shipments of as many as 16 key sectors -- including rice, tea, coffee, tobacco, engineering, leather, spices, cashew, fruits and vegetables, marine products and gems and jewellery -- dipped during the month under review.

In the month of September, important segments like engineering, readymade garments of textiles, gems and jewellery and leather exports contracted by 4.12%, 33.58%, 21.7% and 13%, respectively. These sectors contribute significantly in the country's total outbound shipments. Agri-products, which constitute over 10% of the country's total shipments, too recorded a negative growth during the month under review. Overall, eight out of 13 main agriculture products slipped into negative territory. Exports of rice, cashew and tea fell 31.64%, 29.3% and 15%, respectively. However, shipments of pharmaceuticals, plastic, chemicals, and electronics have recorded positive growth in September.

Besides, Federation of Indian Export Organisation (FIEO) President Ganesh Gupta has said that the negative growth in September is primarily on account of high base effect last year. Though, he expressed hopes that the export growth would be better in the coming months as the order books are healthy. Steps like increasing interest subsidy to 5% from 3% recently would give a further boost to exports.

Additionally, during April-August 2018-19, exports recorded a growth of 12.54%. Imports during the period rose by 16.16%, leaving a trade deficit of $94.32 billion in the first half of the current financial year.

The CNX Nifty is currently trading at 10582.55, down by 2.65 points or 0.03% after trading in a range of 10571.55 and 10645.50. There were 18 stocks advancing against 31 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tech Mahindra up by 2.73%, Titan Company up by 2.35%, HCL Tech up by 2.15%, Infosys up by 2.00% and Cipla was up by 1.36%. On the flip side, HPCL down by 3.29%, Tata Motors down by 3.07%, Yes Bank down by 2.33%, Bharti Infratel down by 1.90% and Hero MotoCorp was down by 1.68% were the top losers.

Asian markets were trading mixed; Nikkei 225 gained 27.66 points or 0.12% to 22,277.91, Hang Seng rose 76.93 points or 0.3% to 25,678.85, Shanghai Composite soared 17.42 points or 0.67% to 2,616.29 and Taiwan Weighted was up by 22.04 points or 0.22% to 9,852.05.

On the other hand, KOSPI slipped 8.36 points or 0.4% to 2,077.73, Jakarta Composite declined 47.94 points or 0.82% to 5,826.21 and Straits Times was down by 6.75 points or 0.22% to 3,071.22.