Local equities show sluggish trend

Local equity benchmarks continue to show sluggish trend in morning session, with frontline gauges trading tad below their neutral lines, owing to selling pressure in frontline blue-chip counters. Sun Pharma, Infosys and TCS were the prime losers among heavy-weights, pushing Sensex lower. Traders remained cautious ahead of macro data of wholesale price inflation for October scheduled to be released later in the day. However, losses remained capped as traders took some support with RBI’s report stating that based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward, the RBI has decided to conduct purchase of the following government securities under Open Market Operations for an aggregate amount of Rs 120 billion on November 15, 2018. Besides, SEBI has tightened disclosure and review norms for credit rating agencies (CRAs). SEBI ordered CRAs to analyse deterioration in the liquidity conditions of an issuer, while monitoring its repayment schedules and taking into account any asset-liability mismatches.

On the global front, Asian Markets were trading mostly in red, as oil prices slipped further into negative territory. China markets, which have been closely watched by investors because of the ongoing US-China trade war. Back home, Coal Industries stock remained in focus, as a private report stated that Niti Aayog plans to come out with a policy prescription on how India should meet its demand for coal in domestic power and non-power sectors to cut imports of the fossil fuel over the next 10 years.

The BSE Sensex is currently trading at 35089.14, down by 55.35 points or 0.16% after trading in a range of 35042.31 and 35351.88. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.54%, while Small cap index was up by 0.06%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.39%, PSU up by 1.21%, Energy up by 0.89%, Basic Materials up by 0.58% and Consumer Disc was up by 0.43%, while IT down by 2.78%, TECK down by 2.48%, Healthcare down by 1.03%, Capital Goods down by 0.47% and Realty was down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 3.15%, Tata Steel up by 3.08%, Hindustan Unilever up by 2.50%, IndusInd Bank up by 1.84% and Bharti Airtel was up by 1.53%. On the flip side, Sun Pharma down by 4.62%, Infosys down by 3.18%, TCS down by 2.93%, Wipro down by 1.86% and Axis Bank was down by 1.43% were the top losers.

Meanwhile, with an aim to ease tight liquidity situation, the Reserve Bank (RBI) will infuse Rs 12,000 crore into the system through purchase of government securities on November 15.  The RBI has decided to conduct purchase of government securities under Open Market Operations (OMOs) for an aggregate amount of Rs 12,000 crore on November 15, 2018, based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward. OMOs are the tools which can be used to either inject or drain liquidity from the system.

As part of the OMOs, the RBI will purchase government securities maturing in 2021 bearing interest rate of 8.79%, 2022 (6.84%), 2024 (8.40%), 2027 (8.24%) and 2033 (6.57%). The eligible participants should submit their offers in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on November 15. The result of the auction will be announced on the same day and payment to successful participants will be made the following day. Besides, the RBI said it has the right to decide on the quantum of purchase of individual securities and can also accept offers for less than Rs 12,000 crore.

Additionally, the RBI had earlier stated that the system liquidity will move into deficit in the second half of 2018-19 and the evolving liquidity conditions would determine its choice of instruments for both transient and durable liquidity management.

The CNX Nifty is currently trading at 10571.05, down by 11.45 points or 0.11% after trading in a range of 10559.25 and 10651.60. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HPCL up by 8.38%, BPCL up by 7.39%, Indian Oil Corporation up by 6.93%, Tata Steel up by 3.08% and Asian Paints was up by 3.00%. On the flip side, Sun Pharma down by 4.94%, HCL Tech down by 3.62%, Tech Mahindra down by 3.61%, Infosys down by 3.35% and TCS was down by 2.93% were the top losers.

Asian Markets were trading mostly in red; Nikkei 225 fell 1.04 points to 21,809.48, Hang Seng slipped 100.97 points or 0.39% to 25,691.90, KOSPI dropped 6.41 points or 0.31% to 2,064.82, Straits Times declined 12.14 points or 0.4% to 3,041.46 and Shanghai Composite was down by 1.64 points or 0.06% to 2,653.24.

On the other hand; Taiwan Weighted gained 12.45 points or 0.13% to 9,788.29 and Jakarta Composite was up by 51.56 points or 0.88% to 5,886.76.