Indian equities continue weak trade; IT stocks fall

Indian equity benchmarks continued to trade lower in afternoon session, on account of selling in frontline blue chip counters. The mood on the street remained cautious with domestic rating agency Icra’s report stating that after the strong upswing in April-June quarter of current financial year (FY19), GDP growth for July-September quarter is expected to dip to 7.2 percent on account of sluggishness in agriculture and industry. The GDP had grown by a higher than expected 8.2 per cent in the first quarter of FY19 as compared to the year-ago period. Some anxiety also remained among the local traders with report that India's crude oil imports in October rose to their highest level in at least more than seven years. Crude imports in October climbed 10.5 per cent from a year earlier to 21.02 million tonnes. Moreover, a weak trend in other Asian markets dampened investors sentiment. On the sectoral front, shares of aviation and oil marketing companies gained as global crude oil prices dropped nearly 7 percent on worries over global growth amid stalling of a weekend meeting to reduce impact of US-China trade war.

On the global front, Asian markets were trading mostly in red, after a trade dispute between the U.S. and China stalled a weekend meeting, dimming hopes that it could be resolved once their leaders meet. Back home, the BSE Sensex is currently trading at 35222.18, down by 252.33 points or 0.71% after trading in a range of 35112.49 and 35494.25. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.39%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.29%, Telecom up by 0.95%, PSU up by 0.88%, Oil & Gas up by 0.59% and Consumer Durables up by 0.58%, while IT down by 3.25%, TECK down by 2.67%, Energy down by 0.95%, Metal down by 0.82% and Capital Goods down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.04%, SBI up by 2.10%, Asian Paints up by 1.68%, Axis Bank up by 1.66% and Sun Pharma up by 1.62%. On the flip side, TCS down by 3.85%, Infosys down by 3.68%, Bajaj Auto down by 2.33%, Power Grid down by 2.13% and Reliance Industries down by 2.09% were the top losers.

Meanwhile, the fourth Crisidex survey, jointly undertaken by a rating agency Crisil and Small Industries Development Bank of India (SIDBI) has said that sentiment among micro and small enterprises (MSEs) was ‘largely intact’ in Q2 (Jul-Sept) of 2018-19 despite external headwinds in the form of higher crude prices and a depreciating rupee. The findings of the survey come amid heightened anxieties over the state of the micro, small and medium enterprises (MSME) sector, which also led the RBI board to accept the need for a special dispensation to support such businesses.

Six out of ten lenders surveyed saw an improvement in the overall business situation of MSMEs and three out of 10 rated it as satisfactory, compared with four out of 10 each for positive and satisfactory last quarter. For the next quarter, nine out of 10 lenders keep a ‘positive outlook’ for MSMEs. However, when it comes to asset quality, the lenders are not as optimistic, with six of the ten lenders expecting the NPAs ratios to be unchanged, one expecting an increase and three believing it will decrease. The Crisidex score stood at 124, which is a notch below the 127 for the preceding June quarter, but above the 121 in March or 107 in December 2017 quarter.

According to Crisidex survey, both in manufacturing and services, nearly 40 percent of them indicated a significant improvement in activity and companies in both the sectors expect the October-December period to be a better quarter. It also said that half of the respondents each from manufacturing and services sectors expect positive momentum to continue in the next quarter. It also pointed out that auto components, engineering and capital goods, and metals and mining, healthcare, power and utilities and travel and hotels are the most optimistic.

The CNX Nifty is currently trading at 10604.75, down by 51.45 points or 0.48% after trading in a range of 10562.35 and 10671.30. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 6.85%, Yes Bank up by 3.38%, UPL up by 3.00%, Indian Oil Corp. up by 2.91% and BPCL up by 2.46%. On the flip side, TCS down by 3.94%, Infosys down by 3.66%, Tech Mahindra down by 2.65%, Power Grid down by 2.65% and HCL Tech. down by 2.29% were the top losers.

Asian markets were trading mostly in red; KOSPI dipped 6.03 points or 0.29% to 2,076.55, Shanghai Composite was up by 0.32 points or 0.01% to 2,645.53, Taiwan Weighted decreased 2.47 points or 0.03% to 9,741.52, Nikkei 225 fell 75.58 points or 0.35% to 21,507.54 and Jakarta Composite shed 57.55 points or 0.97% to 5,947.75.

On the flip side, Hang Seng increased 82.13 points or 0.32% to 25,922.47 and Straits Times added 18.68 points or 0.61% to 3,045.67.