Sensex, Nifty trade slightly in red; hover near intra-day low points

After a positive start, Markets were trading slightly in red in the early noon session with Nifty and Sensex hovering near their intra-day low points as investors were cautious ahead of derivatives expiry and the outcome of G-20 summit. Heavy selling in Metal, IT and TECK stocks were pulling the markets lower.  IT stocks slipped on the back of an appreciating rupee. Besides, Yes Bank, Vedanta and Sun Pharma were amongst the top losers on both the Sensex and Nifty indices. Traders were concerned with National Green Tribunal chairman Justice Adarsh Kumar Goel stating that India has earned its pride of place in the world with its economy growing ‘very fast’ but a large number of people still live below the poverty line. However, losses remain capped as macro-concerns eased over a sharp fall in crude oil prices. Some relief also came with report stating that foreign investors have pumped in Rs 6,310 crore into Indian capital markets this month so far, after pulling out massive funds in October, on easing crude oil prices and a strengthening rupee. Meanwhile, a private report stated that India will focus on boosting its exports to the U.S. and other global markets as Chinese shipments become unattractive amid a trade war between the world’s biggest economies.

On the global front, Asian markets were trading mostly in green, despite the sell-off in US equities on Friday. Back home, sugar stocks were in focus with report that the Agriculture Committee of the World Trade Organization (WTO) is set to discuss Australia’s allegation against India over sugar subsidies. Australia feels that such subsidies have caused significant decline in global sugar prices and were hurting its mills. While, OMCs were gaining with a report that ahead of the general elections next year, the government for the first time in the last four years allowed the state-run oil marketing companies to go for a massive expansion of their retail operations by opening close to 56,000 new fuel pumps across the country.

The BSE Sensex is currently trading at 34958.54, down by 22.48 points or 0.06% after trading in a range of 34953.87 and 35184.93. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.36%, while Small cap index was down by 0.58%.

The few gaining sectoral indices on the BSE were Telecom up by 0.88%, FMCG up by 0.59% and Capital Goods up by 0.21%, while Metal down by 1.85%, IT down by 1.54%, TECK down by 1.18%, Basic Materials down by 1.11% and Realty down by 0.94% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.42%, Asian Paints up by 2.26%, Axis Bank up by 1.55%, Hindustan Unilever up by 1.51% and HDFC Bank up by 1.27%. On the flip side, Yes Bank down by 5.11%, Vedanta down by 3.06%, ONGC down by 2.69%, Sun Pharma down by 2.65% and Tata Motors down by 2.33% were the top losers.

Meanwhile, expressing optimism over India’s fiscal position, State Bank of India (SBI) in its latest research report stated that the country’s current account deficit (CAD) is expected to come at 2.6% of Gross Domestic Product (GDP) in the current fiscal as against an earlier expectation of 2.8%, following decline in oil prices. Besides, fiscal deficit in first half of FY19 has already reached 95.3% of full-year budget estimates (BE). As per the report, the recent decline in oil prices might compress the CAD by around $5-6 billion from their estimates of $78 billion.

The report noted that for the second year in succession, direct tax collections are likely to be higher than the budgeted targets by at least around Rs 20,000 crore. There will also be an additional Rs 14,000 crore surplus tax collections under customs duty. In terms of Goods and Services Tax (GST) receipts and excise duty, the report said the picture is not rosy. It said the Rs 20,000 crore collection under LTCG looks difficult to attain given the difficult market conditions.

On the subsidy front, the SBI research said the first six months have seen the total spending reaching 71% of the FY19 target. The significant moderation in oil prices observed lately may give a succour and the additional subsidy burden might be now restricted to Rs 11,720 crore or even less. On the expenditure side, it observed that the government has front loaded its capex (54% of BE during April-September 2018). This will possibly be reduced in the second half of FY19, and so, expenditure is the key to maintain fiscal prudence. It added that government may cut its expenditure by at least Rs 70,000 crore to meet budgeted fiscal deficit of 3.3%.

The CNX Nifty is currently trading at 10497.55, down by 29.20 points or 0.28% after trading in a range of 10496.00 and 10584.95. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.29%, Bharti Airtel up by 2.23%, HPCL up by 1.75%, BPCL up by 1.44% and Axis Bank up by 1.38%. On the flip side, Yes Bank down by 5.32%, Vedanta down by 3.03%, Sun Pharma down by 2.88%, ONGC down by 2.86% and Tech Mahindra down by 2.58% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 371.780 points or 1.41% to 26,299.46, Nikkei 225 increased 165.45 points or 0.76% to 21,812.00, Jakarta Composite increased 2.63 points or 0.04% to 6,008.83, Straits Times increased 24.02 points or 0.78% to 3,076.51, KOSPI increased 22.56 points or 1.08% to 2,080.04, and Taiwan Weighted was up 98.06 points or 1% to 9,765.36.

On the other hand, Shanghai Composite was down 1.75 points or 0.07% to 2,577.73.