Benchmarks trade lower in early deals

Indian equity benchmarks made pessimistic start and are trading with a cut of around one third of a percent in early deals on Tuesday following weakness in its other Asian counterparts amid uncertainty about the future of US-China trade relations. Traders remained cautious with Crisil cutting India’s growth forecast for current fiscal to 7.4% on the back of weakening GDP growth and lower global trade forecasts. India’s growth in the July-September quarter slipped to 7.1% from 8.2% in the April-June quarter. It added that India’s export, which saw a revival in early part of 2018, could likely see a slower growth. Traders remain concerned about ICRA’s statement that India’s current account deficit is likely to rise to 3% of GDP in the July-September quarter of current fiscal, from 2.4% in the preceding quarter, driven mainly by high crude oil prices. Traders reacted negatively to a private report that the recent move by the US government to change the method of H-1B visa allotment is a mixed bag for India. It added that while the move is expected to have a negative impact on the Indian technology services industry.

Global cues too remained sluggish with most of the Asian counters trading in red at this point of time, as a relief rally sparked by a truce in the US-China trade war gave way to doubts on whether the two countries are able to resolve their differences before a 90-day deadline. The US markets ended sharply higher on Monday after President Trump and President Xi Jinping agreed to a temporary truce in the trade war between the United States and China.

Back home, the finance ministry said Rs 91,149 crore has been issued so far to exporters as Goods and Services Tax (GST) refunds, which are 93.77% of total claims with the tax authorities. It also said Rs 6,053 crore worth GST refund is still pending with the government and that is being expeditiously processed. In scrip specific developments, NMDC gained on reducing iron ore prices by Rs 300 per tonne for December and India Cements surged on entering into agreement to acquire Springway Mining.

The BSE Sensex is currently trading at 36114.87, down by 126.13 points or 0.35% after trading in a range of 36087.07 and 36295.84. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.16%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.73%, Healthcare up by 0.65%, PSU up by 0.40%, Basic Materials up by 0.28% and Industrials was up by 0.20%, while Realty down by 0.77%, Telecom down by 0.60%, Power down by 0.42%, FMCG down by 0.40% and Utilities was down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 1.94%, Yes Bank up by 1.71%, ONGC up by 1.61%, Tata Motors up by 1.54% and Sun Pharma up by 1.41%. On the flip side, Mahindra & Mahindra down by 1.76%, HDFC down by 1.72%, NTPC down by 1.48%, Bharti Airtel down by 1.20% and Kotak Mahindra Bank down by 1.09% were the top losers.

Meanwhile, citing weak Gross Domestic Product (GDP) growth and forecasts of lower global trade, rating agency Crisil in its latest report has lowered India’s economic growth forecast by 10 basis points (bps) to 7.4% for the current fiscal year (FY19), from 7.5% forecasted earlier. Besides, the country’s growth in the July-September quarter slipped to 7.1% from 8.2% in the April-June quarter.

Crisil also projected that India's export, which saw a revival in early part of 2018, could likely see a slower growth. It further said that the forecast has a downward bias given that global growth prospects are turning weaker than estimated earlier. Also, if liquidity issues persist in the financial system, demand could get further dented. The report noted that for the rest of the current financial year, growth will find support from private consumption, driven by continues government spending on construction activities, benign inflation and revision in government salaries at the state level.

However, the rating agency said that despite the downward revision at 7.4%, India's growth in the financial year 2019 will be faster than both, the 6.7% seen in financial year 2018 and the trend rate of growth. It said the long-term average growth rate seen in the last 13 years, as per the recently released GDP back series data is 6.9%.

The CNX Nifty is currently trading at 10850.90, down by 32.85 points or 0.30% after trading in a range of 10845.75 and 10890.95. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were UPL up by 1.70%, ONGC up by 1.58%, Dr. Reddys Lab up by 1.53%, Yes Bank up by 1.52% and HPCL up by 1.40%. On the flip side, HDFC down by 2.08%, Mahindra & Mahindra down by 1.96%, NTPC down by 1.45%, Bharti Airtel down by 1.13% and HDFC Bank down by 1.05% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 314.06 points or 1.41% to 22,260.70, Taiwan Weighted decreased 33.45 points or 0.33% to 10,104.42, Straits Times dropped 29.80 points or 0.94% to 3,160.82, Hang Seng shed 70.03 points or 0.26% to 27,112.01 and KOSPI was down by 12.82 points or 0.6% to 2,119.11.

On the flip side, Jakarta Composite increased 21.42 points or 0.35% to 6,139.74 and Shanghai Composite was up by 1.16 points or 0.04% to 2,655.96.