Benchmarks trade in red in early deals; Nifty slips below 10,800 level

Indian equity benchmarks made a pessimistic start and are trading with a cut of over half a percent in early deals on Wednesday, as traders remained cautious ahead of the fifth Reserve Bank of India (RBI) Monetary Policy Committee meeting. According to reports, the RBI will keep its repo rate unchanged at 6.50% in the upcoming policy. Investors also remained on sidelines ahead of Services PMI data for the month of November to be out later in the day. Market participants remained cautious with Niti Aayog Vice Chairman Rajiv Kumar’s statement that the country’s economy is likely to bounce back during the fourth quarter at a faster rate to match the overall projection for the current fiscal, but, he added that the economy is unlikely to recover in the third quarter from the slow pace during the last quarter. Traders shrugged off Engineering Export Promotion Council’s (EEPC) statement that India’s engineering exports are likely to touch $80 billion this fiscal on account of healthy growth in key markets, including the US and Europe.

Global cues too remained sluggish with all the Asian counters trading in red at this point of time after an overnight plunge on Wall Street as investors worried about a potential economic slowdown and the state of the US-China trade war. The US markets ended sharply lower on Tuesday, a biggest decline since the October rout, as investors worried about a bond-market phenomenon signaling a possible economic slowdown coupled with lingering worries around US-China trade.

Back home, telecom sector stocks edged lower with ICRA’s report that the much-anticipated recovery in the telecom sector, backed by restoration of pricing power, may be delayed because intense competition is likely to persist. It added that the recent rupee depreciation and higher diesel prices are likely to have further hurt India’s telecom industry. In scrip specific developments, Jain Irrigation inched up with its arm launching Valley Spice range and Oil India edged higher on commissioning Cyclic Steam Stimulation Technology.

The BSE Sensex is currently trading at 35893.36, down by 240.95 points or 0.67% after trading in a range of 35863.59 and 36048.65. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.65%, while Small cap index was down by 0.62%.

The lone gaining sectoral index on the BSE was Oil & Gas up by 0.21%, while Metal down by 1.74%, Consumer Durables down by 1.33%, Basic Materials down by 1.30%, FMCG down by 1.14% and IT was down by 1.04% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.13%, NTPC up by 0.42%, Sun Pharma up by 0.23%, Adani Ports &Special up by 0.17% and Power Grid Corporation up by 0.03%. On the flip side, Tata Motors - DVR down by 2.49%, Indusind Bank down by 2.12%, Tata Motors down by 2.11%, Tata Steel down by 2.01% and Kotak Mahindra Bank down by 1.73% were the top losers.

Meanwhile, expressing optimism over economic growth, Niti Aayog Vice Chairman Rajiv Kumar has said that India’s economy is likely to bounce back during the fourth quarter at a faster rate to match the overall projection for the current fiscal. However, he said the economy is unlikely to recover in the third quarter from the slow pace during the last quarter.

On the overall Gross Domestic Product (GDP) growth of India during the current financial year (FY19), Kumar said Niti Aayog has not done its own projection yet. He added that ‘I think it will be around the same figure as projected by the Reserve Bank, which will be 7.4-7.5%’.

India’s growth in the July-September quarter slipped to 7.1% from 8.2% in the April-June quarter as consumption demand moderated and farm sector displayed signs of weakness. The growth in Q2FY19 was the lowest in three quarters but better than 6.3% in the same period of the previous year, helping the country retain the tag of the world’s fastest-growing major economy, ahead of China.

The CNX Nifty is currently trading at 10787.30, down by 82.20 points or 0.76% after trading in a range of 10785.85 and 10821.05. There were 8 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.29%, ONGC up by 1.09%, Indian Oil Corporation up by 0.48%, NTPC up by 0.35% and HDFC Bank up by 0.24%. On the flip side, Grasim Industries down by 2.92%, JSW Steel down by 2.22%, Hindalco down by 2.21%, Tata Motors down by 2.19% and Tata Steel down by 2.11% were the top losers.

All the Asian markets are trading in red; Nikkei 225 decreased 166.31 points or 0.76% to 21,869.74, Taiwan Weighted tumbled 163.65 points or 1.65% to 9,919.89, Straits Times declined 34.00 points or 1.08% to 3,133.79, Jakarta Composite shed 32.32 points or 0.53% to 6,120.54, Hang Seng dropped 420.39 points or 1.57% to 26,840.05, KOSPI dipped 15.33 points or 0.73% to 2,099.02 and Shanghai Composite was down by 5.71 points or 0.21% to 2,660.25.