Local benchmarks trims initial losses

Local benchmarks trimmed some of their initial losses in morning session but still remain in red territory, ahead of the fifth Reserve Bank of India (RBI) Monetary Policy Committee meeting outcome. Tata Motors, Tata Steel and Vedanta were the prime losers among heavy-weights, pushing the Sensex 0.48% lower. Investors took note of 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. However, the economy is unlikely to recover in the third quarter from the slow pace during the last quarter. Traders paid no heed to a report that India and UAE signed two agreements, including one on currency swap, as External Affairs Minister Sushma Swaraj held exhaustive discussions with her counterpart Abdullah bin Zayed Al Nahyan to step up cooperation in areas like trade, security and defence. Besides, a private report also stated that India is finally catching up with its neighbour and biggest competitor China. The country now has the second highest fintech adoption rate of 52%, only behind China’s 69%.

On the global front, Asian markets were trading in red, following a rout on Wall Street, as investors were bombarded by a ‘perfect storm’ of problems that erased the positivity seen at the start of the week. Back home, SBI research report stated that incremental credit to micro and small enterprises (MSEs) has increased five times to Rs 1.23 lakh crore compared to Rs 25,700 crore during corresponding period pre-GST.

The BSE Sensex is currently trading at 35959.93, down by 174.38 points or 0.48% after trading in a range of 35863.59 and 36048.65. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.90%, while Small cap index was down by 0.79%.

The top losing sectoral indices on the BSE were Metal down by 2.33%, Basic Materials down by 1.66%, Consumer Durables down by 1.26%, Auto down by 1.23% and Industrials was down by 1.03%, while there were no gaining sectoral indices.

The top gainers on the Sensex were HDFC Bank up by 0.66%, Hindustan Unilever up by 0.63%, Asian Paints up by 0.50%, HDFC up by 0.46% and NTPC was up by 0.24%. On the flip side, Tata Motors - DVR down by 2.75%, Tata Motors down by 2.31%, Tata Steel down by 2.28%, Vedanta down by 2.23% and Kotak Mahindra Bank was down by 1.64% were the top losers.

Meanwhile, the Engineering Export Promotion Council (EEPC) has said it is expecting that India's engineering exports will touch $80 billion in current financial year (FY19) in comparison to $76 billion last financial year (FY18). The growth in engineering exports will be mainly on account of healthy growth in key markets, including the US and Europe.

In order to further boost the exports, EEPC also said the government should resolve issues related to credit availability and certain procedural matters. Besides, it demanded more measures such as high incentive rates under the Merchandise Exports from India Scheme (MEIS). It has demanded increase in the MEIS rates from 5-7% from the current 2-3%.

EEPC India Chairman Ravi Sehgal demanded that the manufacturers should get steel at global prices as domestic prices are quite high, adding that downstream players of engineering are impacted due to high steel prices. Additionally, since 2011-12, India's exports have been hovering at around $300 billion. During 2017-18, the shipments grew by about 10% to $303 billion.

The CNX Nifty is currently trading at 10796.40, down by 73.10 points or 0.67% after trading in a range of 10785.85 and 10821.05. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 0.88%, Hindustan Unilever up by 0.82%, HDFC Bank up by 0.73%, Asian Paints up by 0.38% and HDFC was up by 0.32%. On the flip side, Hindalco down by 3.15%, JSW Steel down by 2.98%, Grasim Industries down by 2.87%, Tata Motors down by 2.53% and Vedanta was down by 2.50% were the top losers.

All Asian markets were trading in red, Hang Seng decreased 451.31 points or 1.68% to 26,809.13, Taiwan Weighted dropped 171.77 points or 1.73% to 9,911.77, Nikkei 225 slipped 118.19 points or 0.54% to 21,917.86, Straits Times trembled 34.03 points or 1.09% to 3,133.76, Jakarta Composite dropped 28.89 points or 0.47% to 6,123.97, KOSPI fell 15.16 points or 0.72% to 2,099.19 and Shanghai Composite was down by 5.71 points or 0.21% to 2,660.25.