Local equities continue lackluster trade amid weak global cues

Extending previous session's southward journey, local equity benchmarks magnified losses to continue its weak trade in the morning session tailing by oil and metal stocks amid weak cues from global equity markets. A level of pressure was seen on frontline stocks, especially in Maruti Suzuki, Vedanta and ONGC, while Sun Pharma and Power Grid were the only gainers. Traders took note of RBI governor Urjit Patel’s statement that if the upside risks to inflation do not materialise, the bank may change its monetary policy accordingly, raising prospects of rate cuts. Traders paid no heed to Commerce and Industry Ministry’s report stating that signing of currency swap agreement between India and the UAE will help in boosting trade and investments between the two countries. Beside, RBI reported that it has decided to reduce statutory liquidity ratio, the portion of funds which banks are required to park in treasury bills and other instruments, by 0.25% every quarter beginning January. On the sectoral front, reality industries stock fell despite, RBI’s decision to keep the repo rate unchanged, real estate industry move is likely to reinforce confidence in home buyers resulting in improved sales.

On the global front, Asian markets were trading in red, continuing a decline in markets worldwide ahead of a closely watched meeting by the Organization of the Petroleum Exporting Countries (OPEC). Besides, Canadian authorities arrested a top executive of Chinese tech giant Huawei Technologies, fanning fears of further tensions between China and US. Back home, India Inc stated that the RBI’s decision to maintain status quo in its monetary policy was on expected lines in view of headwinds and sought more measures by the central bank to improve the credit flow to the economy.

The BSE Sensex is currently trading at 35512.65, down by 371.76 points or 1.04% after trading in a range of 35506.48 and 35707.23. There were 2 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 1.29%, while Small cap index was down by 1.19%.

The top losing sectoral indices on the BSE were Realty down by 2.74%, Telecom down by 1.80%, Auto down by 1.74%, Oil & Gas down by 1.54% and Consumer Durables was down by 1.51%, while there were no gainers on the sectoral indices.

The only gainers on the Sensex were Sun Pharma up by 2.76% and Power Grid was up by 0.55%. On the flip side, Maruti Suzuki down by 3.10%, ONGC down by 3.06%, Vedanta down by 2.37%, ICICI Bank down by 1.85% and Tata Motors was down by 1.83% were the top losers.

Meanwhile, among the world's fastest growing emerging economies, Finance Minister Arun Jaitley has said that India may maintain the ‘high growth rate’ of 7-8% over the next decade. The minister underlined that   landmark reforms such as the Insolvency and Bankruptcy Code (IBC) offer an attractive and conducive environment to foreign investors to the country.

He further stated that the 7% economic growth rate by Indian standards is now considered to be the lower end of the moderate growth rate and their aspiration is to touch and cross that 7%. Besides, highlighting the investment opportunities in India through the IBC process, he said it is a great opportunity as far as investors are concerned and therefore those seriously thinking about investment in India. He also mentioned given the future potential of the Indian economy, the fair manner in which the IBC is now proceeding.

Moreover, he pointed out that there cannot be a better opportunity than the present one which is being offered through the IBC process itself. This is the right time and right place to be in India for these kinds of investments. He noted that about 1200 applications have been filed as far as resolution under the IBC are concerned and about 1000 cases are pending. This means that over the next few months these assets will go in for a bidding process and it's a great opportunity to come and look at these assets.

The CNX Nifty is currently trading at 10661.15, down by 121.75 points or 1.13% after trading in a range of 10654.00 and 10722.65. There were 2 stocks advancing against 48 stocks declining on the index.

The only gainers on Nifty were Sun Pharma up by 2.86% and Power Grid was up by 0.54%. On the flip side, Indiabulls Housing Finance down by 4.04%, Tech Mahindra down by 3.91%, Maruti Suzuki down by 3.08%, ONGC down by 2.92% and Vedanta was down by 2.47% were the top losers.

All Asian markets were trading in red, Hang Seng decreased 694.79 points or 2.66% to 26,124.89, Taiwan Weighted dropped 240.41 points or 2.48% to 9,676.33, Nikkei 225 slipped 531.01 points or 2.48% to 21,388.32, Straits Times trembled 35.84 points or 1.15% to 3,120.08, Jakarta Composite dropped 32.21 points or 0.53% to 6,100.91, KOSPI fell 36.36 points or 1.76% to 2,064.95 and Shanghai Composite was down by 33.99 points or 1.3% to 2,615.82.