Local equities continue sluggish trend

Pressurized by mixed global cues, local equity benchmarks continued to trade lower in morning deals, breaching their crucial 34,650 (Sensex) and 10,400 (Nifty) levels. Energy, Oil & Gas and Telecom counters witnessed notable losses, while IT, FMCG and TECK sectors edged higher. Traders took note of Moody’s Investors report that the independence of a country’s central bank is an important consideration while assessing a country’s institutional strength and any attempt by the government to curtail it would be credit negative. Investors paid to heed to report that Corporate tax (CIT) collection grew an impressive 18.3% in April-November of FY19, the fastest pace in at least the last five years, on the back of a better compliance brought about by goods and services tax (GST), digitisation and inter-linking of various government departments leading to an efficient detection of tax evasion. Meanwhile, a report also stated that bilateral trade between India and Romania could touch $1 billion in the fiscal 2018-19. The total bilateral trade currently stands at $810 million.

On the global front, Asian markets were trading mixed, after further discussions on trade between Washington and Beijing, and a rebound in US shares overnight. Back home, on the sectoral front, Pharma Industry stocks were trading higher, despite a private report stated that Indian pharmaceutical market (IPM) grew 6.3% in November, much slower than the previous month, due to lower offtake of anti-infective and respiratory medicines.

The BSE Sensex is currently trading at 34610.73, down by 348.99 points or 1.00% after trading in a range of 34426.29 and 34744.68. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.08%, while Small cap index was down by 0.09%.

The top gaining sectoral indices on the BSE were IT up by 0.69%, TECK up by 0.38%, FMCG up by 0.26% and Healthcare was up by 0.25%, while Energy down by 1.88%, Oil & Gas down by 1.81%, Telecom down by 1.77%, Bankex down by 1.26% and Metal was down by 1.14% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.69%, Asian Paints up by 1.47%, TCS up by 0.94%, SBI up by 0.86% and Sun Pharma was up by 0.73%. On the flip side, Bharti Airtel down by 2.89%, Tata Steel down by 2.64%, HDFC Bank down by 2.32%, ICICI Bank down by 2.24% and Reliance Industries was down by 1.94% were the top losers.

Meanwhile, rating agency ICRA has assigned a negative outlook to the domestic airline industry. However, rating agency is expecting that the domestic passenger traffic growth will remain healthy at around 15-16 per cent over the medium term, supported by low penetration levels, favourable macro environment, regulatory push towards regional connectivity and development of new airports.

ICRA stated that while the passenger traffic growth remained strong during the previous fiscal and the first half of the current fiscal, the industry faced a double whammy with increasing jet fuel cost and rupee depreciation. It added the cost pressures are expected to continue in the balance part of FY19, resulting in further weakening of the financial health of the industry.

Besides, it underlined that rise in aviation fuel price and rupee depreciation has squeezed revenue and cost per available seat kilometre (RASK-CASK), exerting significant pressure on operating profitability of airlines. This will result in significantly higher losses (at net level) in the fiscal 2018-19 as compared to the previous fiscal. Moreover, it added that the airline industry maintains strong capacity addition plans, as reflected in the large order book of the domestic airlines.

The CNX Nifty is currently trading at 10385.10, down by 103.35 points or 0.99% after trading in a range of 10333.85 and 10430.65. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.47%, Indiabulls Housing Finance up by 1.81%, Tech Mahindra up by 1.40%, Asian Paints up by 1.24% and HCL Tech was up by 1.24%. On the flip side, Bharti Airtel down by 3.42%, Indian Oil Corporation down by 3.28%, HPCL down by 3.15%, Tata Steel down by 2.83% and HDFC Bank was down by 2.40% were the top losers.

Asian markets were trading mixed, Nikkei 225 slipped 84.18 points or 0.40% to 21,135.32, Straits Times declined 12.75 points or 0.41% to 3,059.69 and Jakarta Composite was up by 31.21 points or 0.51% to 6,080.15.

On the other side, Hang Seng gained 9.63 points or 0.04% to 25,762.01, Taiwan Weighted strengthened 42.33 points or 0.44% to 9,689.87, KOSPI rose 1.49 points or 0.07% to 2,055.28 and Shanghai Composite was up by 7.17 points or 0.28% to 2,591.75.