Local equities magnify losses in morning deals

Local equity markets have magnified their losses in morning deals, with frontline gauges trading below their neutral lines owing to selling pressure in frontline counters. Vedanta, NTPC and HDFC were the prime losers among heavy-weights, pushing the Sensex 0.65% lower. Traders took note of World Bank’s report stating that despite making a remarkable progress in electricity distribution over the years, India still faces challenges to meet its growing demand for power and reliable supply still remains low in the country. Market participants remained concerned with NBER’s report that the November 2016 demonetisation impacted economic activity in the country in the immediate aftermath, affecting the Gross Domestic Product (GDP) numbers for that fiscal, while the measure's impact had dissipated by the summer of the following year. However, investors overlooked a report that NITI Aayog unveiled a strategy document with an aim to accelerate economic growth to 8% and catapult the country to a $5-trillion economy by 2030. Besides, a private report also stated that Britain risks slipping from being the world’s fifth-biggest economy to its seventh-largest next year, when it is due to leave the European Union, with France and India on course to overtake it.

On the global front, Asian markets were trading in red, after the Federal Reserve stepped back from a more aggressive policy tightening path even as it gave markets the distinct impression of being much less cautious than they had anticipated. Back home, on the sectoral front, PSU Banking stock were on the side lines, despite Economic Affairs Secretary Subhash Chandra Garg stated that the government is likely to make additional capital infusion in the public sector banks. This will be over and above Rs 1.35 lakh crore capital infusion announced by the government for the public sector banks (PSBs) in October last year to meet global capital risk norms called Basel III.

The BSE Sensex is currently trading at 36247.58, down by 236.75 points or 0.65% after trading in a range of 36202.90 and 36383.20. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.04%, while Small cap index was up by 0.10%.

The only gaining sectoral indices on the BSE were Healthcare up by 0.03% and Consumer Durables was up by 0.01%, while Metal down by 1.46%, Utilities down by 1.15%, Power down by 1.15%, Telecom down by 1.03% and Energy was down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.73%, Asian Paints up by 1.21%, Mahindra & Mahindra up by 0.58%, IndusInd Bank up by 0.20% and Sun Pharma was up by 0.12%. On the flip side, Vedanta down by 2.25%, NTPC down by 1.94%, HDFC down by 1.53%, Bharti Airtel down by 1.44% and Adani Ports was down by 1.34% were the top losers.

Meanwhile, World Bank in its latest report has said that India lost a staggering $86.1 billion, equivalent to over 4 percent of its Gross Domestic Product (GDP), on account of distortions in the power sector in 2016. The report titled 'In the Dark: How much do power sector distortions cost South Asia?' highlighted that India achieved 100 percent village electrification in 2018. But, at the household level, its rural access rate, at 81 percent in 2017, is still the third-lowest in South Asia.

It estimated the downstream impact of power shortages on rural households and firms at 1.42 percent of the GDP per year and the second largest economic cost for the country. The report pointed out that the government should look to ensure steady power supply to households for its electrification programme to be truly successful. Although the power deficit in the country has been substantially reduced over the last few years, the reliability of electricity is still low compared with global standards.

Te 2018 Global Competitiveness Report ranks India 80th among 137 countries in the reliability of electricity supply. Using nightly satellite images from India for 2013, the World Bank study found that areas adjacent to newly electrified villages subsequently experienced worse power outages. As per report, among the major distortions in the sector is the lack of commercial mining in coal, a near monopoly on which is enjoyed by state-run Coal India, and which fuels over 70 percent of the country's power generation. It stated the lack of competition has bred major inefficiency in India's coal mining.

The CNX Nifty is currently trading at 10887.00, down by 80.30 points or 0.73% after trading in a range of 10880.05 and 10935.70. There were 11 stocks advancing against 38 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Yes Bank up by 2.56%, Indiabulls Housing Finance up by 2.16%, Asian Paints up by 1.23%, Tech Mahindra up by 0.49% and Ultratech Cement was up by 0.38%. On the flip side, Hindalco down by 2.62%, Vedanta down by 2.44%, Bharti Airtel down by 2.26%, NTPC down by 1.90% and HDFC was down by 1.88% were the top losers.

Asian markets were trading in red; Jakarta Composite dropped 52.99 points or 0.86% to 6,123.10, Hang Seng decreased 380.71 points or 1.47% to 25,484.68, Taiwan Weighted dropped 118.62 points or 1.21% to 9,664.59, KOSPI fell 27.69 points or 1.33% to 2,051.15, Straits Times trembled 1.39 points or 0.05% to 3,057.26, Shanghai Composite declined 20.83 points or 0.82% to 2,528.73 and Nikkei 225 was down by 632.58 points or 3.01% to 20,355.34.