Local equities continue to trade in red

Local equity benchmarks are trading in the red in morning deals. Sentiment on the street weakened on a private report which stated that India could lose a vital US trade concession, under which it enjoys zero tariffs on $5.6 billion of exports to the United States, amid a widening dispute over its trade and investment policies. Investors were also on the back foot as International Monetary Fund warned Governments to gear up for a possible economic storm as growth undershoots expectations. It said, ‘The bottom-line we see an economy that is growing more slowly than we had anticipated.’ Traders ignored Commerce Secretary Anup Wadhawan’s statement that the government expressed hope that it would be able to sign a free trade agreement with the European Union (EU) in the ‘foreseeable future’. Traders also shrugged off a report that the Modi government claims to have generated over 3.79 lakh jobs between 2017 and 2019 in its various establishments, according to the interim budget for 2019-20. The government said it has generated 2,51,279 jobs in central government establishments between 2017 and 2018.

On the global front, Asian markets were trading mostly in green. Traders watched for developments on a fresh round of trade talks with the United States this week in Beijing. Back home, a group of state finance ministers (GoM) has decided to recommend a GST rate cut on all under-construction houses to 5%, from 12% at present, and slashing of GST rate to 3% from 8% on ‘affordable housing projects’.

The BSE Sensex is currently trading at 36343.90, down by 202.58 points or 0.55% after trading in a range of 36309.28 and 36588.41. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 1.25%, while Small cap index was down by 1.30%.

The only gaining sectoral indices on the BSE were IT up by 0.52% and TECK was up by 0.46% while, Capital Goods down by 2.49%, Metal down by 2.04%, Industrials down by 2.01%, Oil & Gas down by 1.67% and PSU was down by 1.55% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 0.99%, Kotak Mahindra Bank up by 0.58%, Bajaj Auto up by 0.49%, TCS up by 0.43% and HDFC Bank was up by 0.27%. On the flip side, ONGC down by 3.66%, Vedanta down by 3.41%, Mahindra & Mahindra down by 3.05%, Larsen & Toubro down by 2.87% and Tata Motors - DVR was down by 2.15% were the top losers.

Meanwhile, the Finance Ministry has sought transfer of Rs 27,380 crore from the Reserve Bank of India (RBI) retained towards risks, reserves in the previous years. In the financial years, FY17 and FY18 the RBI had retained Rs 13,190 crore and Rs 14,190 crore, respectively, towards risks and reserves. Together, retained amount is Rs 27,380 crore.

The ministry has requested the central bank to provide an interim surplus for the FY19 on the analogy of the previous financial year and transfer the amount withheld from the surplus of FY17 and FY18. The RBI, which follows July-June financial year, has already transferred Rs 40,000 crore in the current fiscal. If the central board of the RBI approves transfer of Rs 28,000 crore requested by the government as interim dividend for the current fiscal, the total surplus transfer by the central bank would be Rs 68,000 crore in FY19.

Besides, the government expects Rs 69,000 crore dividend in the next financial year. The government has projected to mobilise Rs 82,911.56 crore as dividend or surplus from the RBI, nationalised banks and financial institutions during 2019-20.

The CNX Nifty is currently trading at 10866.80, down by 76.80 points or 0.70% after trading in a range of 10857.10 and 10930.90. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.98%, Infosys up by 0.88%, TCS up by 0.66%, Wipro up by 0.60% and Eicher Motors was up by 0.44%. On the flip side, Indiabulls Housing Finance down by 5.68%, ONGC down by 3.99%, Hindalco down by 3.79%, Vedanta down by 3.60% and Dr. Reddy’s Lab was down by 3.27% were the top losers.

Asian markets were trading mostly in green, Taiwan Weighted strengthened 88.82 points or 0.89% to 10,021.08, Hang Seng increased 77.00 points or 0.28% to 28,023.32, Shanghai Composite gained 20.07 points or 0.77% to 2,638.30 and KOSPI was up by 1.02 points or 0.05% to 2,178.07.

On the other side, Jakarta Composite dropped 5.87 points or 0.09% to 6,515.79 and Straits Times was down by 17.52 points or 0.55% to 3,184.52.