Bears hold tight grip on Dalal Street

Bears held their tight grip on Dalal Street in early noon session, on account of weak cues from other Asian markets. Major industry leaders like Sun Pharma, Tata Motors and Hero MotoCorp, contributed to the market losses. Domestic sentiment was pessimistic with the economic research wing of SBI stating that it is erroneous to come to a conclusion of heightened economic activity using the jump in currency in circulation (CIC). It estimated that cash in the economy at Rs 20.4 lakh crore, stressing the rural economy continues to be depressed. It pointed out to data from leading indicators, including passenger car sales, commercial vehicle sales and two wheeler sales, among others, which shows a dip in activity, to point out that the higher CIC does not suggest a jump in economic activity. The market participants failed to take any sense of relief with reports that the government has set up an inter-ministerial committee headed by the finance minister to decide on exceptions and further inclusions of left-out farmers who fail to meet the existing eligibility criteria of the PM KISAN scheme.

On the sectoral front, Auto Parts & Equipment companies stocks were trading lower, even after the rating agency ICRA said a supportive framework for electric vehicle transition was imperative and a clear roadmap on faster adoption on hybrid and electric vehicles would help auto-component industry to firm up investment plans. On the global front, Asian markets were trading in red, ahead of a meeting today between the Trump administration's top negotiators and Chinese President Xi Jinping in Beijing.

The BSE Sensex is currently trading at 35650.31, down by 225.91 points or 0.63% after trading in a range of 35578.27 and 36022.57. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.28%, while Small cap index was down by 0.63%.

The top gaining sectoral indices on the BSE were Utilities up by 1.90%, Power up by 1.77%, Oil & Gas up by 1.00%, PSU up by 0.75% and Energy up by 0.33%, while Healthcare down by 3.08%, Metal down by 1.66%, Basic Materials down by 1.62%, Auto down by 1.45% and Consumer Disc down by 1.02% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.79%, NTPC up by 3.56%, Power Grid up by 3.29%, Coal India up by 1.47% and Larsen & Toubro up by 1.21%. On the flip side, Sun Pharma down by 4.26%, Tata Motors down by 3.51%, Tata Motors - DVR down by 2.98%, Hero MotoCorp down by 2.32% and Yes Bank down by 2.31% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that a supportive framework for electric vehicle transition and incentives for taking up research and development investments was imperative. It also noted that a clear roadmap and continuation of faster adoption and manufacture of hybrid and electric vehicle scheme would help the industry firm up its own electric powertrain investment plans.

According to the report, Indian auto parts industry is expected to post revenue of 10-12 percent between FY18 and FY22, driven by higher net realisation and increased content per vehicle. It also said that average industry operating margin was expected to be around 13.5 percent to 14.5 percent over the near term.  It added that the auto-component industry grew at a compounded annual growth rate (CAGR) of about 8.3 percent during the FY14-FY18.

The rating agency further said that OEM (original equipment manufacturers) demand for components would be supported by increasing localisation by OEMs, and higher component content per vehicle. Noting that there was significant gap between auto-component makers and with their global players, the report said that as Indian emission and safety requirements tighten sharply in the coming years, this gap should gradually reduce. It pointed out that capital expenditure by auto-component industry was likely to be at 7-8 percent over the next three years compared to 4-6 percent for global majors.

The CNX Nifty is currently trading at 10663.50, down by 82.55 points or 0.77% after trading in a range of 10640.05 and 10785.75. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.29%, Power Grid up by 3.23%, NTPC up by 3.16%, BPCL up by 2.87% and Bharti Infratel up by 1.58%. On the flip side, Dr. Reddy’s Lab down by 7.70%, Sun Pharma down by 4.42%, Tata Motors down by 4.00%, JSW Steel down by 3.97% and Tech Mahindra down by 2.72% were the top losers.

All Asian markets were trading in red; Hang Seng lost 499.12 points or 1.76% to 27,932.93, Jakarta Composite dropped 21.68 points or 0.34% to 6,398.34, Nikkei 225 slipped 269.11 points or 1.27% to 20,870.60, Taiwan Weighted fell 24.23 points or 0.24% to 10,064.78, Shanghai Composite declined 16.87 points or 0.62% to 2,702.83, Straits Times trembled 12.05 points or 0.37% to 3,241.11 and KOSPI was down by 29.03 points or 1.30% to 2,196.82.