Local equities continue weak trade in morning session

Local equity benchmarks continued their weak trade in the morning session, breaching their crucial 35,950 (Sensex) and 10,800 (Nifty) levels. Yes Bank, Vedanta and NTPC were the prime losers among heavy-weights, pushing the Sensex lower. Investors remained jittery with Bibek Debroy, the head of Prime Minister’s economic advisory panel, stating that India lacks good data on economy and jobs as it is majorly an informal economy, while a report claimed big buoyancy in employment numbers under Narendra Modi-led government. He said it is difficult to draw an inference as to what is happening on labour and employment on the basis of data gathered from the enterprises for the very simple reason that very few individuals in India work. Traders also remained on sidelines as a private report stated that India isn’t seeing any investment gains as global trade tensions disrupt supply chains. Foreign direct investment (FDI) in the third-largest Asian economy fell 7% in the nine months to December, signaling slowing investment before upcoming elections. Traders paid no heed to payroll data of the Employees State Insurance Corporation (ESIC) which showed that nearly 2 crore jobs were created in 16 months to December 2018. During September 2017 and December 2018, as many as 1.96 crore new subscribers joined the scheme.

On the global front, Asian markets were trading mostly in red, as investors struggled to maintain momentum from the previous day's trade talks-fuelled surge, while the pound extended gains following reports of a possible Brexit delay. Back home, a private report state that Banks’ lending rates and bond yields began to converge in December 2018 in a seeming reversal of a months-long trend of bank loans being cheaper than market borrowings.

The BSE Sensex is currently trading at 35900.79, down by 312.59 points or 0.86% after trading in a range of 35714.16 and 36054.00. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 1.20%, while Small cap index was down by 1.52%.

The top losing sectoral indices on the BSE were Realty down by 2.54%, Utilities down by 1.72%, Metal down by 1.60%, PSU down by 1.44% and Power was down by 1.43%, while there were no gainers on the sectoral front.

The top gainers on the Sensex were TCS up by 1.76%, Tata Motors up by 1.40%, Hindustan Unilever up by 0.57% and Coal India was up by 0.30%. On the flip side, Yes Bank down by 2.64%, Vedanta down by 2.54%, NTPC down by 2.28%, ICICI Bank down by 1.87% and SBI was down by 1.83% were the top losers.

Meanwhile, ICRA, a credit rating agency, in its latest report has said India Inc witnessed a dip in both revenue growth as well as margins in third quarter of current financial year (Q3FY19) as compared to the preceding quarter (Q2). However, when compared to the same period a year-ago, revenue growth has come in at a handsome pace, but margins crimped.

The margins got narrowed in the third quarter on account of a rise in energy and raw material costs as well as the adverse impact of rupee fall. Airlines, cement and building materials (tiles and glass) reported a decline in margins because of sharp increase in fuel prices, while automobile OEMs, consumer durables, paints and media (news print) also saw margin contraction because of rising input costs.

The report mentioned that the analysis is based on the aggregate numbers reported by 648 listed companies, which showed a revenue growth of 17.3% in Q3 down from 19.4% in the preceding three months and 9.8% in the year-ago period. It further stated that the operating margins came in at 16.4% as against 16.6% in the quarter-ago period and the 17.1% in the year-ago period.

The CNX Nifty is currently trading at 10786.90, down by 93.20 points or 0.86% after trading in a range of 10729.30 and 10837.15. There were 7 stocks advancing against 42 stocks declining, while 1 remain unchanged on the index.

The top gainers on Nifty were TCS up by 1.71%, Tata Motors up by 1.45%, Bajaj Finserv up by 0.91%, Hindustan Unilever up by 0.43% and Ultratech Cement was up by 0.35%. On the flip side, JSW Steel down by 2.52%, Yes Bank down by 2.51%, Vedanta down by 2.39%, Indiabulls Housing Finance down by 2.35% and Hindalco was down by 2.32% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 132.57 points or 0.46% to 28,826.73, Nikkei 225 slipped 73.49 points or 0.34% to 21,454.74, Jakarta Composite dropped 13.02 points or 0.2% to 6,512.34, Taiwan Weighted dropped 11.14 points or 0.11% to 10,379.79, Straits Times trembled 7.44 points or 0.23% to 3,264.91 and KOSPI fell 7.43 points or 0.33% to 2,225.13. On the other flip, Shanghai Composite was up by 12.43 points or 0.42% to 2,973.71.