Local equities slip into red trajectory

Local equity benchmarks have erased all of their early gains and entered into red trajectory in morning deals, with losses of around quarter a percent. Traders turned cautious with former Reserve Bank of India Governor Raghuram Rajan’s statement that protectionism does not really help preserve jobs and offers little defence against the job-destroying effects of automation and Artificial Intelligence, asserting that industrial and developing nations cannot afford to ignore the democratic reaction from those left behind by globalisation and technological change. Adding to some pessimism Niti Aayog CEO Amitabh Kant’s statement India has been growing at more than 7 per cent rate and this could not have been achieved without adequate job creation. However, losses remain capped with a report that the issuance of government-fully serviced bonds (GoI-FSBs) rose to Rs 64,192 crore in the year ended March 2019 as compared to Rs 15,095 crore during the last fiscal. These borrowings are estimated to have accounted for 0.34 percent of GDP for FY19 as compared to 0.09 percent of GDP for FY18.

On the global front, Asian markets were trading mostly in red, as investors in most countries wound down going into the long Easter break, with positive comments on the China-US trade talks and healthy Chinese growth unable to fire buying activity. Back home, a report stated that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March.

The BSE Sensex is currently trading at 39182.64, down by 93.00 points or 0.24% after trading in a range of 39154.25 and 39487.45. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.93%, while Small cap index was down by 1.07%.

The only gaining sectoral indices on the BSE were Energy up by 1.33%a and Oil & Gas was up by 0.17%, while Telecom down by 2.74%, Realty down by 2.67%, Metal down by 1.68%, Basic Materials down by 1.20% and Power was down by 1.02% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 2.79%, Tata Motors up by 2.23%, Reliance Industries up by 2.19%, Asian Paints up by 0.85% and Hero MotoCorp was up by 0.44%. On the flip side, Bharti Airtel down by 3.83%, Yes Bank down by 2.89%, Vedanta down by 2.65%, Tata Steel down by 1.77% and SBI was down by 1.76% were the top losers.

Meanwhile, the World Steel Association in its latest report 'Short Range Outlook April 2019' has said India’s steel demand is likely to grow above 7 per cent in the current year (2019) as well as next year (2020). The wide range of continuing infrastructure projects may support growth in steel demand of India. The global steel body also forecasted that global steel demand may reach 1,735 million tonne (MT) in 2019, a rise of 1.3 per cent over 2018. In 2020, the demand is projected to grow 1 per cent to 1,752 MT.

It said in developed economies, steel demand grew by 1.8 per cent in 2018 following a resilient 3.1 per cent growth in 2017. The steel body is expecting demand to further decelerate to 0.3 per cent in 2019 and 0.7 per cent in 2020, reflecting a deteriorating trade environment. Steel demand in emerging economies, excluding China, is expected to grow 2.9 per cent and 4.6 per cent in 2019 and 2020, respectively.

Moreover, it mentioned in developing economies in Asia, excluding China, the demand is expected to grow by 6.5 per cent and 6.4 per cent in 2019 and 2020, respectively, making it the fastest-growing region in the global steel industry. The global association represents steel producers, including nine of the world's 10 largest firms, national and regional steel industry associations, and steel research institutes. Its members represent around 85 per cent of global steel production.

The CNX Nifty is currently trading at 11755.25, down by 31.90 points or 0.27% after trading in a range of 11738.50 and 11856.15. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.45%, Reliance Industries up by 2.32%, Wipro up by 1.44%, Tech Mahindra up by 1.15% and Asian Paints was up by 0.72%. On the flip side, Bharti Airtel down by 3.90%, Indiabulls Housing Finance down by 3.68%, Yes Bank down by 3.08%, Hindalco down by 2.49% and Vedanta was down by 2.43% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 182.06 points or 0.82% to 22,095.91, Hang Seng decreased 177.16 points or 0.59% to 29,947.52, Taiwan Weighted dropped 29.40 points or 0.27% to 10,967.86, KOSPI fell 28.58 points or 1.27% to 2,217.31 and Shanghai Composite was down by 7.45 points or 0.23% to 3,255.67. On the other hand, Straits Times advanced 0.47 points or 0.01% to 3,349.11 and Jakarta Composite was up by 39.55 points or 0.61% to 6,521.09.