Local equities extend losses in morning trade

Local equity benchmarks extended their losses in morning session, with Sensex and Nifty falling over 250 and 85 points, respectively. Traders remained concerned with a report that Elections, El Nino and oil are three key factors that may decide India’s growth trajectory in 2019. While rising oil prices and strengthening El Nino conditions will impact inflation, election-related uncertainty will weigh the most on India’s industrial production. Investors shrugged off a report that India and Peru will hold their next round of negotiations for proposed free-trade agreement (FTA), aimed at boosting two-way commerce and investments, in August. In an FTA, two trading partners significantly reduce or eliminate duties on most of the goods traded between them besides relaxing norms and rules to promote trade in services and increase bilateral investments. Traders also overlooked Union minister Suresh Prabhu’s statement that the country is working on district-based developmental model to achieve aggregate growth. He said if the national growth was at 6% and those of the districts was 4%, the aggregate growth would be 10%. Besides, a report stated that about 200 American companies are seeking to move their manufacturing base from China to India post the general elections.

On the global front, Asian markets were trading in mostly in red, amid concerns readings on China’s manufacturing and earnings at the world’s biggest phone maker. Back home, the Congress claimed agricultural growth rate had gone down from 4.2 per cent during the UPA regime to 2.5 per cent under the Narendra Modi government.

The BSE Sensex is currently trading at 38792.65, down by 274.68 points or 0.70% after trading in a range of 38753.46 and 39068.67. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped by 1.33%, while Small cap index was down by 1.47%.

The few gaining sectoral indices on the BSE were IT up by 0.55%, TECK up by 0.32% and Oil & Gas was up by 0.18%, while Realty down by 3.08%, Telecom down by 1.87%, Auto down by 1.68%, BANKEX down by 1.60% and Power was down by 1.21% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 2.10%, Asian Paints up by 1.28%, HDFC Bank up by 0.79%, Hindustan Unilever up by 0.71% and Infosys was up by 0.69%. On the flip side, Yes Bank down by 26.16%, IndusInd Bank down by 5.66%, Sun Pharma down by 2.94%, Vedanta down by 2.65% and Hero MotoCorp was down by 2.59% were the top losers.

Meanwhile, with an aim to achieve aggregate growth, the Union minister for commerce, industry and civil aviation Suresh Prabhu has said India is working on district-based developmental model. For this, six districts have been selected in different parts of the country. Prabhu said if the national growth was at six per cent and those of the districts was four per cent, the aggregate growth would be 10 per cent. All put together, this will result in rise in India’s GDP and to complement that, the private sector should bring in investments.

The Minster further stated the industry has to bring in investment as service-led growth would not be sustainable, adding that the government is ready with a new industrial policy. Moreover, He underlined the country needs to integrate with the global economy and there is no reason why India’s exports volume should not touch $540 billion. This will only happen only by integrating with the global trade.

He said the two premier institutes - the IIM Ahmedabad and the NCAER - have been approached to fix the baseline. The first phase of the project has been completed. The second phase will include industry, services and agriculture. Besides, He also called for the restoration of the trade balance with China. India’s huge trade deficit with China would have to be corrected and a Chinese minister has been invited to discuss the issue.

The CNX Nifty is currently trading at 11669.10, down by 85.55 points or 0.73% after trading in a range of 11655.90 and 11748.75. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.12%, Indian Oil Corporation up by 1.54%, Asian Paints up by 1.29%, Zee Entertainment up by 1.22% and BPCL was up by 1.05%. On the flip side, Yes Bank down by 26.12%, Indiabulls Housing Finance down by 6.29%, IndusInd Bank down by 5.83%, Bharti Infratel down by 3.57% and Sun Pharma was down by 3.04% were the top losers.

Asian markets were trading in mostly in red; Hang Seng decreased 136.71 points or 0.46% to 29,756.10, Straits Times trembled 12.75 points or 0.37% to 3,394.27, KOSPI fell 10.99 points or 0.5% to 2,205.44 and Taiwan Weighted was down by 0.03 points to 10,939.03.

On the other hand, Shanghai Composite gained 13.24 points or 0.43% to 3,075.74 and Jakarta Composite was up by 13.57 points or 0.21% to 6,439.47.