Benchmarks trade lower in early noon session

Indian benchmarks were trading lower in early noon session on account of selling in front line counters in absence of any upside triggers. Selling in Tata Motors, Yes Bank and HDFC dragged the markets lower, with Sensex and Nifty losing around 0.79% and 0.81% respectively. Sentiments remained bearish as the country's services sector activity fell to a seven-month low in April owing to softer rise in new business and disruptions arising from the elections. The seasonally adjusted Nikkei India Services Business Activity Index, fell from 52 in March to 51 at the start of the 2020 financial year, pointing to the weakest upturn in output since last September. Some pessimism also spread amongst investors with report that in a first in recent history of tax filings, income tax e-filings in FY2019 have dropped. Income tax e-filings in FY 2018-19 was 6.68 crore, down from 6.74 crore in the previous fiscal. This is surprising given that post demonetisation it was expected that the tax base would continue to increase. Meanwhile, in a significant move, the government is readying a scheme to provide financial assistance to minority investors filing class action lawsuits under the companies’ law. Working on ways to further bolster measures to protect the interest of investors, the corporate affairs ministry would also be encouraging investors to resort to class action suits.

On the global front, Asian markets were trading in red, after President Donald Trump threatened to impose more tariffs on China, spooking investors who had been expecting good news this week on trade. Back on street, on scrip specific development, Yes Bank falls as the Reserve Bank of India has imposed a penalty of Rs 11.25 lakh on it for violating money transfer norms. ICRA has downgraded the bank’s long term rating to AA- from AA. Meanwhile, LIC Housing Finance edged up on reporting rise of 16.70% in its net profit at Rs 693.58 crore for the quarter under review as compared to Rs 594.34 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 38653.73, down by 309.53 points or 0.79% after trading in a range of 38509.79 and 38719.33. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.55%, while Small cap index was down by 0.40%.

The few gaining sectoral indices on the BSE were Oil & Gas up by 0.33%, IT up by 0.15% and TECK was up by 0.04%, while Metal down by 1.88%, Consumer Durables down by 1.45%, Auto down by 1.21%, Basic Materials down by 1.14% and Consumer Discretionary was down by 0.86% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.10%, Power Grid Corporation up by 0.29%, Larsen & Toubro up by 0.11% and ONGC was up by 0.09%. On the flip side, Tata Motors down by 4.18%, Tata Motors - DVR down by 3.74%, Yes Bank down by 3.62%, HDFC down by 2.04% and Hindustan Unilever was down by 1.60% were the top losers.

Meanwhile, in a bid to spur economic growth in developing member countries (DMCs), Economic Affairs Secretary Subhash Chandra Garg has stressed on channeling pension and sovereign wealth funds of advanced countries to emerging markets with the assistance of Asian Development Bank (ADB). He also said that innovation in financing will be the key to success of long-term growth strategy.

Garg said “if we can, with ADB assisting, ensure flow of funds from advanced economies to the emerging market and developing economies, we would succeed in not only keeping global growth sustained high but also make significant dent on poverty and infrastructure services debt.” He also emphasized that it is in emerging markets and developing economies where consumption is rising and more investment can and should be made there. On the other hand, he said, due to several factors, advanced economies are seeing stagnant consumption and they have much larger savings pools in pensions, insurance and sovereign wealth funds than their investment requirement.

Talking about the Indian economy, the Secretary said India has witnessed a robust growth of 7.5 percent on an average in the previous five years and has become world's fastest growing economy. He pointed out that this momentum in growth has been combined with efforts in containing inflation to an average 4.6 percent, and reducing the fiscal deficit to 3.4 percent in 2018-19. He also said India has managed to contain the debt-to-GDP ratio at 46.5 percent in year 2017-18. He added that at the same time, public investments, development initiatives and poverty alleviation programs have been further expanded.

The CNX Nifty is currently trading at 11617.35, down by 94.90 points or 0.81% after trading in a range of 11585.10 and 11629.80. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.13%, TCS up by 1.11%, Indian Oil Corporation up by 0.99%, Tech Mahindra up by 0.80% and Dr. Reddys Lab was up by 0.38%. On the flip side, Tata Motors down by 4.20%, Yes Bank down by 4.01%, JSW Steel down by 3.45%, Titan down by 2.85% and UPL was down by 2.81% were the top losers.

Asian markets were trading in red; Jakarta Composite dropped 72.48 points or 1.15% to 6,246.98, Straits Times trembled 106.08 points or 3.13% to 3,286.21, Shanghai Composite declined 171.86 points or 5.58% to 2,906.48, Taiwan Weighted dropped 203.72 points or 1.84% to 10,892.58 and Hang Seng was down by 932.30 points or 3.1% to 29,149.25.