Benchmarks trade cautious in early deals; Sensex slips below 35,600 mark

Indian markets made a cautious start and are trading with cut of over half a percent in early deals on sluggish global cues, as traders remain concerned with the report that the Reserve Bank of India (RBI) has warned that income support schemes and farm loan waivers would lead to fiscal slippages for the states. The RBI listed out specific factors that would drive fiscal slippages in the revised estimates of 2018-19, including farm loan waivers and income support schemes. Some cautiousness also came with former Finance Minister P Chidambaram’s statement that macroeconomic indicators confirm that the Indian economy has entered a disastrous phase of slowdown. He further added the Finance Ministry's report is a damning indictment of the state of the economy in the country. Further, sentiments remained down-beat with a private report stating that the Indian economy is running the risk of a structural crisis, and could soon be ensnared in a 'middle-income trap', eventually becoming like Brazil or South Africa.

On the global Front, Asian markets are trading in red as traders remained cautious with ahead of the next round of US-China trade talks in Washington this week. While speaking at a rally in Florida, US President Donald Trump said that China 'broke the deal' in the trade talks and so ‘they will be paying’. Back home, stock specifics Coal India rises despite its coal allocation under spot e-auction scheme falls by 38% in FY19 and DHFL soars on getting nod from NHB to sell entire stake of Aadhar Housing Finance.

The BSE Sensex is currently trading at 37579.15, down by 209.98 points or 0.56% after trading in a range of 37564.87 and 37747.91. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index shed 0.75%, while Small cap index was down by 0.51%.

The top gaining sectoral indices on the BSE were TECK up by 0.42%, IT up by 0.32%, Consumer Durables up by 0.19%, Telecom up by 0.04% and Realty was up by 0.01%, while Energy down by 1.83%, Oil & Gas down by 1.17%, Power down by 1.08%, Healthcare down by 0.93% and Utilities was down by 0.90% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 0.86%, Hero MotoCorp up by 0.56%, Bharti Airtel up by 0.54%, SBI up by 0.30% and Larsen & Toubro was up by 0.29%. On the flip side, Reliance Industries down by 2.47%, NTPC down by 1.56%, HCL Technologies down by 1.08%, Yes Bank down by 1.00% and Power Grid Corporation was down by 0.95% were the top losers.

Meanwhile, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Ramesh Abhishek has said India is hoping to further improve its rank in World Bank’s Doing Business report this year especially in indicators of paying taxes, insolvency resolution, trading across borders, issue of building permits and starting a business.  Improving ranking helps a country to provide a better investment climate for investors. The next report is expected to be released in October 2019. India improved its ranking by 23 places to the 77th position in the 2018 report. India is aiming to improve its ranking to the top 50th in the coming years.

The World Bank in its annual Doing Business report ranks nations based on 10 parameters relating to starting and doing business in a country. These parameters include ease of starting a business, construction permits, getting electricity, getting credit, paying taxes, trade across borders, enforcing contracts and resolving insolvency.

The government's initiatives such as relaxed norms for company incorporation and removing the requirement of a bank account for GST registration may help India further improve its ranking.  Other steps, which the government has taken, include clubbing of several forms into one; elimination of fee for incorporation of companies where authorised capital is up to Rs 15 lakh, removal of company seal or rubber stamp and combined registration for EPFO (Employees' Provident Fund Organisation) and Employees' State Insurance Corporation (ESIC).

The CNX Nifty is currently trading at 11297.75, down by 61.70 points or 0.54% after trading in a range of 11290.90 and 11324.40. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 4.51%, Indiabulls Housing up by 0.91%, Infosys up by 0.79%, Britannia Industries up by 0.75% and Hero MotoCorp was up by 0.74%. On the flip side, Reliance Industries down by 2.53%, BPCL down by 2.50%, Power Grid Corporation down by 1.63%, NTPC down by 1.57% and UPL was down by 1.52% were the top losers.

Asian markets are trading in red; Straits Times decreased 14.52 points or 0.44% to 3,269.32, Hang Seng declined 565.56 points or 1.95% to 28,437.64, Taiwan Weighted slipped 154.28 points or 1.41% to 10,769.43, Jakarta Composite fell 39.39 points or 0.63% to 6,230.81 and Shanghai Composite decreased 39.05 points or 1.35 % to 2,854.71, Nikkei 225 tumbled 222.25 points or 1.03% to 21,380.34 and KOSPI was down by 37.25 points or 1.72% to 2,130.76.