Indian equities add losses amid weak global cues

Adding losses, Indian equity benchmarks continued to trade lower in afternoon session, tracking subdued Asian markets amid increased tensions ahead of key China-US trade negotiations. Sentiment on the street weakened 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. Investors' remained concerned with a report that the Reserve Bank warned of the rising risks to fiscal consolidation of the states as their finances are saddled with farm loan waivers, income support schemes and the Uday bonds for their power distribution companies. The rupee has also come under pressure, falling 25 paise to 69.96 against US dollar in early trade at the forex market. On the sectoral front, stocks related to Telecom sector edged lower despite industry body COAI stating that stability and rationality may to return to the telecom market by the fourth quarter of 2019-20, as mobile operators move beyond hyper-competitive pricing into tapping new, value-added avenues of revenue to bolster topline and profit.

On the global front, All Asian markets were trading in red, as investors anxiously await the start of high-stakes trade talks between China and the United States. Back home, the BSE Sensex is currently trading at 37598.93, down by 190.20 points or 0.50% after trading in a range of 37564.87 and 37780.46. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.20%, while Small cap index down by 0.23%.

The top gaining sectoral indices on the BSE were Realty up by 0.65%, TECK up by 0.53%, IT up by 0.45%, Consumer Durables up by 0.31% and Consumer Discretionary Goods & Services was up by 0.08%, while Energy down by 2.09%, Power down by 1.40%, Utilities down by 0.95%, Oil & Gas down by 0.89% and Healthcare was down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 4.70%, Hero MotoCorp up by 1.29%, Tata Motors up by 1.05%, Bajaj Finance up by 0.97% and Infosys was by 0.81%. On the flip side, NTPC down by 3.13%, Reliance Industries down by 2.81%, HCL Tech. down by 1.36%, Coal India down by 1.25% and Sun Pharma was by 1.09% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has warned of the growing risks to fiscal consolidation of the states as their finances are saddled with farm loan waivers, income support schemes and the Ujwal Discom Assurance Yojana (UDAY) bonds for their power distribution companies. The remarks were made during a meeting between the members of the 15th Finance Commission and the RBI brass, including governor Shaktikanta Das and the deputy governors.

RBI stressed the importance of states has increased with the shift in composition of government finances. It also noted that the outstanding debt as percentage of Gross Domestic Product (GDP) has been rising despite moderation in interest payment as percentage of revenue receipts. It further discussed ways of increasing orientation of state government borrowing to markets, improving secondary market liquidity, risk asymmetry and increasing the corpus of Consolidated Sinking Fund and Guarantee Redemption Fund.

Other key issues raised by RBI included necessity of setting up state finance commissions, public sector borrowings and continuity of finance commission. It also discussed about cash management wherein the states need to improve their cash forecasting capabilities.

The CNX Nifty is currently trading at 11305.60, down by 53.85 points or 0.47% after trading in a range of 11290.90 and 11357.60. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 6.76%, Yes Bank up by 4.79%, Indiabulls Housing Finance up by 1.76%, Hero MotoCorp up by 1.47% and Tata Motors was up by 1.32%. On the flip side, NTPC down by 3.06%, Reliance Industries down by 2.80%, BPCL down by 2.05%, Coal India down by 1.51% and Bharti Infratel was down by 1.50% were the top losers.

All Asian markets were trading in red; Straits Times decreased 14.56 points or 0.44% to 3,269.28, Hang Seng declined 651.83 points or 2.25% to 28,351.37, Taiwan Weighted slipped 190.04 points or 1.74% to 10,733.67, Jakarta Composite fell 46.54 points or 0.74% to 6,223.66, Shanghai Composite decreased 41.37 points or 1.43% to 2,852.39, Nikkei 225 tumbled 200.46 points or 0.93% to 21,402.13 and KOSPI was down by 66.00 points or 3.04% to 2,102.01.