Weak trade continues on Dalal Street

Indian equity benchmarks continued their weak trade in afternoon deals, as investors awaited RBI's monetary policy decision, amid weak cues from global markets. The mood of the markets remain dampened with a private report that the pre-monsoon rainfall in the country was the second lowest in 65 years. The three-month pre-monsoon season March, April and May ended with a rainfall deficiency of 25%. As per the report, all the four meteorological divisions - Northwest India, Central India, East-Northeast India and South Peninsula - recorded deficit rainfall of 30%, 18%, 14% and 47%, respectively. Traders also took note of the Confederation of Indian Industry’s (CII) statement that India would need over $1 trillion investments every year for the next five years if annual GDP growth is to reach 10 per cent. On the sectoral front, the power sector stocks remained in focus with global ratings agency Moody's Investors Service’s statement that the increasing share of renewables in the total energy mix of the country may lead to an increase in regulatory risk for coal-based projects in the long term.

On the global front, Asian markets were trading mostly in red, as global trade tensions continued and suggestions of a Federal Reserve interest-rate cut percolated. Back home, the BSE Sensex is currently trading at 40116.50, down by 151.12 points or 0.38% after trading in a range of 40086.47 and 40312.07. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Power up by 0.45%, Utilities up by 0.44%, Capital Goods up by 0.41%, Realty up by 0.31% and Metal was up by 0.23%, while IT down by 1.19%, TECK down by 1.10%, Healthcare down by 0.74%, Basic Materials down by 0.53% and Oil & Gas was down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.14%, Yes Bank up by 1.34%, Vedanta up by 0.82%, Bajaj Finance up by 0.71% and Coal India was up by 0.61%. On the flip side, Asian Paints down by 2.57%, Hero MotoCorp down by 2.45%, TCS down by 1.93%, HCL Technologies down by 1.91% and Bajaj Auto was down by 1.60% were the top losers.

Meanwhile, India Inc has pitched for a series of reforms in the areas of land, labour and capital, to take the Indian economy to double-digit growth in the next five years. To target Gross Domestic Product (GDP) growing up to 10 percent by 2023-24, Confederation of Indian Industry (CII) President Vikarm Kirloskar has said that the total investment requirement is estimated at $5.74 trillion (around Rs 397 lakh crore) for the next five years. Of this, he said the total investment required for infrastructure sector is estimated at $1.18 trillion (around Rs 81.72 lakh crore) for the next five years, while for non-infrastructure including agriculture and industry to be $4.56 trillion (around Rs 315 lakh crore). 

CII President has stated that the private sector is facing difficulty in getting land for manufacturing units and the states have a huge role to play and there is a need to create land banks. On labour reforms, he suggested for the formulation of national employment policy and encourage states to provide fixed-term employment besides incentivising companies for creating employment. Besides, he said the government needs to bring in Direct Taxes Code (DTC) and the last leg of reforms in the GST.

According to Kirloskar, strong action to spur consumption, investments and net exports will take GDP growth rates much higher and this is the right time for India to think big and envision GDP growth rate of 10 percent to greatly improve development outcomes. With GDP growth slowed to a five-year low of 5.8 percent in January-March quarter of 2018-19, he emphasized four key drivers for reinvigorating the growth rate - boosting consumption, investments, public expenditure on social and physical infrastructure and net exports.

The CNX Nifty is currently trading at 12031.85, down by 56.70 points or 0.47% after trading in a range of 12024.75 and 12095.20. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.95%, Wipro up by 1.22%, Yes Bank up by 1.07%, Bharti Infratel up by 1.00% and Vedanta was up by 0.76%. On the flip side, Asian Paints down by 2.77%, Hero MotoCorp down by 2.54%, HCL Technologies down by 2.42%, Dr. Reddys Lab down by 2.32% and TCS was down by 2.14% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 165.06 points or 0.61% to 26,728.80, Taiwan Weighted dropped 70.95 points or 0.68% to 10,429.12, Nikkei 225 slipped 2.34 points or 0.01% to 20,408.54, Shanghai Composite declined 34.69 points or 1.2% to 2,855.39 and KOSPI was down by 0.88 points or 0.04% to 2,066.97.

On the flip side, Straits Times was up by 7.89 points or 0.25% to 3,131.35.