Bourses remain volatile during late afternoon deals

Indian equity bourses remained volatile during late afternoon deals, despite firm cues from European markets. Trading sentiments remained dampened with Industry chamber, Confederation of Indian Industry’s (CII) statement that the US decision to withdraw export incentives from India has been taken in a haste and would hurt the domestic exporters. CII President Vikram Kirloskar expressed hope that both the US and India would discuss the matter and find an amicable solution to this issue. The street was also pessimistic with a private report stating 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.

On the global front, European markets were trading in green, after the euro area unemployment rate dropped to the lowest since 2008 in April. The figures from Eurostat showed that the unemployment rate came in at 7.6 percent versus 7.7 percent in March. This was the lowest rate seen since August 2008. The rate was expected to remain unchanged at 7.7 percent. However, Asian markets were trading in red, as South Korea's gross domestic product was down 0.4 percent on quarter in the first three months of 2019. As per the Bank of Korea preliminary reading report, that's down from the 0.3 percent decline suggested in last month's advance estimate and it follows the 0.9 percent increase in the fourth quarter of 2018.

Back home, stocks related to textile industry were in focus, as the Cotton Association of India retained its cotton production estimate at 315 lakh bales in its latest forecast for the 2018-19 season. In the last cotton season, total output stood at 365 lakh bales. The cotton season runs from October to September. 

The BSE Sensex is currently trading at 40144.40, down by 123.22 points or 0.31% after trading in a range of 40068.58 and 40312.07. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.10%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.51%, Utilities up by 0.41%, Realty up by 0.27%, Telecom up by 0.25% and Industrials up by 0.24%, while IT down by 1.28%, TECK down by 1.20%, Healthcare down by 0.92%, Basic Materials down by 0.77% and Oil & Gas down by 0.60% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.80%, Yes Bank up by 1.71%, Vedanta up by 1.46%, Axis Bank up by 1.19% and Tata Motors - DVR up by 1.12%. On the flip side, Hero MotoCorp down by 3.16%, Asian Paints down by 2.60%, TCS down by 2.07%, HCL Tech. down by 2.00% and Bajaj Auto down by 1.76% were the top losers.

Meanwhile, expressing optimism over Indian economic growth, IHS Markit in its latest report has said India is likely to overtake the UK to become the world's fifth largest economy this year and added that by 2025, Indian GDP is also forecast to surpass Japan, which will make India the second-largest economy in the Asia-Pacific region.

The report said that the economic outlook looks positive for the second term of Modi government, with GDP growth forecast to average around 7% per year over the 2019-2023 period. IHS Markit is also expecting increase in India’s contribution to global GDP growth momentum. Besides, it highlighted that India will also play an increasingly important role as one of the Asia-Pacific region's major economic growth engines, helping to drive Asian regional trade and investment flows.

Further, IHS said that in Modi's second term of office, India will continue to confront significant economic challenges. A key policy priority for the Indian government will be to continue to drive reforms in the public sector banks and reduce the burden of non-performing (or bad) loans on their balance sheets.

The CNX Nifty is currently trading at 12039.70, down by 48.85 points or 0.40% after trading in a range of 12018.50 and 12095.20. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 1.77%, Bharti Infratel up by 1.69%, NTPC up by 1.62%, Axis Bank up by 1.48% and Vedanta up by 1.37%. On the flip side, Zee Entertainment down by 3.46%, Hero MotoCorp down by 2.99%, Asian Paints down by 2.75%, HCL Tech. down by 2.28% and Indian Oil Corporation down by 2.27% 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.

All European markets were trading in green; UK’s FTSE 100 gained 17.13 points or 0.24% to 7,201.93, France’s CAC surged 8.56 points or 0.16% to 5,250.02 and Germany’s DAX was up by 103.58 points or 0.88% to 11,896.39.