Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in afternoon session, amid negative signals from other Asian markets. Weak broader indices along with heavy sell off at Oil & Gas, Basic Materials and Utilities counters dragged the markets down. Sentiments got spoiled after India Meteorological Department’s report which showed that the onset of monsoon is likely to be delayed by a week and it is now expected to arrive only by June 8. The normal onset date for monsoon over Kerala is June 1 which also marks the official commencement of the four-month-long rainfall season. Cautiousness persisted on the street with report that the India’s services sector activity increased at the slowest pace in a year in May, as disruptions arising from the elections in the earlier part of the month hampered growth of new work intakes. The seasonally adjusted Nikkei India Services Business Activity Index fell to 50.2 in May, from 51.0 in April, pointing to the slowest growth rate in the current 12-month stretch of expansion.

On the global front, Asian markets were trading mostly in red as investors feared a looming US trade war with Mexico would further depress global growth, even as they wagered central banks would have to respond with fresh stimulus. Back on street, in scrip specific developments, shares of Dewan Housing Finance Corporation fell as Domestic rating agencies ICRA and Crisil have downgraded rating on Rs 850 crore worth of commercial paper of the company to ‘default’ from ‘A4’. Eros International tumbled and hit record low after ratings company CARE cut its long-term loan facilities ratings from 'BBB-' to 'D'.

The BSE Sensex is currently trading at 39974.66, down by 108.88 points or 0.27% after trading in a range of 39929.99 and 40159.26. There were 7 stocks advancing against 23 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 0.49%.

The few gaining sectoral indices on the BSE were Power up by 0.35%, FMCG up by 0.35%, Consumer Durables up by 0.29%, while Oil & Gas down by 2.05%, Basic Materials down by 1.43%, Utilities down by 1.27%, Capital Goods down by 0.96% and PSU was down by 0.89% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.22%, Power Grid Corporation up by 1.89%, Coal India up by 1.56%, Hindustan Unilever up by 1.46% and HCL Technologies was up by 0.54%. On the flip side, Yes Bank down by 2.09%, Indusind Bank down by 1.70%, Mahindra & Mahindra down by 1.64%, SBI down by 1.50% and Tata Motors - DVR was down by 1.17% were the top losers.

Meanwhile, economic think tank the National Council of Applied Economic Research (NCAER) in its latest survey has showed that business confidence among Indian companies dropped by 9.1 percent to reach 115.4 in Q4 (January-March) of 2018-19. NCAER tracks the business sentiments of around 600 Indian companies to calculate the composite Business Confidence Index (BCI). On a year-on-year basis, the Index slumped by 12.2 percent in financial year 2019.

The BCI is made up of four components. According to the think tank's survey, sentiments remained virtually unchanged for the component, ‘the overall economic conditions will be better in next six months’. It also said that business sentiments worsened for the remaining three components -- the 'financial position of the firms will improve in next six months', 'the present investment climate is positive' and 'the present capacity utilisation is close to or above optimal level'. It also noted that the percentage of positive responses on 'present investment climate is positive' fell from 46.7 percent at end-December 2018 to 37.5 percent at the end of last fiscal.

NCAER has said that overall, sentiments regarding production, domestic sales, expectations about exports and imports of raw materials and pre-tax profits remained muted on quarter-on-quarter basis with variations seen across firm groups. It also said that consumer non-durables sector showed relatively worsening trend with regard to production, sales and pre-tax profits between the two rounds. The situation regarding labour employment had been mixed. However, it said future expectations about labour employment were buoyant with increased expectations about rising employment across labour types.

The CNX Nifty is currently trading at 11971.60, down by 50.05 points or 0.42% after trading in a range of 11954.95 and 12039.80. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.20%, Power Grid Corporation up by 1.94%, Coal India up by 1.67%, Titan Company up by 1.54% and Hindustan Unilever was up by 1.48%. On the flip side, GAIL India down by 9.70%, Indiabulls Housing down by 5.09%, Grasim Industries down by 3.31%, Ultratech Cement down by 2.57% and Yes Bank was down by 2.06% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 25.41 points or 0.89% to 2,836.01, Hang Seng decreased 14.47 points or 0.05% to 26,880.97, Taiwan Weighted dropped 67.16 points or 0.64% to 10,394.46 and Straits Times was down by 11.56 points or 0.37% to 3,130.81. On the other hand, Nikkei 225 was up by 4.45 points or 0.02% to 20,780.55.