Markets trade lower in early deals; Sensex slips below 39,300 mark

Indian equity benchmarks have made a cautious start and are trading with cut of around half a percent in early deals, amid mixed cues from Asian peers and rising crude oil prices. Delayed monsoon also weighed down on investors sentiment. India Meteorological Department stated that the overall monsoon deficiency in the country has reached 43 per cent due to its sluggish pace. Some cautiousness also came in with report that the continuing of high crude and gold imports pushed India’s trade deficit to a six-month high of $15.36 billion in May. Besides, India's exports grew by 3.93 per cent to $30 billion in May on account of healthy growth in sectors such as chemicals, pharmaceuticals and engineering, while imports too rose by 4.31 per cent to $45.35 billion in May. However, downside remained capped with the Reserve Bank of India’s report showing that inching closer to its historic peak, India's forex kitty increased by $1.686 billion to $423.554 billion for the week to June 7.

On the global front, Asian markets are trading mixed, as investors await a US Federal Reserve meeting set to happen later in the week stateside. Back home, on the sectoral front, housing finance companies stocks trading under pressure amid ICRA’s report that housing finance growth is set to slow down to 13-15 percent this fiscal, lower than the average of the past three years, due to the lingering liquidity issues faced by non-banking lenders. It added that there can also be an adverse impact on the outstanding housing credit, which stood at Rs 19.1 lakh crore as of March 2019. In scrip specific development, BHEL gained over one percent on bagging EPC orders worth Rs 800 crore for 200 MW solar power plants.

The BSE Sensex is currently trading at 39275.33, down by 176.74 points or 0.45% after trading in a range of 39258.33 and 39540.42. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.55%, while Small cap index was down by 0.48%.

The few gaining sectoral indices on the BSE were Telecom up by 0.12%, IT up by 0.07%, TECK up by 0.04% while, Energy down by 1.44%, Metal down by 1.40%, Oil & Gas down by 1.19%, Basic Materials down by 1.04%, Realty down by 0.85% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 1.21%, Bharti Airtel up by 0.18%, Infosys up by 0.16%, NTPC up by 0.11% and Power Grid up by 0.10%. On the flip side, Tata Motors - DVR down by 2.11%, Vedanta down by 1.83%, Tata Steel down by 1.67%, Reliance Industries down by 1.64% and Tata Motors down by 1.40% were the top losers.

Meanwhile, in response to higher tariffs imposed by Washington on Indian products like steel and aluminium, India has increased customs duties on 28 US products, including almond, pulses and walnut with effect from June 15, 2019. The move will hurt American exporters of these 28 items as they will have to pay higher duties, making those items costlier in the Indian market. Earlier, America had imposed 25% tariff on steel and a 10% import duty on aluminium products.

India extended the deadline for imposition of these duties eight times in the hope that some solution would emerge during a negotiation between India and the US on a proposed trade package. But those negotiations came to a halt following the decision of the US to withdraw export incentives to Indian exporters under its Generalised System of Preferences (GSP) programme. These benefits were rolled back from June 5. It will impact goods worth $5.5 billion from India to America.

The country has notified higher tariffs on several goods. Import duty on walnut has been hiked to 120% from 30%, duty on chickpeas, Bengal gram (chana) and masur dal will be raised to 70%, from 30% currently. Levy on lentils will be increased to 40%. The duty on boric acid and binders for foundry moulds would be hiked to 7.5%, while that on domestic reagents will be increased to 10%.

The other products on which duties will be hiked include certain kind of nuts, iron and steel products, apples, pears, flat rolled products of stainless steel, other alloy steel, tube and pipe fittings, and screws, bolts and rivets. Besides, India’s exports to the US in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favour of India.

The CNX Nifty is currently trading at 11763.50, down by 59.80 points or 0.51% after trading in a range of 11757.05 and 11844.05. There were 9 stocks advancing against 40 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Yes Bank up by 2.09%, Bharti Infratel up by 0.84%, Indiabulls Housing Finance up by 0.48%, Wipro up by 0.42% and Zee Entertainment up by 0.33%. On the flip side, JSW Steel down by 2.80%, Grasim Industries down by 1.91%, Tata Steel down by 1.89%, Reliance Industries down by 1.71% and Vedanta down by 1.65% were the top losers.

Asian markets are trading mixed; Jakarta Composite lost 15.21 points or 0.24% to 6,235.06, KOSPI fell 4.33 points or 0.21% to 2,091.08, Straits Times trembled 2.11 points or 0.07% to 3,220.52 and Shanghai Composite declined 1.45 points or 0.05% to 2,880.52. On the other hand, Nikkei 225 surged 19.32 points or 0.09% to 21,136.21, Taiwan Weighted strengthened 28.20 points or 0.27% to 10,552.87 and Hang Seng increased 179.98 points or 0.66% to 27,298.33.