Local equities continue cautious trade

Local equities continued to trade with caution in the morning session, with frontline gauges trading tad below their neutral lines owing to some selling pressure in frontline blue-chip counters. IndusInd Bank, ICICI Bank and Vedanta were the prime losers among heavy-weights, pushing the Sensex lower. Some pessimism spread among the investors with a report that monsoon rainfall was 21% below normal during the week ended June 27, that resulted in the season’s overall deficiency to narrow down to 35%. Some cautiousness also came with a report that Governor Shaktikanta Das has called for more cooperation between the government and the Reserve Bank to help boost the sagging growth engine and to ensure systemic stability. A dip in consumption and private investment has exerted pressure on the fiscal math. Traders took note of Swiss National Bank’s data which showed that money parked by Indian individuals and enterprises in Swiss banks, including through India-based branches, fell by nearly 6 per cent in 2018 to 955 million Swiss francs to hit its second-lowest level in over two decades. However, losses remain capped with Prime Minister Narendra Modi’s statement that the bilateral strategic ties between India and Japan will become more robust as India aims to be a $5 trillion economy in the next five years. Some support came with Reserve Bank’s report that the non-performing assets has ‘turned around’ with a sharp fall in the system-wide NPAs to 9.3 percent in March 2019 from 11.2 percent a year ago.

On the global front, Asian markets were trading red as investors watched for developments from the G-20 summit in Osaka, Japan, where US President Donald Trump and Chinese President Xi Jinping are expected to meet amid the ongoing trade standoff. Back home, Union Minister Piyush Goyal stated that Ministries of commerce, road, civil aviation and railways should work in coordination with an aim to cut the logistics cost to 9 per cent of GDP from the current 14 per cent. The commerce and industry minister made the remark while reviewing the draft National Logistics Policy and the proposed action plan for its implementation.

The BSE Sensex is currently trading at 39551.81, down by 34.60 points or 0.09% after trading in a range of 39522.71 and 39675.25. There were 14 stocks advancing against 17 stocks declining on the index.

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

The top gaining sectoral indices on the BSE were Healthcare up by 0.74%, Capital Goods up by 0.71%, PSU up by 0.51%, Industrials up by 0.49% and Utilities was up by 0.46%, while Telecom down by 0.82%, Metal down by 0.78%, BANKEX down by 0.42%, Basic Materials down by 0.36% and Energy was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.56%, Larsen & Toubro up by 1.03%, Sun Pharma up by 0.89%, Infosys up by 0.70% and Power Grid was up by 0.65%. On the flip side, IndusInd Bank down by 1.20%, ICICI Bank down by 1.08%, Tata Steel down by 1.04%, Vedanta down by 0.82% and Bajaj Auto was down by 0.77% were the top losers.

Meanwhile, The rating agency ICRA in its latest report stated that the demand for cement has been tepid in the first quarter of the current financial year (Q1FY20) due to slowing of the project execution on account of general elections. However, it expects the demand to pick up from the third quarter of the fiscal, post-monsoon season and expects it to increase by nearly 7 per cent during for FY20.

It also said the growth is likely to be driven by housing, primarily rural housing and affordable housing, and improved focus on infrastructure segments, mainly road, railway and irrigation projects. Talking about profitability, it noted that in Q1FY20, the higher cement prices and lower costs power and fuel and freight expenses are likely to result in margin recovery.

It further said that in Q2FY20, the consumption is expected to be on lower side owing to the monsoon season. In April this year, cement production stood at 28.7 million MT, which was lower by 13.3 per cent as compared to March 2019.

The CNX Nifty is currently trading at 11833.10, down by 8.45 points or 0.07% after trading in a range of 11825.70 and 11871.70. There were 23 stocks advancing against 26 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tech Mahindra up by 1.46%, Dr. Reddys Lab up by 1.28%, Sun Pharma up by 1.27%, Larsen & Toubro up by 1.06% and Adani Ports was up by 0.97%. On the flip side, Bharti Infratel down by 2.06%, Zee Entertainment down by 1.57%, IndusInd Bank down by 1.21%, Tata Steel down by 1.12% and Indiabulls Housing down by 1.06% were the top losers.

All Asian markets were trading red; Nikkei 225 slipped 103.27 points or 0.48% to 21,234.90, Taiwan Weighted dropped 38.35 points or 0.36% to 10,735.55, Hang Seng decreased 162.03 points or 0.57% to 28,459.39, Straits Times trembled 4.51 points or 0.14% to 3,324.09, Shanghai Composite declined 26.37 points or 0.88% to 2,970.42, KOSPI fell 4.26 points or 0.2% to 2,130.06 and Jakarta Composite was down 0.52 points or 0.01% to 6,352.19.