Benchmarks witness bloodbath in early deals

Indian equity benchmarks made a gap down start and are witnessing bloodbath with key gauges trading with cut of around a percent as traders remained on sidelines ahead of the release of India’s industrial production (IIP) and Consumer price index (CPI) data for the month of May and June respectively, on June 12. Some cautiousness also remained on the street with report that foreign institutional investors (FIIs) sold shares worth Rs 89 crore on a net basis in the cash market, while domestic institutional investors (DIIs) bought shares worth Rs 276 crore. Also, Moody's said there are risks of India missing 3.3 percent fiscal deficit target for the current financial year if tax revenue falls short of the projection. The Budget 2019-20 lowered fiscal deficit projection for the current financial year to 3.3 percent from 3.4 percent targeted in the Interim Budget 2019-20 in February.

Global cues too remained sluggish with all the Asian markets are trading in red at this point of time after a strong jobs report last Friday stateside moderated expectations that the US Federal Reserve could soon be making a move on interest rates. The US markets ended marginally in red on Friday following an unexpectedly strong US payrolls report that led investors to reassess how dovish a stance the Federal Reserve may take at its next meeting.

Back home, Cabinet Secretary P.K. Sinha has called meeting to discuss $5 trillion economy vision. Sinha has asked various departments of Finance Minsitry for a meeting to discuss the vision, policy intervention, investment and departmental responsibilities towards achieving the target of a $5 trillion economy by 2025. Non-banking finance companies (NBFCs) remained in focus with report that quickly acting on a Budget proposal to offer credit guarantee to higher-rated asset pools of financially sound non-banking finance companies, the Reserve Bank on Friday allowed banks to offer additional liquidity against their excess G-secs holdings, with immediate effect. The move will release an additional liquidity worth Rs 1.34 trillion to banks, which can be used for on-lending to shadow banking companies.

The BSE Sensex is currently trading at 39131.68, down by 381.71 points or 0.97% after trading in a range of 39052.98 and 39476.38. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index shed 1.05%, while Small cap index was down by 1.22%.

The top losing sectoral indices on the BSE were Auto down by 2.29%, Capital Goods down by 2.01%, Consumer Discretionary Goods & Services down by 1.76%, Industrials down by 1.60% and Consumer Durables was down by 1.54%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Yes Bank up by 5.39%, HCL up by 1.20%, Sun Pharma up by 0.51%, ITC up by 0.36% and Infosys up by 0.16%. On the flip side, Hero Moto down by 3.82%, Maruti Suzuki down by 2.97%, Larsen & Toubro down by 2.63%, Bajaj Auto down by 2.30% and Tata Motors - DVR down by 2.11% were the top losers.

Meanwhile, with an aim to achieve $5 trillion economy in the next few years, Finance Minister Nirmala Sitharaman has expressed the need to make structural reforms. She said the Indian economy, which stood at $1.85 trillion five years back, has reached $2.7 trillion now, and is within capacity to reach $5 trillion in the next few years.

She added that the country need to invest in infrastructure, digital economy and job creation in small and medium enterprises. To boost economy, she said the interim budget had focused on 10-point vision. In the current year, India's economy will grow to become $3 trillion economy, sixth largest in world.

She said that in terms of Purchasing Power Parity (PPP), India has become the third largest economy in the world after the US and China. The minister emphasised the need for structural reforms for achieving $5 trillion economy.

The CNX Nifty is currently trading at 11694.25, down by 116.90 points or 0.99% after trading in a range of 11673.15 and 11771.90. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 4.93%, HCL Tech. up by 1.11%, Bharti Infratel up by 1.11%, Sun Pharma up by 0.68% and ITC up by 0.39%. On the flip side, Hero Moto down by 3.67%, Larsen & Toubro down by 2.97%, Maruti Suzuki down by 2.87%, Bajaj Auto down by 2.33% and GAIL India down by 2.17% were the top losers.

All the Asian counters are trading in red; Nikkei 225 declined 192.75 points or 0.89% to 21,553.63, Straits Times shed 42.86 points or 1.27% to 3,323.95, Hang Seng declined 473.06 points or 1.64% to 28,301.77, Taiwan Weighted tumbled 58.40 points or 0.54% to 10,727.33, KOSPI decreased 36.54 points or 1.73% to 2,074.05, Jakarta Composite slipped 20.59 points or 0.32% to 6,352.89 and Shanghai Composite was down by 74.09 points or 2.46% to 2,936.97.