Markets continue to trade in deep red

Indian bourses continued to trade in red in the early noon session, with the Sensex losing over 600 points and Nifty falling below the 11650 level, tracking weak cues from other Asian markets. Profit booking in frontline blue chip stocks such as Bajaj Finance, ONGC, Hero MotoCorp and SBI pulled the markets lower. PSU, Capital Goods and Realty stocks were amongst the top losers on the BSE sectoral space. Sentiments got undermined with a report that area sown under kharif crops was down by 27% at 234.33 lakh hectare amid deficient monsoon rainfall last month. The mood on the street remained cautious as India Meteorological Department data showed that monsoon has covered almost the entire country, but three-fourths of MeT department’s sub-meteorological divisions still fall under the ‘deficient’ rainfall category. Market further cooled off with report that foreign institutional investors (FIIs) sold shares worth Rs 89 crore on a net basis in the cash market. Traders’ took note of S&P Global Ratings report stating that the proposed Rs 70,000-crore capital infusion into public sector banks (PSBs) will provide a timely booster to lenders. The move, announced in the Budget, is likely to be credit positive for the banking sector and the economy.

On the global front, Asian markets were trading in red after relatively strong US employment data tempered hopes the Federal Reserve might cut interest rates. Back on street, in scrip specific developments, shares of Punjab National Bank edged lower as the bank has reported a fraud of more than Rs 3,800 crore by Bhushan Power & Steel (BPSL) to the Reserve Bank of India (RBI). Meanwhile, Quick Heal Technologies surged on getting patent for Anti-Ransomware technology from USPTO.

The BSE Sensex is currently trading at 38878.94, down by 634.45 points or 1.61% after trading in a range of 38848.54 and 39476.38. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.75%, while Small cap index was down by 2.37%.

The top losing sectoral indices on the BSE were PSU down by 3.64%, Capital Goods down by 3.34%, Realty down by 3.23%, Industrials down by 2.87% and Oil & Gas was down by 2.71%, while there were no gainers on the BSE sectoral front.

The few gainers on the Sensex were Yes Bank up by 5.44%, HCL Technologies up by 2.18%, TCS up by 0.65% and Tech Mahindra was up by 0.15%. On the flip side, Bajaj Finance down by 6.27%, ONGC down by 4.71%, Hero MotoCorp down by 4.65%, SBI down by 4.01% and NTPC was down by 3.99% were the top losers.

Meanwhile, Finance Secretary Subhash Chandra Garg has said that the government will soon initiate the process of gross borrowing programme from external markets in foreign currencies in the second half of current fiscal (H2FY20), in a move that will ease pressure on local markets. He said the government will soon appoint advisers to suggest modalities for raising funds from overseas markets.

Garg said “one needs to determine the maximum amount in a year the government should be raising in the foreign currency, which foreign currency will be more stable...adviser will help us in deciding all these things soon.” He also said “we will try to do the first issue within this fiscal... My sense is at the time of second half calendar towards last week of September if we are in position to provide the roadmap, we should be providing that.'

Overseas borrowing will be part of the overall borrowing programme of the government. The Centre will borrow Rs 4.48 lakh crore from the market in 2019-20, higher than the Rs 4.22 lakh crore in the previous year to meet the fiscal deficit. The gross borrowing for the current financial year has been raised to Rs 7.1 lakh crore from Rs 5.71 lakh crore in 2018-19. The Central government has decided to make gross borrowing of Rs 4.42 lakh crore in the first half of the 2019-20. The net borrowing, which does not include repayments of past loans, would be Rs 3.40 lakh crore in the first half (April-September) of FY20.

The CNX Nifty is currently trading at 11607.40, down by 203.75 points or 1.73% after trading in a range of 11601.50 and 11771.90. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 5.96%, HCL Technologies up by 1.93%, Bharti Infratel up by 0.94%, TCS up by 0.51% and Tech Mahindra was up by 0.17%. On the flip side, Bajaj Finance down by 6.23%, ONGC down by 4.86%, Indian Oil down by 4.73%, Hero MotoCorp down by 4.62% and SBI down by 4.18% were the top losers.

All Asian markets were trading in red; KOSPI fell 45.87 points or 2.17% to 2,064.72, Taiwan Weighted dropped 34.51 points or 0.32% to 10,751.22, Nikkei 225 slipped 232.67 points or 1.07% to 21,513.71, Hang Seng decreased 556.48 points or 1.93% to 28,218.35, Shanghai Composite declined 75.07 points or 2.49% to 2,935.99, Straits Times trembled 43.84 points or 1.3% to 3,322.97 and Jakarta Composite was down by 25.27 points or 0.4% to 6,348.2.