Sensex, Nifty remain under pressure

Indian equity markets remained under pressure in late afternoon session, mirroring weak European markets. Weakness also witnessed among broader indices which were losing more than half a percent, while Tata Motors performed the worst among all losers on the BSE. Traders were pessimistic with ratings agency CRISIL’s latest report stating that corporate India is expected to register 5-6% revenue growth in Q1 (April-June) of 2019-20, the slowest pace in two years. It pointed out that the slow pace of revenue growth can be attributed to a broad-based slowdown in consumption, which has affected sectors such as automobiles and fast-moving consumer goods (FMCG).  The street overlooked the latest finance ministry data report which showed that deposits in bank accounts opened under Jan Dhan scheme, launched about five years ago by the Modi-government, have crossed the Rs 1 lakh crore mark.

On the global front, European markets were trading in red, after Finland's industrial production fell at the fastest pace in thirteen months in May. The figures from Statistics Finland showed that industrial production declined a seasonally adjusted 2.8 percent month-on-month in May, reversing a 2.6 percent rise in April. This was the worst drop since April last year, when output fell 5.0 percent. However, Asian markets were trading in green.

The BSE Sensex is currently trading at 38519.24, down by 211.58 points or 0.55% after trading in a range of 38474.66 and 38854.85. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.72%, while Small cap index was down by 0.63%.

The only gaining sectoral index on the BSE was Consumer Durables up by 0.03%, while Capital Goods down by 1.82%, Industrials down by 1.69%, Realty down by 1.63%, Oil & Gas down by 1.56% and Metal down by 1.53% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.97%, Yes Bank up by 1.53%, Kotak Mahindra Bank up by 0.95%, ICICI Bank up by 0.61% and HDFC Bank up by 0.42%. On the flip side, Tata Motors down by 3.95%, Bajaj Finance down by 3.51%, Tata Motors - DVR down by 3.41%, Tata Steel down by 3.20% and Axis Bank down by 2.18% were the top losers.

Meanwhile, in order to raise cheap debt from overseas markets, Principal Economic Advisor with the Finance Ministry, Sanjeev Sanyal has said that the government is working on creating a sovereign benchmark.

Sanyal noted that as the primary deficit is low and the debt-GDP ratio was less than 5%, there is scope for raising low-cost debt from overseas markets. Highlighting benefits, he said low-cost borrowings from the overseas market would largely reduce the crowding-out effect in the domestic debt market and help maintain fiscal prudence.

On the inflation front, Sanjeev Sanyal said that the government has been able to anchor the inflation level between 3-4% and the target of real GDP growth of 8% is a stiff and difficult target. Besides, he expressed a need to reduce the spread between lending and deposit rates, which is very high in India.

The CNX Nifty is currently trading at 11486.40, down by 69.50 points or 0.60% after trading in a range of 11477.75 and 11593.70. There were 11 stocks advancing against 37 stocks declining, while 2 stocks remained unchanged on the index.

The top gainers on Nifty were Sun Pharma up by 1.75%, Yes Bank up by 1.48%, Coal India up by 1.26%, Wipro up by 1.15% and Kotak Mahindra Bank up by 0.85%. On the flip side, Tata Motors down by 4.17%, Bajaj Finance down by 3.77%, Indian Oil Corp. down by 3.50%, BPCL down by 3.47% and Tata Steel down by 3.40% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 95.70 points or 0.89% to 10,798.48, Hang Seng increased 82.52 points or 0.29% to 28,198.80, Jakarta Composite soared 15.46 points or 0.24% to 6,403.78, Straits Times advanced 10.59 points or 0.32% to 3,340.05 and KOSPI was up by 6.75 points or 0.33% to 2,058.78. On the flip side, Shanghai Composite declined 16.41 points or 0.56% to 2,911.82 and Nikkei 225 was down by 31.67 points or 0.15% to 21,533.48.

All European markets were trading in red; FTSE lost 12.47 points or 0.17% to 7,524.00, CAC fell 8.34 points or 0.15% to 5,563.76 and DAX was down by 51.82 points or 0.42% to 12,384.73.