Benchmarks trade in red; Nifty below 11,300 mark

Indian equity benchmarks made cautious start and are trading lower with cut of around quarter a per cent in early deals on Wednesday amid continued selling pressure by foreign investors and weaker-than-expected June quarter earnings. All the sectoral indices were trading in red. Traders remained cautious with report that the International Monetary Fund (IMF) projected a slower growth rate for India in 2019 and 2020, a downward revision of 0.3 per cent for both the years, saying its GDP will now grow respectively at the rate of 7 and 7.2 per cent reflecting a weaker-than expected outlook for domestic demand. Though, it also said India will still be the fastest growing major economy of the world and much ahead of China. Investors overlooked Minister of Shipping Mansukh Mandaviya’s statement that the Centre plans to bring down logistics cost down from 14 percent of the GDP to 9 percent. Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has launched Utkarsh 2022, the central banks' medium-term strategy framework, in line with evolving macro-economic environment. The framework has been launched to achieve excellence in the performance of RBI's mandates and strengthening the trust of citizens and other institutions.

On the global front, Asian markets were trading mixed amid reports that the US and China will soon resume trade negotiations. As per the reports, a delegation led by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will fly to Shanghai for high-level talks next week. White House economic adviser Lawrence Kudlow said China may be prepared to buy more US agricultural products as a ‘good-will gesture’. The US markets had closed higher on Tuesday.

Back home, in scrip specific development, Hindustan Unilever gained on reporting 14.40% rise in its consolidated net profit at Rs 1795 crore for the quarter ended June 30, 2019 as compared to Rs 1569 crore for the same quarter in the previous year. Total income of the company increased by 6.06% at Rs 10509 crore for Q1FY20 as compared Rs 9909 crore for the corresponding quarter previous year. Besides, SEBI directed Hotel Leela to make additional disclosures to its shareholders on the sale of assets. The watchdog will initiate adjudication proceedings against JM Financial ARC for failing to comply with takeover norms.

The BSE Sensex is currently trading at 37904.48, down by 78.26 points or 0.21% after trading in a range of 37861.56 and 38102.84. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.80%, while Small cap index was down by 0.35%.

The top losing sectoral indices on the BSE were Oil & Gas down by 1.63%, Energy down by 1.43%, Metal down by 1.17%, Auto down by 1.10% and Consumer Durables was down by 1.02%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Yes Bank up by 1.65%, HDFC up by 1.42%, Power Grid Corporation up by 0.90%, Tech Mahindra up by 0.74% and Asian Paints up by 0.51%. On the flip side, Vedanta down by 1.99%, Mahindra & Mahindra down by 1.47%, Bajaj Auto down by 1.35%, Reliance Industries down by 1.32% and Maruti Suzuki down by 1.18% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its World Economic Update has revised downward India’s Gross Domestic Product (GDP) growth forecast by 0.3% for 2019 and 2020 to 7.0% and 7.2%, respectively, over its previous projections early this year. It said the downward revision for both years reflects a weaker-than expected outlook for domestic demand. However, it also said the country will still be the fastest growing major economy of the world and much ahead of China.

In China, it said the negative effects of escalating tariffs and weakening external demand have added pressure to an economy already in the midst of a structural slowdown and needed regulatory strengthening to rein in high dependence on debt. It further said with policy stimulus expected to support activity in the face of the adverse external shock, growth is forecast at 6.2% in 2019 and 6.0% in 2020 -- 0.1 percentage point lower each year.

On the global growth, the IMF said dynamism in the global economy is being weighed down by prolonged policy uncertainty as trade tensions remain heightened despite the recent US-China trade truce, technology tensions have erupted threatening global technology supply chains, and the prospects of a no-deal Brexit have increased. It added that a major downside risk to the outlook remains an escalation of trade and technology tensions that can significantly disrupt global supply chains.

The CNX Nifty is currently trading at 11295.25, down by 35.80 points or 0.32% after trading in a range of 11278.35 and 11359.75. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 1.54%, HDFC up by 1.47%, Power Grid Corporation up by 0.86%, Zee Entertainment up by 0.79% and Tech Mahindra up by 0.61%. On the flip side, BPCL down by 3.54%, Vedanta down by 2.20%, Eicher Motors down by 1.86%, UPL down by 1.72% and JSW Steel down by 1.61% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 103.90 points or 0.48% to 21,724.78, Straits Times strengthened 7.80 points or 0.23% to 3,380.93, Hang Seng gained 263.93 points or 0.93% to 28,730.41 and Shanghai Composite advanced 29.23 points or 1.01% to 2,929.17. On the flip side, Taiwan Weighted declined 1.62 points or 0.01% to 10,945.64, Kospi shed 6.04 points or 0.29% to 2,095.41 and Jakarta Composite was down by 9.80 points or 0.15% to 6,394.01.