Benchmarks trade in red territory; Nifty below 11,250 level

Extending losing streak for seventh straight day, Indian equity benchmarks made negative start and are trading in red territory with marginal cut, in early deals on Friday, with Sensex and Nifty slipping below 37,800 and 11,250 levels, respectively. Traders turned cautious with private report that despite heavy buying by foreign investors in the last month of 2018-19 (FY19), foreign portfolio investors remained net sellers of $5.5 billion in the market. An announcement of increase in surcharge on the super-rich in the Union Budget FY20 has weighed on portfolio investors and witnessed outflows, especially in the equity segment. However, downside remained capped with Niti Aayog CEO Amitabh Kant’s statement that India was pursuing a policy of import substitution so far, and in future, the country's policy will essentially focus on export-led growth. He said India has huge potential to become a global manufacturing hub for electronics products. Also, some support came with the Employees' State Insurance Corporation (ESIC) payroll data showing that around 12.66 lakh jobs were created in May, a tad higher than 11.15 lakh jobs in April this year.

Global cues also remained sluggish with most of the Asian markets trading in red at this point of time as doubts emerged over next week's US-China trade meeting and beleaguered Japanese carmaker Nissan announced massive job cuts. The US markets had closed lower after disappointing earnings and a bearish outlook on hopes for a Fed rate cut. Strong American economic data, including Thursday's report showing an increase in durable goods sales in June, has investors fearing a less dovish Fed announcement. Back home, on the sectroal front, sugar stocks trading higher with rating agency ICRA's statement that the Government’s decision to create a sugar buffer stock of four million tonnes for a year would not only help industry financially, but also improve the demand-supply situation in the domestic market. In scrip specific developments, Vedanta, Bajaj Auto and Maruti Suzuki came under pressure ahead of first quarter results to be out later in the day.

The BSE Sensex is currently trading at 37784.17, down by 46.81 points or 0.12% after trading in a range of 37690.47 and 37888.36. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.04%, while Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were Bankex up by 0.30%, Realty up by 0.26%, Auto up by 0.22%, FMCG up by 0.19%, Industrials up by 0.10%, while Oil & Gas down by 1.14%, IT down by 0.72%, TECK down by 0.62%, Energy down by 0.56%, Utilities down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.06%, Tata Motors - DVR up by 1.72%, SBI up by 0.78%, Tata Motors up by 0.73% and Bajaj Finance up by 0.66%. On the flip side, Vedanta down by 2.25%, Bharti Airtel down by 1.52%, ONGC down by 1.08%, Infosys down by 0.89% and Tech Mahindra down by 0.79% were the top losers.

Meanwhile, expressing optimism over export growth, Niti Aayog CEO Amitabh Kant has said India was pursuing a policy of import substitution so far, and in future, the country's policy will essentially focus on export-led growth. He also said India has huge potential to become a global manufacturing hub for electronics products.

Kant said the National Policy for Electronics 2019 has already identified exports of electronics from India to the world and added that mobile devices will be the largest segment, almost accounting for 1/3rd of the manufacturing sector. He noted that “We will try and push this huge impetus to growth in the context of the Prime Minister's vision to make India $5 trillion economy by 2024 and we will give it the great export orientation to the sector”.

Besides, the government has constituted a committee which includes the Niti Aayog CEO, the finance secretary, DIPP secretary, secretary MEITY. Niti Aayog CEO further said “We are all working together to see, how we can do large scale manufacturing, how to make India very integral part of the global supply chain”. He emphasized that the government remains committed to creating a very conducive environment for manufacturing electronics products in India.

The CNX Nifty is currently trading at 11223.90, down by 28.25 points or 0.25% after trading in a range of 11210.05 and 11267.75. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.33%, Bharti Infratel up by 1.85%, Yes Bank up by 1.54%, Indiabulls Housing Finance up by 1.34% and Zee Entertainment up by 1.29%. On the flip side, Indian Oil Corporation down by 3.48%, UPL down by 2.36%, Vedanta down by 2.27%, BPCL down by 1.44% and Bharti Airtel down by 1.43% were the top losers.

All the Asian counters were trading in red; Nikkei 225 declined 107.01 points or 0.49% to 21,649.54, Straits Times shed 28.86 points or 0.85% to 3,352.40. Hang Seng slipped 127.26 points or 0.45% to 28,467.04, Taiwan Weighted tumbled 40.65 points or 0.37% to 10,900.76, KOSPI decreased 40.65 points or 0.56% to 2,063.08, Jakarta Composite slipped 80.47 points or 1.26% to 6,320.90 and Shanghai Composite was down by 4.76 points or 0.16% to 2,932.60.