Benchmarks trade in red; Nifty slips below 11,050 mark

Extending southward journey for third-straight session, Indian equity benchmarks made gap-down opening and are trading lower with cut of over one third of a percent. Broader indices, Sensex and Nifty slipped below their crucial 37,300 and 11,050 levels, respectively. Barring telecom and auto, all other sectoral indices are trading in red on the BSE. Traders remained cautious with a private report that despite the policymakers' efforts to revive the sagging growth momentum, the economy is set to print in a 5.7 percent uptick in the June quarter and is likely to bottom out from there. It noted that India presents a picture of short-term despair and medium term hope. Adding pessimism a private survey report stated that reflecting subdued sentiments, India has been ranked fourth globally in terms of business optimism, as only 64 per cent of corporates are optimistic about the country's economic growth over the next 12 months. Market participants overlooked the government data showing that India received the highest-ever FDI inflow of $64.37 billion during the fiscal ended March 2019. According to the Annual Report 2018-19 of the Department for Promotion of Industry and Internal Trade (DPIIT), foreign direct investments (FDI) worth $286 billion were received in the country in past five years.

Global cues also remained sluggish with all the Asian counterparts trading in red at this point of time, as investors looked cautiously ahead to a key policy update from the US Federal Reserve later in the day. The Fed is widely expected to cut its benchmark interest rate for the first time in a decade. Besides, delegates from the US and China are meeting in Shanghai this week in the latest round of negotiations, months after the trade spat escalated with more tariffs. President Donald Trump ramped up criticism of Beijing just as the new round of talks began Tuesday. Moreover, the US markets also closed lower on Tuesday.

Back home, on the sectoral front, the non-banking financial companies (NBFCs) stocks were buzzing after the Reserve Bank of India (RBI) relaxed the end-use stipulations under external commercial borrowings framework for corporates and NBFCs. In scrip specific development, Coffee Day Enterprises shed another 20% to hit 52-week low in the early trade. Cafe Coffee Day’s founder VG Siddhartha’s body was found near the Netravathi river in Mangaluru. Besides, the Income Tax Department said that Siddhartha had admitted to holding black money after income tax raids were conducted against him and his companies.

The BSE Sensex is currently trading at 37252.52, down by 144.72 points or 0.39% after trading in a range of 37135.93 and 37309.61. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.84%, while Small cap index was down by 0.94%.

The few gaining sectoral indices on the BSE were Telecom up by 1.15% and Auto was up by 0.10%, while FMCG down by 0.96%, Realty down by 0.93%, Consumer Durables down by 0.84%, IT down by 0.80% and Basic Materials was down by 0.63% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.44%, Indusind Bank up by 1.80%, Sun Pharma up by 1.71%, Bharti Airtel up by 1.52% and Hero MotoCorp up by 1.14%. On the flip side, Axis Bank down by 4.47%, Tech Mahindra down by 3.48%, ONGC down by 1.51%, NTPC down by 1.30% and HCL Technologies down by 0.91% were the top losers.

Meanwhile, hitting a new all-time high, India received the foreign direct investments (FDI) inflow of $64.37 billion during the financial year 2018-19 (FY19). According to the Annual Report 2018-19 of the Department for Promotion of Industry and Internal Trade (DPIIT), FDI worth $286 billion were received in the country in past five years. FDI brings in resources, the latest technology and best practices to push economic growth on to a higher trajectory.

The DPIIT under the commerce and industry ministry further said path-breaking reform measures undertaken during the last financial year have resulted in India surpassing the FDI received in 2016-17 and registering an inflow of $60.98 billion during 2017-18. The FDI inflows were $45.14 billion during 2014-15 when Prime Minister Narendra Modi-led NDA government assumed power. The inflows were $55.55 billion in the following year.

Besides, the DPIIT said an action plan for promotion of Indian 'geographical indications' (GIs) has been prepared. This can help supplement the incomes of Indian farmers, weavers, artisans and craftsmen. A logo and tagline for all Indian GIs has been prepared through crowd-sourcing. The government regularly reviews the FDI policy, with a view to make it more investor-friendly.

The CNX Nifty is currently trading at 11043.90, down by 41.50 points or 0.37% after trading in a range of 11010.30 and 11055.35. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.73%, Sun Pharma up by 1.91%, Indusind Bank up by 1.74%, Bharti Airtel up by 1.58% and JSW Steel up by 1.26%. On the flip side, Axis Bank down by 3.92%, Tech Mahindra down by 3.61%, Britannia Industries down by 2.40%, Hindalco down by 1.81% and Ultratech Cement down by 1.53% were the top losers.

All the Asian counters are trading in red; Nikkei 225 declined 161.25 points or 0.74% to 21,548.06, Straits Times shed 4.00 points or 0.12% to 3,346.54, Hang Seng slipped 313.46 points or 1.11% to 27,833.04, Taiwan Weighted tumbled 17.97 points or 0.17% to 10,812.93, KOSPI decreased 6.99 points or 0.34% to 2,031.69, Jakarta Composite slipped 18.49 points or 0.29% to 6,358.51 and Shanghai Composite was down by 15.76 points or 0.53% to 2,936.58.