Local equities magnify losses in morning deals

Local equity markets have magnified their losses in morning deals and hovering near the lowest point of the day on account of selling in frontline counters. Traders remain concerned with a private report that the Centre’s net tax receipts (NTR) in Q1 were just 14.7% of the FY20 target (BE), with annual growth of a mere 6%. This is even as annual NTR growth required to meet the BE is a daunting 29.5%. Besides, a private report stated that the Federal Reserve cut interest rates on July 31, but the head of the US central bank said the move might not be the start of a lengthy campaign to shore up the economy against risks including global weakness. Traders took note of Commerce and Industry Minister Piyush Goyal’s statement that India’s exports will have to contribute $1 trillion as the country aims to become a $5 trillion economy in the next few years. He urged manufacturers and exporters to come forward with data and details which directly and indirectly add to the cost of exported products like cess paid on coal, electricity and royalty paid on mines. Market participants failed to take some sense of relief from a report that the Nikkei Manufacturing Purchasing Managers' Index, which rose to 52.5 in July from June's 52.1. It has remained above the 50-mark separating contraction from growth for two years.

On the global front, Asian markets were trading mostly in red after the Federal Reserve's chairman Jerome Powell suggested the quarter-point rate cut was a one-off. Back home, a government report showed that growth of eight core industries dropped to 0.2 per cent in June mainly due to a contraction in oil-related sectors as well as in cement production. The eight core sector industries - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity - had expanded by 7.8 per cent in June last year.

The BSE Sensex is currently trading at 37137.57, down by 343.55 points or 0.92% after trading in a range of 37137.57 and 37387.18. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.54%, while Small cap index was down by 0.58%.

The few gaining sectoral indices on the BSE were Telecom up by 0.29%, Utilities up by 0.14% and Consumer Durables was up by 0.05%, while Metal down by 2.51%, Basic Materials down by 1.69%, Healthcare down by 1.20%, Capital Goods down by 1.05% and Industrials was down by 0.99% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.45%, Hindustan Unilever up by 0.42%, TCS up by 0.21%, IndusInd Bank up by 0.16% and HCL Tech was up by 0.14%. On the flip side, Vedanta down by 4.12%, Yes Bank down by 3.45%, Tata Motors - DVR down by 3.22%, Tata Motors down by 2.80% and HDFC was down by 2.28% were the top losers.

Meanwhile, in order to achieve the target of $5 trillion economy in the next few years, Commerce and Industry Minister Piyush Goyal has said that India's exports need to contribute at least $1 trillion. He urged manufacturers and exporters to come forward with data and details which directly and indirectly add to the cost of exported products like cess paid on coal, electricity and royalty paid on mines.

He mentioned that the ministry is working on making India's export products competitive and simplifying rules and regulations for easy availability of export credit. Goyal asked exporters and importers to flag issues regarding availability of land, labour, common effluent treatment plants, cluster development and logistics support required in ports, airports and customs to the ministry. This would help the ministry to iron out the issues impeding India's exports and facilitate the exporters to take maximum benefit from tariff escalation between the US and China.

A section of the industry has opined that some of the conditions, like requirements of local experience, are limiting their participation in Chinese procurement process. Besides, the government has been engaging with the relevant Chinese government entities to ensure that Indian companies get market access for their products.

The CNX Nifty is currently trading at 11021.70, down by 96.30 points or 0.87% after trading in a range of 11013.70 and 11076.75. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Wipro up by 3.35%, Bharti Infratel up by 3.05%, Power Grid up by 1.49%, GAIL India up by 0.93% and Bajaj Finserv was up by 0.67%. On the flip side, Vedanta down by 4.32%, Hindalco down by 3.94%, Zee Entertainment down by 3.55%, Yes Bank down by 3.18% and UPL was down by 3.09% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 194.00 points or 0.7% to 27,583.75, Taiwan Weighted dropped 87.59 points or 0.81% to 10,736.22, Shanghai Composite declined 22.88 points or 0.78% to 2,909.63, Nikkei 225 slipped 17.53 points or 0.08% to 21,504.00, Straits Times trembled 3.87 points or 0.12% to 3,296.88 and Jakarta Composite lost 1.46 points or 0.02% to 6,389.05. On other side, KOSPI was up by 1.44 points or 0.07% to 2,025.99.