Benchmarks slip further in early noon session

Indian bourses extended their losses and were trading with cut of over a percent in early noon session as selling appeared in Metal, Basic Materials and Capital Goods stocks with Sensex and Nifty tumbling by 389.40 and 124.45 points respectively. Besides, broader indices were also trading in red, dragging their larger peers lower during the trade. Sentiments got undermined with the government data showing 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. Selling further crept in as the Controller General of Accounts (CGA) data showed that the government's fiscal deficit touched Rs 4.32 trillion for the June quarter, which is 61.4 per cent of the budget estimate for 2019-20 fiscal. In absolute terms, the fiscal deficit, the gap between expenditure and revenue, was Rs 4.32 trillion at June-end.

On the global front, Asian markets were trading in red on account of worries about global economic slowdown amid increasing likelihood of a no-deal Brexit and a lack of progress between the US and China in trade negotiation. Back on street, in scrip specific developments, shares of Zee Entertainment (ZEEL) slipped as much as 4.47 per cent, a day after the parent company Essel Group led by Subhash Chandra, said it had offloaded 11 per cent of the nearly 36 per cent promoter stake in Zee Entertainment Enterprises to existing investor Invesco Oppenheimer for Rs 4,224 crore. Meanwhile, the monthly sales numbers for the auto companies have started trickling in, as Maruti Suzuki India has reported total sales of 109,264 units in July 2019, as compared 164,369 units in July 2018, registering fall of 33.5%.

The BSE Sensex is currently trading at 37091.72, down by 389.40 points or 1.04% after trading in a range of 37046.39 and 37387.18. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.50%, while Small cap index was down by 0.77%.

The few gaining sectoral indices on the BSE were Utilities up by 0.59% and Power was up by 0.27%, while Metal down by 2.66%, Basic Materials down by 1.95%, Capital Goods down by 1.37%, Industrials down by 1.27% and Healthcare was down by 1.12% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 1.85%, Hindustan Unilever up by 0.53%, Maruti Suzuki up by 0.52%, NTPC up by 0.43% and ONGC was up by 0.36%. On the flip side, Vedanta down by 4.02%, Tata Motors - DVR down by 3.30%, Tata Motors down by 3.17%, Yes Bank down by 2.96% and HDFC was down by 2.03% were the top losers.

Meanwhile, the growth of eight core infrastructure industries fell to its lowest in more than four years in June 2019. The index of eight core industries rose 0.2% in June, down from 7.8% in same month last year, mainly due to a contraction in oil-related sectors as well as in cement production. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 131.4 in June, 2019, which was 0.2% higher compared to the index of June, 2018. Its cumulative growth during April to June, 2019-20 was 3.5%. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).   

Among eight core sectors, Coal production having 10.33% weight rose 3.2% in June, 2019 over June, 2018, and its cumulative index increased by 2.7% during April to June, 2019-20 over corresponding period of the previous year. Petroleum Refinery production having 28.04% weight declined 9.3% in June, 2019 over June, 2018, and its cumulative index fell by 2.4% during April to June, 2019-20 over the corresponding period of previous year.

The Natural Gas production having 6.88% weight declined by 2.1 percent in June, 2019 over June, 2018, and its cumulative index was down by 0.9% during April to June, 2019-20 over the corresponding period of previous year. Steel production having 17.92% weight increased by 6.9% in June, 2019 over June, 2018 and its cumulative index increased by 13.7% during April to June, 2019-20 over the corresponding period of previous year. Electricity generation having 19.85% weight jumped by 7.3% in June, 2019 over June, 2018 and its cumulative index increased by 6.9% during April to June, 2019-20 over the corresponding period of previous year.  

Cement production having 5.37% weight dropped by 1.5% in June, 2019 over June, 2018 and its cumulative index increased by 1.2% during April to June, 2019-20 over the corresponding period of previous year. Fertilizer production having 2.63% weight surged by 1.5% in June, 2019 over June, 2018, while, its cumulative index declined by 1.1% during April to June, 2019-20 over the corresponding period of previous year. Crude Oil production having 8.98% weight declined by 6.8% in June, 2019 over June, 2018 and its cumulative index fell by 6.8% during April to June, 2019-20 over the corresponding period of previous year. 

The CNX Nifty is currently trading at 10993.55, down by 124.45 points or 1.12% after trading in a range of 10983.80 and 11076.75. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.01%, Wipro up by 2.43%, Power Grid Corporation up by 1.87%, GAIL India up by 1.24% and Hindustan Unilever was up by 0.39%. On the flip side, Zee Entertainment down by 4.92%, Vedanta down by 4.19%, JSW Steel down by 4.06%, Hindalco down by 3.70% and Tata Motors was down by 3.47% were the top losers.

All Asian markets were trading in red, Hang Seng decreased 247.34 points or 0.89% to 27,530.41, Nikkei 225 slipped 10.28 points or 0.05% to 21,511.25, Straits Times trembled 10.43 points or 0.32% to 3,290.32, Jakarta Composite lost 1.46 points or 0.02% to 6,389.05, KOSPI fell 6.57 points or 0.32% to 2,017.98, Shanghai Composite declined 25.11 points or 0.86% to 2,907.40 and Taiwan Weighted was down by 92.06 points or 0.85% to 10,731.75.