Bourses pare further losses to come off day’s low

Key Indian benchmarks trimmed most of their losses in afternoon session to come off their intraday low points, as Telecom and Auto shares witnessed buying despite weak trend in other Asian markets. Traders found some support with S&P Global Ratings’ report that India is a relatively closed economy and is less reliant on manufacturing for growth which explains why it continues to perform well. It is currently on a soft path but it will outperform in relative terms. However, the trade remained in negative terrain, as anxiety remained among the local traders with the World Bank in its latest report showed that India has now taken a backseat to be the seventh largest economy globally with UK and France now ahead of it. As per the data, India grew to $2.73 trillion economy in 2018. In 2017, the country stood at the fifth spot with its size at $2.65 trillion. On the sectoral front, stocks related to insurance sector remained in focus with CARE Ratings’ statement that domestic life insurance industry is likely to grow at 14 percent to 15 percent per annum. 

On the global front, Asian markets were trading in red in the wake of President Donald Trump’s plans for a new round of tariff hikes on Chinese imports. Back home, the BSE Sensex is currently trading at 36941.41, down by 76.91 points or 0.21% after trading in a range of 36607.41 and 36957.00. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.22%, while Small cap index was down by 0.74%.

The top gaining sectoral indices on the BSE were Telecom up by 2.05%, Auto up by 1.42%, Consumer Discretionary Goods & Services up by 0.58% and Energy was up by 0.17%, while Metal down by 1.57%, Realty down by 1.07%, Oil & Gas down by 0.91%, PSU down by 0.82% and Utilities was down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.98%, Bajaj Auto up by 2.81%, Mahindra & Mahindra up by 2.70%, Maruti Suzuki up by 2.37% and Yes Bank was up by 2.26%. On the flip side, ONGC down by 2.12%, HCL Tech. down by 2.08%, Tata Steel down by 1.81%, ICICI Bank down by 1.68% and Power Grid was down by 1.52% were the top losers.

Meanwhile, Ratings agency Crisil Research in its latest report has said that the passenger vehicles (PVs) sales are likely to face further pressure in August 2019, mainly due to Original Equipment Manufacturers (OEMs) efforts to maintain normal inventory levels amid weak retail sentiments. It noted that the PV volumes are estimated to have dropped by about 27-31 percent in July 2019 as compared to the year ago period.

According to the report, automobile manufacturers in the country cut production by 11 percent in Q1 (April-June) of 2019-20 over the year-ago period amid the industry facing the worst slowdown with sales declining month after month. It also said that the OEMs continued to undertake production cuts in July as well. The production cut in the PV segment was as higher as 15 percent y-o-y while in the utility vehicles (UVs) segment it stood at 2 percent y-o-y.

Crisil Research further stated that wholesale off-take of goods carrying commercial vehicle in July is estimated to have fallen by over 20 percent on-year. Medium & heavy commercial vehicle demand fell due to an oversupply of freight-carrying capacity created after axle norm amidst weak freight demand and low finance availability due to NBFC liquidity crunch. Demand for light commercial vehicles fell, albeit at a lesser pace, due to tepid rural demand and weak finance availability, together lowering demand especially from market load operators.

The CNX Nifty is currently trading at 10958.05, down by 21.95 points or 0.20% after trading in a range of 10848.95 and 10961.50. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.04%, Bajaj Auto up by 2.93%, Eicher Motors up by 2.80%, Mahindra & Mahindra up by 2.54% and Maruti Suzuki was up by 2.29%. On the flip side, Wipro down by 2.55%, ONGC down by 2.08%, HCL Tech. down by 2.05%, Tata Steel down by 1.93% and Coal India was down by 1.90% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 625.79 points or 2.27% to 26,939.91, Taiwan Weighted dropped 182.71 points or 1.7% to 10,549.04, Shanghai Composite declined 37.33 points or 1.28% to 2,871.44, Straits Times trembled 26.41 points or 0.8% to 3,265.34, KOSPI fell 19.21 points or 0.95% to 1,998.13, Jakarta Composite lost 52.19 points or 0.82% to 6,329.35 and Nikkei 225 was down by 453.83 points or 2.11% to 21,087.16.