Markets trade in red with cut of over half percent; Nifty below 11,000 mark

Indian equity benchmarks made negative start and are trading lower with cut of over half a percent each in early deals on Friday. There was some cautiousness with report that India Inc’s growth engine slowed in the June quarter amid sluggish demand across sectors and the base effect in the form of a strong expansion in the year-ago period, reflecting the overall slowdown in the economy. Traders took note of report that the current economic slowdown can be attributed to a combination of structural and cyclical factors, in addition to global uncertainties. It added that the country's economy is showing signs of slowdown, with hi-frequency indicators like industrial output posting subdued growth and automobile sales touching historical lows. Market men failed to take any sense of relief with government data showing that India’s merchandise exports rebounded and grew 2.25% in July, aided by higher shipments of organic goods, drugs and pharmaceuticals, while imports shrank, narrowing the trade deficit. The commerce department data showed that India’s exports increased to $26.3 billion in July from $25.75 billion a year earlier, imports declined 10.4% to $39.76 billion last month from $44.39 billion in July 2018. This resulted in the trade deficit narrowing to $13.43 billion from $18.63 billion a year earlier.

On the global front, Asian markets were trading mostly in green following gains on Wall Street boosted by a good earnings report from Walmart and data showing a jump in nationwide retail sales in July. Meanwhile, investors remain concerned that President Trump’s trade war with China is undermining global economic growth after China on Thursday threatened unspecified retaliation against Trump’s recent threat to impose more tariffs on its imports from September. Back home, banking stocks were buzzing with Fitch’s report that the recent steps by the Reserve Bank to encourage banks to increase lending to non-banking finance companies and retail borrowers are likely to rise risks for the sector. In scrip specific development, Yes Bank soars on raising Rs 1930 crore through the Qualified Institution Placement (QIP) route. The QIP opened on August 08, 2019 and closed on August 14, 2019. The Bank allotted 23.1 crore equity shares of face value of Rs 2 each to eligible qualified institutional buyers (QIBs) at Rs 83.55 per equity share.

The BSE Sensex is currently trading at 37064.50, down by 247.03 points or 0.66% after trading in a range of 36974.41 and 37384.31. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.77%, while Small cap index was down by 0.63%.

The top losing sectoral indices on the BSE were Metal down by 1.78%, IT down by 1.26%, TECK down by 1.25%, Telecom down by 1.10% and Basic Materials was down by 1.06%, while there were no gaining sectoral indices on the BSE.

The few gainers on the Sensex were Yes Bank up by 1.83%, ITC up by 0.70%, ONGC up by 0.63% and Bajaj Finance up by 0.52%. On the flip side, Vedanta down by 2.66%, Tata Motors - DVR down by 2.18%, HCL Tech. down by 1.86%, Tata Motors down by 1.53% and Tata Steel down by 1.44% were the top losers.

Meanwhile, expressing optimism over India’s export growth, Commerce Secretary Anup Wadhawan has said that exports growth of the country is likely to be in double digits in the current fiscal (FY2019-20) despite the challenging situation both on the external and internal fronts. He added that growth in exports was between 9-10% and the volume touched $331 billion which was a record in the last financial year. He also said the country had seen the continuous growth in the last three years.

Wadhawan further said that the global slowdown was almost visible as per the forecast of the International Monetary Fund (IMF) and this fact would be factored in the revised Foreign Trade Policy (FTP). The present FTP is valid till March 31, 2020 and the policy is announced in every five years. He noted that the revised FTP would be simple and easy to use. In the first few months of the current fiscal, both exports and imports have been impacted. He added that while exports growth has managed to retain the past levels, imports have fallen leading to an improvement in the trade deficit.

On the impact of withdrawal of export benefits to Indian exporters under Generalized System of Preferences (GSP) by US, Commerce Secretary said GSP is not an issue which is relevant now. He said that benefits under GSP helped not more than 3-4% of total exports to the US. About engineering exporters, he said that there is a need to focus on upgradation for the benefit of the Indian industry. The government will work closely with the exporters to identify all the issues, both domestic and overseas. He said the centre will also look at the bilateral and regional engagements with various countries.

The CNX Nifty is currently trading at 10968.55, down by 60.85 points or 0.55% after trading in a range of 10924.30 and 11043.95. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 1.70%, UPL up by 1.56%, ITC up by 0.68%, ONGC up by 0.63% and Cipla up by 0.43%. On the flip side, Indiabulls Housing Finance down by 8.28%, Hindalco down by 2.93%, Vedanta down by 2.66%, JSW Steel down by 1.69% and Tata Motors down by 1.61% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 gained 16.71 points or 0.08% to 20,422.36, Hang Seng gained 204.97 points or 0.80% to 25,700.43, Taiwan Weighted strengthened 107.54 points or 1.04% to 10,434.67, Jakarta Composite advanced 24.35 points or 24.35% to 6,281.94, Shanghai Composite soared 19.05 points or 0.68% to 2,834.85. On the flip side, Straits Times decreased 23.31 points or 0.75% to 3,102.78 and Kospi was down by 14.08 points or 0.73% to 1,924.29.