Weakness persists over Dalal Street

Weakness continued over Dalal Street in late afternoon session, despite firm cues from European markets. Domestic sentiments were lackluster, as slamming decision of the RBI to transfer its excess reserve to the government, bankers' body All India Bank Employees Association (AIBEA) said the apex bank should not be an ‘extension counter’ of the finance ministry and what is happening now is a matter of ‘serious concern’.

On the global front, European markets were trading in green, as France's economy grew more than initially estimated in the second quarter. The detailed report from Insee showed that gross domestic product grew 0.3 percent sequentially, instead of 0.2 percent estimated earlier. However, Asian markets were trading mixed.

Back home, auto stocks came under pressure, after Fitch Solutions said that Finance Minister Nirmala Sitharaman's stimulus package for the automobile sector is ‘too little, too late’ to prevent a contraction in vehicle sales and a cut in GST rates together with a vehicle scrappage scheme will be needed to prevent the decline.

The BSE Sensex is currently trading at 37233.02, down by 218.82 points or 0.58% after trading in a range of 37025.71 and 37381.80. There were 10 stocks advancing against 20 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.23%, while Small cap index was down by 0.55%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.34%, Metal up by 1.30%, Realty up by 0.47%, TECK up by 0.17% and IT up by 0.17%, while Bankex down by 1.53%, PSU down by 0.43%, Energy down by 0.41%, Industrials down by 0.30% and Basic Materials down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 5.61%, Vedanta up by 3.52%, ONGC up by 1.57%, Maruti Suzuki up by 1.23% and NTPC up by 1.04%. On the flip side, Yes Bank down by 5.55%, SBI down by 2.91%, HDFC down by 2.27%, ICICI Bank down by 2.19% and Axis Bank down by 2.09% were the top losers.

Meanwhile, global rating agency Moody's has revised its outlook for Indian steel sector to negative owing to the factors like rising input costs and inability to pass on higher costs to customers.

It also said that India's steel demand will remain strongest in Asia but slow to mid-single-digit growth, as weak auto and manufacturing demand offsets the growth in the infrastructure and construction industries.

As per Moody's, the rising input costs and inability to pass on higher costs to customers is pressuring the profitability of Asian steel producers. The agency is expecting steel producers' profitability, as measured by EBITDA per tonne, will decline by around 15 per cent in the 12 months to June 2020, following an 8 per cent drop in the 12 months to June 2019.

The CNX Nifty is currently trading at 11000.45, down by 45.65 points or 0.41% after trading in a range of 10922.40 and 11021.10. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 5.53%, Vedanta up by 3.59%, JSW Steel up by 2.72%, Bharti Infratel up by 2.45% and Eicher Motors up by 2.29%. On the flip side, Yes Bank down by 4.96%, SBI down by 2.76%, Indiabulls Housing Finance down by 2.32%, Axis Bank down by 2.22% and HDFC down by 2.16% were the top losers.

Asian markets were trading mixed; Hang Seng decreased 75.29 points or 0.29% to 25,540.19, Nikkei 225 slipped 18.49 points or 0.09% to 20,460.93, KOSPI fell 7.68 points or 0.4% to 1,933.41 and Shanghai Composite was down by 2.54 points or 0.09% to 2,891.22. On the other hand, Jakarta Composite soared 6.46 points or 0.1% to 6,288.11, Straits Times advanced 8.53 points or 0.28% to 3,065.00 and Taiwan Weighted was up by 28.14 points or 0.27% to 10,462.43.

All European markets were trading in green; FTSE gained 74.45 points or 1.05% to 7,189.16, CAC rose 67.66 points or 1.26% to 5,436.46 and DAX was up by 118.14 points or 1.01% to 11,819.16.