Local equities continue weak trade in late morning session

Local equity benchmarks continued their weak trade in late morning session, with Sensex and Nifty falling more than 450 and 140 points, respectively, amid heavy selling following a set of subdued macroeconomic data. Sentiments remained down-beat with Government’s report which showed that the growth of eight core sectors slowed down to 2.1% in July as against 7.3% in the corresponding month last year. The decline was seen on account of heavy fall in coal and refinery industry. Sentiments also remained deeply negative as a private report stated that India’s sluggish growth momentum has dampened demand, capital expenditure and export outlook of companies, and the future recovery cycle will be ‘elongated and below market expectations’. Domestic sentiments also got hit with a monthly survey data which highlighting that the country’s manufacturing sector activity declined to its 15-month low in August, owing to slower increases in sales, output and employment. Traders took note of Fitch Solutions’ report that after slumping to an over six-year low, India’s economic growth will pick up over the coming quarters but the rebound is expected to be weaker than before.

On the global front, Asian market were trading mostly in red, as Chinese and American officials struggle to schedule a planned meeting this month to continue trade talks. Back home, in a clear sign of an economic slowdown, the finance ministry has indicated that Goods and Services Tax (GST) collections slipped below Rs 1 lakh crore mark to Rs 98,202 crore in the month of August 2019.

The BSE Sensex is currently trading at 36861.39, down by 471.40 points or 1.26% after trading in a range of 36851.51 and 37188.38. 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 0.92%, while Small cap index was down by 0.50%.

The only gaining sectoral indices on the BSE were IT up by 0.67% and TECK was up by 0.43%, while Consumer Durables down by 1.94%, BANKEX down by 1.88%, PSU down by 1.87%, Oil & Gas down by 1.84% and Auto was down by 1.47% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.27%, Tech Mahindra up by 1.82%, HCL Tech up by 1.49%, TCS up by 1.13% and Hero MotoCorp was up by 0.63%. On the flip side, Tata Motors - DVR down by 3.36%, Tata Motors down by 3.34%, ICICI Bank down by 3.31%, NTPC down by 2.71% and HDFC was down by 2.64% were the top losers.

Meanwhile, the growth of eight core infrastructure industries slowed down to 2.1 percent in July 2019 as compared to 7.3% in the same month a year ago, on the back of contraction in coal, crude oil and natural gas production. According to data released by the ministry of Commerce and Industry, the combined Index of eight core industries stood at 131.9 in July, 2019, which was 2.1% higher compared to the index of July, 2018. Its cumulative growth during April to July, 2019-20 was 3.0%. 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 declined 1.4% in July, 2019 over July, 2018, while its cumulative index increased by 1.8% during April to July, 2019-20 over corresponding period of the previous year. Petroleum Refinery production having 28.04% weight fell 0.9% in July, 2019 over July, 2018, and its cumulative index dropped by 2.0% during April to July, 2019-20 over the corresponding period of previous year.

The Natural Gas production having 6.88% weight declined by 0.5 percent in July, 2019 over July, 2018, and its cumulative index was down by 0.8% during April to July, 2019-20 over the corresponding period of previous year. Steel production having 17.92% weight increased by 6.6% in July, 2019 over July, 2018 and its cumulative index surged by 10.9% during April to July, 2019-20 over the corresponding period of previous year.  Electricity generation having 19.85% weight jumped by 4.2% in July, 2019 over July, 2018 and its cumulative index increased by 6.4% during April to July, 2019-20 over the corresponding period of previous year. 

Cement production having 5.37% weight rose by 7.9% in July, 2019 over July, 2018 and its cumulative index increased by 2.7% during April to July, 2019-20 over the corresponding period of previous year. Fertilizer production having 2.63% weight surged by 1.5% in July, 2019 over July, 2018, while, its cumulative index declined by 0.4% during April to July, 2019-20 over the corresponding period of previous year. Crude Oil production having 8.98% weight declined by 4.4% in July, 2019 over July, 2018 and its cumulative index fell by 6.2% during April to July, 2019-20 over the corresponding period of previous year.

The CNX Nifty is currently trading at 10880.80, down by 142.45 points or 1.29% after trading in a range of 10878.40 and 10967.50. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.36%, HCL Tech up by 1.66%, Britannia up by 1.39%, Bharti Infratel up by 1.22% and TCS was up by 1.15%. On the flip side, Indian Oil Corporation down by 4.08%, Eicher Motors down by 3.39%, Tata Motors down by 3.34%, ICICI Bank down by 3.21% and BPCL was down by 2.97% were the top losers.

Asian market were trading mostly in red, Taiwan Weighted dropped 54.16 points or 0.51% to 10,580.69, Hang Seng decreased 31.96 points or 0.12% to 25,594.59, Jakarta Composite lost 11.78 points or 0.19% to 6,278.77, KOSPI fell 2.84 points or 0.14% to 1,966.35 and Shanghai Composite was down by 1.57 points or 0.05% to 2,922.54.

On the other hand; Straits Times advanced 7.47 points or 0.24% to 3,090.43 and Nikkei 225 was up by 31.21 points or 0.15% to 20,651.40.