Indian equities remain in red terrain

Indian equity benchmarks continued their trade in red territory in afternoon session, as selling momentum in the equities persisted. Cautiousness remained in markets with the International Monetary Fund (IMF) stating that India’s economic growth is much weaker than expected, thanks to corporate and environmental regulatory uncertainty and weaknesses in the shadow-banking sector. Some concern also came with the commerce ministry’s data showed that India's exports dropped by 6.05 per cent to $26.13 billion in August compared to the year-ago month. Imports too declined by 13.45 per cent to $39.58 billion, narrowing trade deficit to $13.45 billion in August. Traders also took a note of data showing that the annual rate of inflation, based on monthly Wholesale Price Index (WPI) for August 2019, remained unchanged at 1.08% compared to July 2019 and 4.62 percent during the corresponding month of the previous year. In the currency front, rupee dropped sharply by 59 paise to 71.51 per dollar in early trade amid gains in the US currency in global markets. 

On the global front, Asian markets were trading mostly in red, after crude prices surged following an attack on Saudi Arabia's biggest oil processing facility. Back home, the BSE Sensex is currently trading at 37220.00, down by 164.99 points or 0.44% after trading in a range of 37111.29 and 37302.06. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.08%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.05%, FMCG up by 0.55%, Healthcare up by 0.37% and Utilities was up by 0.08%, while Oil & Gas down by 1.68%, Energy down by 1.29%, PSU down by 1.06%, Capital Goods down by 0.53% and Metal was down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 0.69%, Hindustan Unilever up by 0.66%, ONGC up by 0.47%, Bajaj Finance up by 0.46% and Sun Pharma was up by 0.41%. On the flip side, Asian Paints down by 2.06%, Yes Bank down by 1.90%, HDFC down by 1.53%, Tata Steel down by 1.25% and SBI was down by 1.18% were the top losers.

Meanwhile, Care Ratings in its latest report has revised its outlook for overall automobile sales (excluding tractors) to 5-7 percent for the current financial year (FY20), on the back of factors like higher vehicle prices, financing issues and higher insurance cost among others. It has revised its outlook after industry volume witnessed sharpest decline at 13.3 percent in April-August period from a double-digit growth of 14.5% registered in the same period last year, amidst weak consumer sentiments and rising ownership costs.

According to the report, the decline in sales in FY20 was led by a 15-20 percent price hikes due to new safety norms, higher insurance and ownership costs, liquidity crisis in the NBFC sector and increased load carrying capacity for medium and heavy commercial vehicles that led to high inventories causing slow movement in movement of vehicles. However, it said in August, the sales of passenger cars and three wheelers have witnessed growth of about 1.8 percent and 9 percent, respectively, on month-on-month basis, while the decline in sales of commercial vehicles and two wheelers have narrowed down to 7.4 percent and 0.3 percent month-on-month, respectively, as against a fall of 17.5 percent and 6.6 percent during the previous month.

Care Ratings further said that the sales growth during the period was largely restricted on account of weak demand for commercial vehicles and passenger vehicles registering a double-digit decline of 21.5 percent and 18.8 percent y-o-y while decline in sales of two and three wheelers segment was restricted to 12.2 percent during the month. Going forward, it expects demand to continue to remain muted during Q2 FY20 and pick up only by Q3 FY20 and continue in Q4 FY20 with various planned product launches, festival demand and pre-buying of automobiles before the implementation of BS-VI norms from April 1, 2020.

The CNX Nifty is currently trading at 11024.35, down by 51.55 points or 0.47% after trading in a range of 10988.80 and 11052.70. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.97%, Titan Company up by 1.86%, Indiabulls Housing Finance up by 1.30%, Sun Pharma up by 0.78% and Tech Mahindra was up by 0.70%. On the flip side, BPCL down by 6.24%, Indian Oil Corporation down by 2.50%, Asian Paints down by 2.07%, UPL down by 2.06% and Yes Bank was down by 2.04% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 322.30 points or 1.18% to 27,030.39, Jakarta Composite lost 126.10 points or 1.99% to 6,208.74, Shanghai Composite declined 7.06 points or 0.23% to 3,024.18 and Straits Times trembled 0.48 points or 0.01% to 3,211.01.

On the flip side, KOSPI rose 13.02 points or 0.64% to 2,062.22 and Taiwan Weighted strengthened 70.58 points or 0.65% to 10,898.13.