Benchmarks continue sluggish trend in early noon deals

Indian equities continued their weak trade in early noon session on account of selling in front line counters coupled with subdued clues from Asian counterparts. In this lackluster session of trade, only stocks from Fast Moving Consumer Goods and Energy have found some footing in the positive terrain, while those from Metal, Realty and Auto continued to top the list of sellers. Cautiousness also prevailed in the markets with Fitch Ratings’ report that the steep cut in tax paid by companies may stimulate investments and economic growth only in the medium term, but it will lead to breach fiscal targets in the current fiscal itself. Traders took note of report that the UN trade agency has projected India's growth rate for the current year to slowdown at 6 per cent from last year's 7.4 per cent, but the country will be the world's second fastest growing economy, lagging by just a tiny fraction behind China. Meanwhile, according to the RBI data bank’s credit and deposits grew at 10.26 per cent and 10.02 per cent to Rs 97.01 lakh crore and Rs 127.22 lakh crore, respectively, in the fortnight ended September 13.

On the global front, Asian markets were trading in red amid worries on political uncertainty in the US following the release of a formal impeachment inquiry into President Donald Trump. Back on home turf, shares of logistic companies were trading higher on report that Allcargo Logistics was mulling acquiring stake in rival Gati and Sical Logistics. The report further suggested that Centre could also sell logistic firm Container Corporation of India (Concor) before the end of the current financial year 2019-20. Besides, Yes Bank declined as Yes Capital (India) (YCPL), part of the Promoter Group of Yes Bank, has sold 1.8% shareholding in the Bank.

The BSE Sensex is currently trading at 38867.55, down by 122.19 points or 0.31% after trading in a range of 38797.02 and 39107.37. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.36%, while Small cap index was down by 0.49%.

The only gaining sectoral indices on the BSE were FMCG up by 0.46% and Energy was up by 0.17%’ while Metal down by 2.83%, Realty down by 1.91%, Auto down by 1.57%, Basic Materials down by 1.40% and Telecom was down by 1.21% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.18%, Bajaj Finance up by 1.60%, Reliance Industries up by 0.89%, Infosys up by 0.50% and Axis Bank was up by 0.34%. On the flip side, Tata Motors - DVR down by 5.20%, Vedanta down by 4.72%, Tata Motors down by 4.42%, ONGC down by 4.35% and Tata Steel was down by 4.15% were the top losers.

Meanwhile, expressing serious anxiety over significant fall in investment in India in the last decade, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said investment is crucial to make country $5 trillion economy in five years. He has identified three engines to promote investment – land reform (land acquisition laws need reform), labour reform (ease labour laws to encourage employment), and power (price it better to provide access to encourage a more balanced growth across the country).

Subramanian has noted that investment as a percent of Gross domestic product (GDP) was 40 percent in 2008 and this has come down to 29 percent in 2018. This is worrying statistic for a growing economy. He noted the country needs to start differentiating between pro-market and pro-business economies. Adding further, he said 'we can do this effectively by allowing the market to determine which companies survive with minimal government interference in the form of bailouts.’ He added that a good policy is characterized by averages and aggregates and bad policy is characterized by anecdotes.

CEA has further said that the current trade wars could significantly impact India's position in the global trade ecosystem. He added  ‘the country currently only holds two percent of the global trade market share and we as a country need to leverage these opportunities to grow this number, by making the companies more productive, reduce trade restrictions, and identifying gaps in the trade value chain that we can capitalize on.’ He pointed out that manufacturing incentivized by policies like Make in India and agriculture by ensuring access to market for farmers are key sectors that are going to drive a significant portion of India's growth over the next few years.

The CNX Nifty is currently trading at 11529.20, down by 42.00 points or 0.36% after trading in a range of 11505.80 and 11593.60. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.94%, Bajaj Finance up by 1.52%, Cipla up by 1.22%, Indian Oil Corp. up by 1.11% and Reliance Industries was up by 1.01%. On the flip side, Vedanta down by 4.73%, Tata Motors down by 4.46%, ONGC down by 4.34%, Zee Entertainment down by 4.05% and Tata Steel was down by 3.93% were the top losers.

All Asian markets were trading in red, Shanghai Composite declined 0.87 points or 0.03% to 2,928.22, KOSPI fell 23.47 points or 1.13% to 2,051.05, Nikkei 225 slipped 213.03 points or 0.97% to 21,835.21, Taiwan Weighted dropped 42.31 points or 0.39% to 10,829.68, Hang Seng decreased 39.89 points or 0.15% to 26,002.04, Straits Times trembled 8.74 points or 0.28% to 3,117.07 and Jakarta Composite was down by 28.16 points or 0.45% to 6,202.17.