Markets trade lackluster in early deals amid weak global cues

Indian equity benchmarks made negative start of a holiday truncated week and extended their southward journey in early deals on Monday, mainly on the back of selling pressure among all the sectoral indices except IT and TECK. Sensex and Nifty are trading lower with cut of around 0.75% and breached their crucial 38,600 and 11,450 levels, respectively. Investors remained cautious ahead of the Reserve Bank of India’s (RBI) monetary policy decision later this week. Some cautiousness also prevailed among market participants, with the RBI’s data showing that India's forex reserves declined by $388 million to $428.572 billion for the week ended September 20 due to a slide in core currency and gold assets. In the week to September 20, foreign currency assets, a major component of overall reserves declined by $125 million to $396.670 billion. Traders failed to take any sense of relief with report that in a boost to Prime Minister Narendra Modi’s ambitious target of India breaking into top 50 nations on the World Bank's ease of doing business ranking, the country has figured among the 20 countries that have improved the most on the list. Investors also overlooked report that the government will soon constitute a working group on the proposed new industrial policy which is aimed at promoting emerging sectors, reducing regulatory hurdles and making India a manufacturing hub.

Global cues also remained lackluster, with Asian markets trading mostly in red as investors turned cautious following the weak cues from Wall Street on Friday amid report that the White House is considering curbs on US investments in China. As per report, Trump administration officials are discussing ways to limit US investors' portfolio flows into China. Investors also digested data that showed Chinese manufacturing activity in September came in above expectations. A private survey of China’s manufacturing activity, the Caixin/Markit factory Purchasing Managers’ Index (PMI), was 51.4 for September - the highest reading since February 2018.

Back home, Finance Minister Nirmala Sitharaman has said the ministries have cleared most of the dues of goods and services to suppliers, mostly MSMEs, and the remaining payments will be done in the next few days. In scrip specific development, Cipla witnessed selling pressure after the United States Food and Drug Administration (USFDA) conducted a cGMP inspection at its Goa manufacturing facility from 16 to 27 September 2019. The inspection ended with 12 observations, none of which are related to data integrity.

The BSE Sensex is currently trading at 38532.44, down by 290.13 points or 0.75% after trading in a range of 38511.64 and 38873.12. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.00%, while Small cap index was down by 0.90%.

The only gaining sectoral indices on the BSE were IT up by 1.03% and TECK was up by 0.66%, while Realty down by 2.41%, Metal down by 2.30%, Bankex down by 1.98%, Telecom down by 1.41% and Basic Materials was down by 1.37% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 3.01%, TCS up by 1.09%, Infosys up by 1.00%, Tech Mahindra up by 0.87% and ITC up by 0.69%. On the flip side, Yes Bank down by 8.61%, Indusind Bank down by 5.67%, Tata Steel down by 3.21%, Sun Pharma down by 2.55% and Tata Motors - DVR down by 2.38% were the top losers.

Meanwhile, the World Bank in its Doing Business 2020 report has ranked India as one of the ‘top 20 improvers’ based on the number of reforms which aid ease of doing business. It has recognized the measures taken for making it easier to do business in India in areas including obtaining construction permits through single-window system in Delhi and Mumbai; reducing cost to start a business by abolishing filing fees for the SPICe company incorporation form, electronic memorandum of association and articles of association; and integrating multiple government agencies online and upgrading port equipment and infrastructure that made exporting and importing easier.

It said ‘India’s achievements this year build on a sustained multi-year reform effort. Since 2003/04, India has implemented 48 reforms captured by Doing Business. The most improved business regulatory areas have been starting a business, dealing with construction permits and resolving insolvency.’ The other countries that made it to the list of top 20 improvers included Azerbaijan, Bahrain, Bangladesh, China, Djibouti, Jordan, Kenya, Kosovo, Kuwait, The Kyrgyz Republic, Myanmar, Nigeria, Qatar, Saudi Arabia, Tajikistan, Togo, Uzbekistan, Zimbabwe, and Pakistan. Though, the final list (annual ranking) by the World Bank for the best performing economies will be released on October 24 this year.

Economies are listed based on two criteria. First, Doing Business selects the economies that implemented reforms making it easier to do business in three or more of the 10 areas included in this year’s aggregate ease of doing business score. Second, Doing Business sorts these economies on the increase in their ease of doing business score due to reforms from the previous year. Besides, India jumped 23 positions to 77 in 2018 from its rank of 100 in 2017 among 190 countries. The country had improved by 30 positions from 130 in 2016. It improved its rank in 6 out of 10 indicators with the biggest change in the ‘Construction Permits’ and ‘Trading across Borders’ from 181 in 2017 to 52 in 2018 and 146 in 2017 to 80 in 2018 respectively.

The CNX Nifty is currently trading at 11423.35, down by 89.05 points or 0.77% after trading in a range of 11417.20 and 11504.60. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 3.03%, TCS up by 1.35%, Infosys up by 1.08%, Tech Mahindra up by 0.94% and ITC up by 0.71%. On the flip side, Yes Bank down by 8.92%, Indusind Bank down by 7.12%, Zee Entertainment down by 3.80%, Tata Steel down by 3.64% and Cipla down by 3.58% were the top losers.

Asian markets were mostly trading in red; Nikkei 225 slipped 123.13 points or 0.56% to 21,755.77, Jakarta Composite lost 33.05 points or 0.53% to 6,163.84, Shanghai Composite declined 11.71 points or 0.4% to 2,920.46 and Straits Times trembled 9.68 points or 0.31% to 3,115.95. On the flip side, KOSPI rose 10.54 points or 0.51% to 2,060.47 and Hang Seng was up by 134.07 points or 0.52% to 26,088.88.