Local equities continue weak trade

Local equity benchmarks continued their lackluster trade in morning session, with losses of over one third a percent, ahead of key corporate earnings reports and macroeconomic data due this week for cues. BANKEX, Realty and Metal counters witnessed losses, while Telecom and Energy sectors edged higher. Traders remain concerned with a private report that Indian retail inflation probably reached a 12-month high in September, but still leaving room for further interest rate cuts because it's expected to remain below the Reserve Bank of India's target. Some pessimism also crept in with a private report that a workforce analysis of listed companies reveals that the job loss in public sector was one of the worst in the recent times. In contrast to an increase of 9.2 per cent headcount in private sector, the public sector saw a decline of 2.6 per cent in FY19. Beside, foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 485.24 crore on October 09.

On the global front, Asian markets were trading mostly in green, but investors moved cautiously as they sifted through conflicting reports about the outlook for upcoming China-US trade talks. Back home, ratings agency ICRA said that the domestic logistics sector is set to grow at 8-10 per cent over the medium term with the outlook remaining largely stable.

The BSE Sensex is currently trading at 38034.27, down by 143.68 points or 0.38% after trading in a range of 37978.86 and 38130.23. There were 11 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.42%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Telecom up by 3.16%, Energy up by 1.63%, TECK up by 0.68%, Oil & Gas up by 0.39% and Consumer Durables was up by 0.39%, while BANKEX down by 1.77%, Realty down by 1.44%, Metal down by 1.19%, PSU down by 0.77% and Auto was down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.98%, Reliance Industries up by 2.48%, Hindustan Unilever up by 1.31%, Infosys up by 0.98% and Bajaj Auto was up by 0.80%. On the flip side, Yes Bank down by 3.36%, Tata Motors down by 2.48%, ICICI Bank down by 2.36%, SBI down by 2.24% and Tata Motors - DVR was down by 2.06% were the top losers.

Meanwhile, ratings agency ICRA has said the domestic logistics industry is likely to grow at 8-10% over the medium term with the outlook remaining largely stable. The agency added the key drivers for demand pick-up will be the festive season as well as the anticipated revival in infrastructure spending post monsoon and improvement in receivable cycle of contractors.

It said the ensuing demand momentum will lead to higher freight volumes in the second half of current financial year (H2F20) despite weak macroeconomic scenario. It mentioned that industry capex towards capacity augmentation (fleet, warehousing, cold storage, terminals etc) and investments in technology to improve service offerings is estimated at Rs. 9-11 billion annually (which translates into 2-3% of operating income). The credit metrics of ICRA's sample of logistics companies are anticipated to remain comfortable.

ICRA Ratings Vice President Shamsher Dewan said ‘we expect the sector to continue to outpace the GDP growth over the medium-term, which apart from demand side factors would also be supported by supply-side positives like emergence of integrated logistics players, investments in infrastructure development - warehouses & inter-modal transport hubs and; capacity augmentation being undertaken by large logistics players.’ However, ICRA's analysis of sample of 12 large logistics players in Q1 FY20 has indicated a slowdown to 7% as compared to 11% in Q4 FY19 and 10% in Q1 FY19.

The CNX Nifty is currently trading at 11267.15, down by 46.15 points or 0.41% after trading in a range of 11253.40 and 11293.35. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.02%, Grasim Industries up by 3.77%, Reliance Industries up by 2.55%, Hindustan Unilever up by 1.30% and Infosys was up by 0.97%. On the flip side, Yes Bank down by 3.47%, GAIL India down by 2.57%, Tata Motors down by 2.56%, ICICI Bank down by 2.39% and SBI was down by 2.28% were the top losers.

Asian markets were trading mostly in green, Nikkei 225 surged 62.48 points or 0.29% to 21,518.86, Hang Seng increased 61.56 points or 0.24% to 25,744.37, Shanghai Composite gained 5.48 points or 0.19% to 2,930.34 and Jakarta Composite was up by 3.26 points or 0.05% to 6,032.42.

On the other side, Straits Times trembled 3.79 points or 0.12% to 3,086.11 and KOSPI was down by 14.40 points or 0.7% to 2,031.85.