Local equities continue negative trend amid weak global sentiments

Following weak global cues, local equity benchmarks continue to trade flat in negative terrain in morning session amid diminishing US-China trade deal hopes. Some pessimism spread among the investors with a private report that the economy may be in the midst of a protracted phase of slowdown and the weakness could stretch into the next fiscal, as green shoots of a recovery in key indicators - from industrial production, exports and corporate sales to non-food credit growth - are barely visible. Traders were cautious with Association of Mutual Funds in India’s (Amfi) report which highlighted that equity mutual funds witnessed a net inflow of, the lowest in the last five months, amid a rally in the stock market following a series of reform measures taken by the government. Beside, Finance Minister Nirmala Sitharaman has unveiled a book on global finance, and said it suggests solution for challenges that the world and Indian economy is currently facing. However, further downside remain capped with a report that overseas investors remained net buyers in the domestic capital markets with an investment of over Rs 12,000 crore in the first week of November as market sentiments improved following economic reforms by the government.

On the global front, Asian markets were trading in red, as another record close on Wall Street was overshadowed by uncertainty over the China-US trade talks, while Hong Kong was also hit by fresh protests in which at least one person was shot. Back on the domestic turf, a private report state India’s move to allow 100% foreign direct investment in coal mining is a ‘positive move’ and a good policy enabler towards the country’s long-term ambition of producing 300 million tonnes of steel per annum.

The BSE Sensex is currently trading at 40284.56, down by 39.05 points or 0.10% after trading in a range of 40192.81 and 40385.61. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.50%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Realty up by 0.74%, Telecom up by 0.68%, Utilities up by 0.61%, PSU up by 0.53% and Oil & Gas was up by 0.42%, while IT down by 0.73%, TECK down by 0.49%, FMCG down by 0.14%, Energy down by 0.13% and Auto down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.17%, Yes Bank up by 1.67%, Tata Steel up by 0.85%, Bharti Airtel up by 0.80% and IndusInd Bank was up by 0.79%. On the flip side, Sun Pharma down by 1.22%, HCL Tech down by 1.20%, TCS down by 1.00%, Infosys down by 0.95% and Vedanta was down by 0.87% were the top losers.

Meanwhile, the Ministry of Statistics and Programme Implementation in its latest report for July 2019 has said that as many as 355 infrastructure projects, each worth Rs 150 crore or more, have shown cost overruns to the tune of over Rs 3.88 lakh crore on account of delays and other reasons. The Ministry monitors infrastructure projects worth Rs 150 crore and above. Of these 1,623 projects, 355 reported cost overruns and 552 time escalation.

The report highlighted that total original cost of implementation of the 1,623 projects was Rs 19,33,390.22 crore and their anticipated completion cost is likely to be Rs 23,21,502.84 crore, which reflects overall cost overruns of Rs 3,88,112.62 crore (20.07 percent of original cost). The report added that expenditure incurred on these projects till July 2019 stood at Rs 9,47,571.45 crore, which is 40.82 percent of the anticipated cost of the projects.

The brief reasons for time overruns, as reported by various project implementing agencies, are delays in land acquisition, forest clearance and supply of equipment. Besides, the report said there are other reasons like fund constraints, geological surprises, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist problems, court cases, contractual issues, ROU/ROW (right of use/right of way) problems, law and order situation, among others.

The CNX Nifty is currently trading at 11893.80, down by 14.35 points or 0.12% after trading in a range of 11864.50 and 11920.30. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.35%, NTPC up by 2.26%, Yes Bank up by 1.67%, Tata Motors up by 0.83% and Bharti Airtel was up by 0.83%. On the flip side, Cipla down by 1.78%, Grasim Industries down by 1.67%, Hindalco down by 1.50%, Nestle down by 1.46% and Sun Pharma was down by 1.40% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 616.39 points or 2.23% to 27,034.75, Taiwan Weighted dropped 149.80 points or 1.29% to 11,429.74, Nikkei 225 slipped 61.56 points or 0.26% to 23,330.31, Jakarta Composite lost 36.97 points or 0.6% to 6,141.02, Shanghai Composite declined 36.14 points or 1.22% to 2,928.04, Straits Times trembled 15.60 points or 0.48% to 3,248.70 and KOSPI was down by 8.61 points or 0.4% to 2,128.62.