Domestic indices wipeout opening gains; trade lower in early deals

Indian equity benchmarks made flat-to-positive start on Wednesday tracking gains in other Asian counterparts. But, soon markets turned volatile, wipeout all the gains and are trading lower in early deals with cut of around 0.25% each. Selling in Telecom and Auto stocks weighted on the indices. Initially, traders took encouragement with Centre for Monitoring Indian Economy (CMIE) data showing that the country's unemployment rate fell from 7.80 per cent in June to 6.80 per cent in July, the lowest level in the last six months, amid rising agriculture activities during monsoon. Though, market participants turned cautious as India’s trade deficit widened to a record $31 billion in July with a sequential decline in exports and somewhat flat imports owing to growing recessionary trends in developed economies and elevated commodity prices. The data released by the commerce ministry showed merchandise exports declined to a five-month low at $35.2 billion in July while imports eased sequentially to $66 billion.  Investors are eyeing the services PMI data to be out later in the day.

Most of the Asian markets are trading higher, despite the broadly negative cues from the global markets overnight, as traders digested the latest batch of earnings updates and economic data, even as rising geopolitical tensions between the U.S. and China, and concerns that the economy is slowing weighed on the market. Besides, the services sector in Japan continued to expand in July, albeit at a slower pace, the latest survey from Jibun Bank revealed with a services PMI score of 50.2.

Back home, oil & gas and aviation industry stocks were in focus as the government increased the windfall tax on domestically produced crude to Rs 17,750 a tonne from Rs 17,000 a tonne earlier, a move that will hit producers like ONGC and Vedanta. Also, government lowered the export tax on diesel and aviation turbine fuel in line with softening international petroleum product prices. In stock specific developments, Subex hit 20% upper circuit after it inks pact with Reliance Jio, while Jubilant Pharmova fell as its unit gets 6 US FDA observations.

The BSE Sensex is currently trading at 58016.14, down by 120.22 points or 0.21% after trading in a range of 57924.49 and 58307.33. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.73%, while Small cap index was down by 0.47%.

The only gaining sectoral indices on the BSE were IT up by 0.37% and TECK up by 0.23%, while Telecom down by 1.57%, Auto down by 0.99%, Capital Goods down by 0.94%, Consumer Durables down by 0.90%, Industrials down by 0.84% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 0.42%, Tech Mahindra up by 0.40%, Infosys up by 0.38%, Bharti Airtel up by 0.38% and Hindustan Unilever up by 0.17%. On the flip side, Kotak Mahindra Bank down by 1.63%, Mahindra & Mahindra down by 1.37%, Maruti Suzuki down by 1.20%, ITC down by 1.11% and Nestle down by 1.07% were the top losers.

Meanwhile, the Centre for Monitoring Indian Economy (CMIE) in its latest data has showed that the country's unemployment rate fell from 7.80 per cent in June to 6.80 per cent in July, the lowest level in the last six months, amid rising agriculture activities during monsoon. Rural unemployment declined 6.14 per cent to 272.1 million last month from 265.2 million or 8.03 per cent in June. On the other hand, urban unemployment jumped to 8.21 per cent in July from 7.80 per cent in June as the number of jobs fell both in industry as well as services. The employment in urban India fell by 0.6 million, from 125.7 million to 125.1 million.

CMIE Managing Director and CEO Mahesh Vyas said the month-on-month recovery in employment was partial as the fall in June was 13 million compared to the growth of only 6.3 million jobs in July. The recovery was mainly in rural areas and in particular in agriculture as the southwest monsoon progressed and kharif sowing activities picked up pace. Vyas added the agriculture sector in the rural area absorbed an additional 9.4 million workforce in July, while it shed 8 million in June. This lower-than-expected absorption of labour into agriculture in July reflects the patchy progress of the southwest monsoon and the correspondingly poor kharif sowing this year.

He said that the industrial sector lost 0.2 million jobs in July after having lost 4.3 million during June, while the services sector lost 2.8 million jobs in July after having lost 0.8 million in June. He added that the industrial and services sectors have been losing jobs for two months. In May, the employment in the industrial sector had shot up to 108 million, but since then it has declined to 104 million in June and July. He noted that the recovery in industrial jobs was essentially in the construction industry and not in manufacturing, which are of better quality. Over 8 million non-farm jobs were lost during June and July, equally both in the industry and services sectors.

The CNX Nifty is currently trading at 17294.90, down by 50.55 points or 0.29% after trading in a range of 17262.20 and 17385.00. There were 13 stocks advancing against 36 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Cipla up by 1.57%, Apollo Hospital up by 0.55%, HCL Technologies up by 0.55%, Bharti Airtel up by 0.48% and Tech Mahindra up by 0.48%. On the flip side, Coal India down by 2.60%, Kotak Mahindra Bank down by 1.52%, ONGC down by 1.43%, Tata Motors down by 1.34% and ITC down by 1.31% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 119.13 points or 0.43% to 27,713.86, Straits Times added 7.56 points or 0.23% to 3,246.71, Hang Seng jumped 114.62 points or 0.58% to 19,803.83, KOSPI rose 13.42 points or 0.55% to 2,453.04, Jakarta Composite advanced 17.82 points or 0.26% to 7,005.98 and Shanghai Composite was up by 12.85 points or 0.40% to 3,199.12, while Taiwan Weighted fell 15.10 points or 0.10% to 14,732.13.