Benchmarks hit fresh intraday low on weak rupee

Benchmarks continued to trade weak and hit fresh intraday low in late morning trade as weakness in rupee against the dollar hurt sentiment. The partially convertible rupee was trading at 66.84 lower than Monday's close of 66. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit. Investors are now anxiously waiting for any fresh measures with Raghuram Rajan taking over the reins of RBI as the new governor on September 5.

Global cues remained supportive as risk-appetite remained on the positive side after robust China’s manufacturing data signaled hopes of growth recovery in world’s second-biggest economy. China’s economy strengthened after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August. Meanwhile, Japanese Nikkei surged over two and a half percent as yen weakened 0.1 per cent against the US dollar

Back home, traders were buying, Metal, PSU, and Capital Goods while selling were seen in Banking, FMCG and Oil & Gas on the BSE. Meanwhile, the benchmarks NSE Nifty and BSE Sensex were trading near the psychological 5,500 and 18,700 levels respectively. The market breadth on BSE was showing negative trend with advances to declines in the ratio of 726: 742.

The BSE Sensex is currently trading at 18742.70, down by 143.43 points or 0.76% after trading in a range of 19007.31 and 18684.47. There were 12 stocks advancing against 18 declines on the index. The broader indices were trading in mix; the BSE Mid cap index was down by 0.02% and Small cap index up by 0.25%.

The top gaining sectoral indices on the BSE were, Metal up by 0.56%, PSU up by 0.41%, Capital Goods up by 0.10% and Auto up by 0.09% while Bankex down by 1.29%, FMCG down by 0.81%, Oil & Gas down by 0.65%, Consumer Durables down by 0.37% and TECK down by 0.24% were the top losers on the sectoral index.

The top gainers on the Sensex were BHEL up by 3.10%, Tata Motors up by 2.57%, Jindal Steel up by 2.13%, ONGC up by 2.11%, and Coal India up by 1.40%. On the flip side, MotoCorp was down by 3.54%,  HDFC was down by 3.16%, Sesa Goa was down by 2.20%, RIL was down by 1.69% and ICICI Bank was down by 1.56% were the top losers on the Sensex.

Meanwhile, in a move to boost the country’s manufacturing sector, the Commerce Ministry, has asked the Finance Ministry to fast track the provision for exempting units in the National Manufacturing Investment Zones (NMIZs) from capital gains tax.

The proposal, which is to be part of the Direct Taxes Code (DTC) being worked out by the Finance Ministry, received a setback when the Government withdrew the DTC Bill from the agenda of the Cabinet meeting earlier last month due to last minute jitters on the proposal to impose additional tax burden on the super rich. Earlier in March, the norms guiding investments in the zones had been notified by the DIPP, while, the Finance Ministry is yet to make changes in the tax laws accordingly.

The NMIZs are envisaged as mega investment regions in the country and equipped with world-class infrastructure which would give a much-needed boost to manufacturing in the country. Further, the NMIZs will help increase the share of manufacturing in the GDP to 25 per cent from the current 16 per cent, and will also create 100 million jobs till 2025.

The CNX Nifty is currently trading at 5,502.50 down by 48.25 points or 0.87% after trading in a range of 5,580.95 and 5,482.30. There were 17 stocks advancing against 30 declines while 3 stock remains unchanged on the index.The top gainers of the Nifty were BHEL up by 3.06%, Tata Motors up by 2.37%, Lupin up by 2.09%,ONGC up by 2.07%, and Jindal Steel  up by 1.78%. On the flip side, HDFC down by 3.74%, IndusInd Bank down by 3.49%, Hero MotoCorp down by 3.31%, Sesa goa down by 2.65% and Reliance Industries down by 2.13% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite rose 10.48 points or 0.50% to 2,108.93, Hang Seng surged 234.97 points or 1.06% to 22,410.31, Jakarta Composite soared 61.16 points or 1.49% to 4,162.39, KLSE Composite strengthened 7.77 points or 0.45% to 1,725.33, Nikkei 225 zoomed 360.96 points or 2.66% to 13,933.88, Seoul Composite jumped 10.00 points or 0.52% to 1,934.81 and Taiwan Weighted was up by 45.46 points or 0.57% to 8,084.32.

On the flip side, Straits Times was down by 2.66 points or 0.09% to 3,053.06.