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Markets continue to trade lower
Oct-19-2018

Heavy sell-off was keeping the markets down in late afternoon session, with Sensex losing more than 550 points. Weak global cues along with losses led by major industry leaders like Yes Bank and Reliance Industries, also weighed on markets sentiments. Pessimism remained among the traders, with the State Bank of India’s latest research report that depreciation of rupee has neither helped in improving exports nor in slowing imports, leading to an incremental trade deficit of $4 billion in the first half of the current fiscal (H1FY19). Some concerns also came with a private report stating that in 2018, in USD terms wealth in India grew a modest 2.6% to around $6 trillion and wealth per adult stayed flat at $7,020. Traders overlooked a another private study report stating that flexible working could contribute $376 billion annually to the Indian economy by 2030 as shared office space helps corporates to save cost and boost employee productivity.

On the sectoral front, logistics companies stocks were trading lower, even though CARE Ratings’ latest report showed that the country's logistics industry is projected to be worth $215 billion by 2020-21, recording a 10% compounded annual growth rate (CAGR) over its approximate size of $160 billion in 2016-17. Metal stocks remained in focused amid reports that a lower-than-estimated rainfall in the July-September quarter has augured well for the entire domestic steel industry, which kept its capacity utilisation much higher than usual, in turn indicating strong volume growth for the quarter. In scrip specific development, Mindtree plunged despite reporting 65.44% rise in Q2 consolidated net profit at Rs 206.30 crore as against Rs 124.70 crore for the same quarter in the previous year.

On the global front, European markets were trading in red, as UK retail sales dropped more-than-expected in September reflecting the biggest decline in food store sales in almost two years. As per figures from the Office for National Statistics, retail sales including auto fuel fell 0.8% month-on-month in September, due to a large decline of 1.5% in food stores, which was the largest food store sales fall since October 2015. Asian markets were also trading in red, after Chinese growth figures missed expectations, suggesting that there was downward pressure on the world's second-largest economy due to the ongoing Sino-US trade war. China's GDP climbed an annual 6.5% in the third quarter of 2018- shy of estimates for 6.6% and down from 6.7% in the previous three months.

The BSE Sensex is currently trading at 34194.07, down by 585.51 points or 1.68% after trading in a range of 34140.32 and 34563.29. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.36%, while Small cap index was down by 1.80%.

The only gaining sectoral indices on the BSE were Telecom up by 0.23%, Metal up by 0.10% and FMCG up by 0.04%, while Energy down by 3.42%, IT down by 2.83%, TECK down by 2.56%, Auto down by 1.78% and Consumer Disc down by 1.65% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.39%, Vedanta up by 1.30%, Hindustan Unilever up by 0.78%, ITC up by 0.65% and ICICI Bank up by 0.57%. On the flip side, Yes Bank down by 5.63%, Reliance Industries down by 4.67%, HDFC down by 4.56%, Hero MotoCorp down by 3.88% and Tata Motors - DVR down by 3.80% were the top losers.

Meanwhile, in order to protect the domestic players and to discourage cheap imports, the government has imposed anti-dumping duty on certain varieties of steel products exported to India from China. As per a government notification, the duty will be in the range of $44.89 to $185.51 per tonne and will be effective for a period of five years.

The Directorate General of Trade Remedies (DGTR) which ensures a level playing field to the Domestic Industry against the adverse impact of the unfair trade practices, in its anti-dumping investigation concluded that dumped imports of 'straight length bars and rods of alloy steel' from China have increased in absolute terms during the period of probe (2016-17). It further added that the domestic industry has suffered material injury as the goods have been exported to India from the China below normal value.

JSW Steel, Sunflag Iron & Steel, Usha Martin, Gerdau Steel India, Vardhman Special Steels and Jayaswal Neco Industries had jointly filed an application before DGTR for initiation of investigations and levying of anti-dumping duties on some steel products.

The CNX Nifty is currently trading at 10277.75, down by 175.30 points or 1.68% after trading in a range of 10249.60 and 10380.10. There were 14 stocks advancing against 35 stocks declining, while 1 index remained unchanged on the index.

The top gainers on Nifty were HPCL up by 3.28%, Bharti Infratel up by 1.71%, Sun Pharma up by 1.32%, Vedanta up by 1.25% and ITC up by 0.86%. On the flip side, Indiabulls Housing Finance down by 15.11%, Yes Bank down by 5.80%, HCL Tech. down by 5.15%, Reliance Industries down by 4.52% and HDFC down by 4.46% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 plunged 126.08 points or 0.56% to 22,532.08, Jakarta Composite decreased 8.92 points or 0.15% to 5,836.32, Straits Times fell 12.50 points or 0.41% to 3,057.17 and Taiwan Weighted lost 34.47 points or 0.35% to 9,919.26. On the flip side, Hang Seng increased 106.85 points or 0.42% to 25,561.40, Shanghai Composite gained 64.05 points or 2.51% to 2,550.47 and KOSPI was up by 7.95 points or 0.37% to 2,156.26.

All European markets were trading in red; UK’s FTSE 100 dipped 7.87 points or 0.11% to 7,019.12, France’s CAC declined 37.91 points or 0.75% to 5,078.88 and Germany’s DAX was down by 61.10 points or 0.53% to 11,528.11.

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