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Key indices continue to trade lower in early noon session
Apr-18-2019

Indian equity benchmarks continued their weak trade in early noon session, on the back of sustained selling activities by market-participants amid weakness across Asian peers. Selling pressure in the telecom and realty stocks influenced the markets. Some cautiousness prevailed in the markets with Niti Aayog CEO Amitabh Kant statement that India has been registering more than 7 percent Gross Domestic Product (GDP) growth rate and this could not have happened without adequate job creation. He also said that when non-NDA ruled states like Karnataka and West Bengal are claiming that jobs are being created, then it was not possible that at all India level, employment is not being generated. However losses remained restricted as the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March. According to Securities and Exchange Board of India (SEBI) data, total value of P-note investments in Indian markets including equity, debt and derivatives, at March end climbed to Rs 78,110 crore from Rs 73,428 crore at the end of February. Meanwhile, the government has allowed only dal millers to import the annual permissible quota of pulses, a restricted commodity, for the second consecutive year. The industry expects the number of applications for procuring import licences to increase five-eight times this year as those who imported the commodity last year booked good profits.

On the global front, Asian markets were trading mostly in red, after a negative performance on Wall Street, with caution ahead of business surveys in Europe and Japan, and the Good Friday and Easter holidays keeping investors on the sidelines. Back on street, on scrip specific development, Jet Airways stocks decline as the company has suspended operations as lenders turned down the airline’s demand for emergency funding.

The BSE Sensex is currently trading at 39232.66, down by 42.98 points or 0.11% after trading in a range of 39154.25 and 39487.45. There were 12 stocks advancing against 19 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.73%, while Small cap index was down by 0.85%.

The few top gaining sectoral indices on the BSE were Energy up by 1.58%, Oil & Gas up by 0.72% and Auto was up by 0.21%, while Telecom down by 2.41%, Realty down by 2.23%, Metal down by 1.50%, Basic Materials down by 1.04% and Capital Goods was down by 1.03% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors - DVR up by 3.96%, Tata Motors up by 3.34%, Reliance Industries up by 2.29%, Asian Paints up by 0.82% and Hero MotoCorp was up by 0.51%. On the flip side, Bharti Airtel down by 3.60%, Yes Bank down by 3.27%, Vedanta down by 2.89%, Tata Steel down by 1.64% and SBI was down by 1.58% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that the issuance of government-fully serviced bonds (GoI-FSBs) has significantly shot up to Rs 64,192 crore during the financial year 2019 as compared to Rs 15,095 crore during FY18. It noted that such borrowings are estimated to have accounted for 0.34 percent of Gross Domestic Product (GDP) for FY19, as against 0.09 percent of GDP for FY18.

According to the report, the total outstanding value of these GoI-FSBs stood at Rs 88,454 crore at the end of FY19. It explained that the purpose of these borrowings has been to meet the expenditure towards various schemes of government by raising extra-budgetary resources (EBR) by various public sector entities (PSEs). It added that such expenditure may have otherwise required a budgetary provision from the government in the year of these borrowings itself and increased the reported fiscal deficit.

ICRA said that the continuity of similar issuances in future will depend on the government’s stance with respect to accounting for such spending as part of the budgeted expenditure or not. It also said that given the pressure to reduce its fiscal deficit while continuing with social sector spending, similar issuances in future cannot be ruled out. It noted that GoI-FSBs accounted for significant share of the overall corporate bond issuances during FY19. 

The CNX Nifty is currently trading at 11763.85, down by 23.30 points or 0.20% after trading in a range of 11738.50 and 11856.15. There were 15 stocks advancing against 34 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Tata Motors up by 3.21%, Reliance Industries up by 2.39%, Wipro up by 2.01%, BPCL up by 1.17% and Tech Mahindra was up by 1.09%. On the flip side, Bharti Airtel down by 3.56%, Indiabulls Housing down by 3.45%, Yes Bank down by 3.17%, Vedanta down by 2.62% and Bharti Infratel was down by 2.36% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 168.84 points or 0.56% to 29,955.84, Shanghai Composite declined 9.09 points or 0.28% to 3,254.03, Taiwan Weighted dropped 64.24 points or 0.58% to 10,933.02, Straits Times trembled 3.04 points or 0.09% to 3,345.60, KOSPI fell 30.23 points or 1.35% to 2,215.66 and Nikkei 225 was down by 192.15 points or 0.86% to 22,085.82.

On the flip side, Jakarta Composite was up by 39.55 points or 0.61% to 6,521.09.

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