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Local equities extend losses in morning deals
Jul-19-2019

Local equity markets have magnified their losses in morning deals, hovering near the lowest point of the day on account of selling in frontline counters. Weakness was also visible in the broader markets with the S&P BSE Mid-cap and Small-cap indices losing around a percent each in trade. Bajaj Finance, Tata Motors - DVR and Mahindra & Mahindra were the prime losers among heavy-weights, pushing the Sensex lower. Cautiousness crept in with a report that India's overall international reserves, stood at $411.9 billion at the end of March this year, down from March last year by $12.5 billion. However, traders ignored former president Pranab Mukherjee’s statement that India would become a $5 trillion economy by 2024 because of the strong foundation laid by previous governments. Besides, Finance Minister Nirmala Sitharaman stated that a task force on the new Direct Tax Code will submit its report by month end. The new direct tax code is set to replace the existing Income Tax Act. The aim is to reform the complex income tax laws into simpler tax codes with reduced rates, fewer exemptions, and tax slabs.

On the global front, Asian markets were trading in green, after a comment from top Federal Reserve official cemented expectations of a US interest rate cut later this month. Back home, Commerce and Industry Minister Piyush Goyal is likely to hold discussions with US Trade Representative Robert Lighthizer next month in Washington to iron out differences on trade related issues.

The BSE Sensex is currently trading at 38636.43, down by 261.03 points or 0.67% after trading in a range of 38616.74 and 39058.73. There were 5 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.91%, while Small cap index down by 0.95%.

The only gaining sectoral indices on the BSE were Consumer Durables was up by 0.28% and Power was up by 0.01%, while Auto down by 1.76%, Consumer Disc down by 1.18%, Realty down by 1.16%, Capital Goods down by 1.12%, Healthcare down by 1.08% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 0.76%, NTPC up by 0.63%, Hindustan Unilever up by 0.59%, HCL Tech up by 0.33% and Power Grid was up by 0.29%. On the flip side, Bajaj Finance down by 3.30%, Tata Motors - DVR down by 2.67%, Mahindra & Mahindra down by 2.43%, Tata Motors down by 1.96% and Sun Pharma was down by 1.91% were the top losers.

Meanwhile, NITI Aayog Vice Chairman Rajiv Kumar has said that the focus of the second term of the Modi government is accelerated economic growth, beyond the 7 percent the country has achieved to an eight percent plus growth that is led by the private sector and private enterprise. He asserted that the next five years, India is going to be at the cusp of a major transformation and if we succeed, as this government is wanting to, you will see a decade plus more of sustained high growth which will be undertaken with inclusion but also with sustainability.

Kumar also said that the intention and the sharp focus of the Modi government is very clear and it is that private enterprise must be given the space, the incentives to play its role in the economy. The government has no intention at all to try and be the main driver of growth in the country because it is not possible.

Besides, he stressed there is clear recognition that some of the reform measures that have been undertaken, including demonetisation, has helped formulate the economy to a much larger extent than what it was before. It also meant that some of the fizz that was in the economy can be replaced by a much larger play of the private sector and private investment.

He highlighted that the government is conscious of the fact that since 2011 private investment has pretty much turned turtle, the Public-Private Partnership (PPP) models did not work. A large number of those PPP ventures converted themselves into Non-Performing Assets (NPAs), the risks were too much for the private sector to take, the risks associated with projects, land acquisition became too high and the investment to GDP ratio has declined.

The CNX Nifty is currently trading at 11516.35, down by 80.55 points or 0.69% after trading in a range of 11503.20 and 11640.35. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 1.06%, Ultratech Cement up by 1.05%, TCS up by 0.62%, NTPC up by 0.43% and HCL Tech was up by 0.33%. On the flip side, Bajaj Finance down by 3.26%, Mahindra & Mahindra down by 2.39%, GAIL India down by 2.25%, Hero MotoCorp down by 2.08% and Bajaj Finserv was down by 1.93% were the top losers.

All Asian market were trading in green, Nikkei 225 surged 427.10 points or 2.03% to 21,473.34, Hang Seng increased 308.94 points or 1.09% to 28,770.60, Taiwan Weighted strengthened 92.48 points or 0.86% to 10,891.76, Jakarta Composite soared 41.84 points or 0.65% to 6,445.13, Shanghai Composite gained 29.40 points or 1.01% to 2,930.58, KOSPI rose 28.05 points or 1.36% to 2,094.60 and Straits Times advanced 14.37 points or 0.43% to 3,375.42.

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