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Weak trade continues on Dalal Street
Jun-13-2019

Indian equity benchmarks continued their weak trade in afternoon deals, on the back of sustained selling activities by market-participants amid weakness across Asian peers. The mood of the markets remained dampened with data showing that India’s retail inflation for May inched up to 3.05 percent from 2.92 percent in April, driven by an increase in vegetable prices. Traders also took a note of the Confederation of Indian Industry’s (CII) statement that the Gross Domestic Product (GDP) estimates shown by former CEA Arvind Subramanian have excluded productivity and quality and are based on only volume. Investors failed to draw any sense of relief with The UN Conference on Trade and Development (UNCTAD) in its report stating that Foreign Direct Investment (FDI) to India surged by 6% to $42 billion in 2018, with strong inflows in the manufacturing, communication and financial services sectors, and cross-border merger and acquisition activities.

On the global front, Asian markets were trading mostly in red, amid rising uncertainty over trade talks between the US and China. Back home, the BSE Sensex is currently trading at 39529.10, down by 227.71 points or 0.57% after trading in a range of 39461.27 and 39724.47. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.02%, while Small cap index was down by 1.09%.

The few gaining sectoral indices on the BSE were Capital Goods up by 0.18% and Power was up by 0.01%, while Energy down by 1.13%, Oil & Gas down by 0.93%, Auto down by 0.92%, Healthcare down by 0.90% and Basic Materials was down by 0.90% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.13%, Larsen & Toubro up by 0.66%, Bharti Airtel up by 0.61%, Axis Bank up by 0.50% and Kotak Mahindra Bank was up by 0.49%. On the flip side, Yes Bank down by 10.99%, Indusind Bank down by 7.45%, Tata Motors - DVR down by 3.67%, Tata Motors down by 2.13% and Vedanta was down by 1.70% were the top losers.

Meanwhile, commenting on the Gross Domestic Product (GDP) estimates shown by former CEA Arvind Subramanian, the Confederation of Indian Industry (CII) has said that growth estimates have excluded productivity and quality and are based on only volume. In a research paper, Subramanian has deduced that India’s economic growth rate has been overestimated by around 2.5 percentage points between 2011-12 and 2016-17 due to a change in methodology for calculating GDP.

CII has stated that the Indian economy is a complex one and cannot be captured by just a few indicators. He also said that GDP data has to take a more robust and comprehensive approach where all growth drivers are included. For instance, it said agriculture, which is one-sixth of the Indian economy, has not been included in the study.

Moreover, industry chamber said that the service sector, which accounts for more than 50% of GDP, has been inadequately represented. It also pointed out that specifically, IT and telecom sectors which have been the most dynamic parts of the economy in the recent years have been missed out while many infrastructure sectors like rural roads that have posted double-digit growth for several years are missing in the report.

The CNX Nifty is currently trading at 11834.25, down by 71.95 points or 0.60% after trading in a range of 11817.05 and 11897.40. There were 13 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.19%, Power Grid up by 1.05%, Larsen & Toubro up by 0.67%, Bharti Airtel up by 0.50% and Kotak Mahindra Bank was up by 0.40%. On the flip side, Yes Bank down by 11.13%, Indusind Bank down by 7.48%, UPL down by 2.60%, Tata Motors down by 2.19% and ONGC was down by 1.84% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 187.26 points or 0.69% to 27,121.20, Nikkei 225 slipped 97.72 points or 0.46% to 21,032.00, Taiwan Weighted dropped 54.65 points or 0.51% to 10,561.01, Jakarta Composite lost 19.44 points or 0.31% to 6,256.74, KOSPI fell 5.60 points or 0.27% to 2,103.15 and Straits Times was down by 6.47 points or 0.2% to 3,201.27.

On the flip side, Shanghai Composite was up by 3.94 points or 0.14% to 2,913.32.


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