Local stocks are trading weak in early trade on negative Asian stocks, ignoring the Union Cabinet decision yesterday, 28 August 2019, to relax Foreign Direct Investment (FDI) norms in several sectors. The Nifty dropped below 11,000 level.
At 9:25 IST, the barometer index, the S&P BSE Sensex, was down 221.95 points or 0.59% at 37,229.89. The Nifty 50 index was down 79 points or 0.72% at 10,967.10.
The S&P BSE Mid-Cap index was down 0.33%. The S&P BSE Small-Cap index was down 0.2%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 454 shares rose and 674 shares fell. A total of 40 shares were unchanged.
Trading could be volatile as traders roll over positions in the F&O segment from the near month August 2019 series to September 2019 series. The August 2019 F&O contracts expire today, 29 August 2019.
The Union Cabinet after market hours yesterday, 28 August 2019, relaxed Foreign Direct Investment (FDI) norms in several sectors. Cabinet approved 26% FDI with government approval for digital news media and 100% FDI via automatic route for coal mining and ancillary activities.
Cabinet eased local sourcing norms for FDI in single brand retail. Single-brand retailers allowed to open online stores before setting up brick-and-mortar shops. Cabinet approves 100% FDI in contract manufacturing and approved export subsidy for 60 lakh metric tonne of sugar.
Among stocks, Nestle India rose 1.88%. Indiabulls Housing Finance lost 6.57%. Nestle India will be included and Indiabulls Housing Finance will be removed from the Nifty 50 index from 27 September 2019.
JMC Projects (India) fell 2.52%. JMC Projects (India) said that its holding company viz. Kalpataru Power Transmission (KPTL) has received a notice from the World Bank alleging process violations in bids submitted by its transmission business on two projects in Africa more than seven years ago. KPTL disagrees with the bank's position and intends to contest the proceedings vigorously. The announcement was made after market hours yesterday, 28 August 2019.
Overseas, Asian stocks were trading lower on Thursday as economic turbulence from intensifying US-China frictions and the spectre of a no-deal Brexit drove investors to safer harbours.
US stocks climbed on Wednesday on gains in energy and financial shares. Meanwhile, the White House is scheduled to impose the first stage of U.S. tariffs on $300 billion worth of Chinese imported goods on Sunday, when China is set to respond with tariffs on U.S. products also.
In Europe, U.K. Prime Minister Boris Johnson announced plans to suspend parliament until October 14, less than three weeks before the Britain's scheduled exit from the European Union on October 31. The move is seen as increasing the chances of a no-deal Brexit that economists estimate could deal a significant blow to economic growth in the U.K and Europe.
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