Sensex Down 180 Points; Realty Stocks Tank

After opening the day flat share markets in India are trading on a negative note and are presently trading below the dotted line. Sectoral indices are trading on a mixed note, with stocks in the realty sector and stocks in the capital goods sector witnessing maximum selling pressure.

The BSE Sensex is trading down by 182 points (down 0.5%) and the NSE Nifty is trading down by 52 points (down 0.5%). Meanwhile, the BSE Mid Cap index is trading down by 1.4%, while the BSE Small Cap index is trading down by 1.82. The rupee is trading at 72.64 to the US$.

In news about the economy, the government raised import duty on various items in an attempt to curb the widening current account deficit.

India raised import duty on a range of items including air-conditioners, refrigerators, washing machines, footwear, jewellery, furniture fittings and tableware besides imposing it on aviation turbine fuel (ATF).

Basic customs duties have been raised on 19 tariff lines that accounted for an import bill of Rs 860 billion in FY18 by 2.5-10%. Basic customs duty of 5% has been imposed on ATF. The prices of jet fuel will be increased by Rs 2,000 per kilolitre from Thursday, oil refiners have communicated to airlines.

The increased duty is likely to yield about Rs 40 billion in revenue.

India’s current account deficit deteriorated to 1.9% of GDP in FY18 from 0.6% in the year before and is forecast to rise to around 2.8% in the current year. Given the uncertain global environment, emerging economies running high current account deficits have seen their currencies depreciate sharply amid interest rate increases by the US Federal Reserve, higher crude prices and an intensifying global trade war.

To add to the woes, the Indian rupee is down about 13% since January.

Talking about currency wars and the falling rupee, we did a small exercise to understand the impact of the weak rupee on the markets.