Benchmarks trade lower in early deals on Friday

Extending their southward journey to third straight session, Indian equity benchmarks are trading slightly in the red in early deals on Friday as global rating agency Standard and Poor's stated that a policy logjam and “red tape” have hindered investments in India. However, losses remained capped as some support came in with Reserve Bank of India Governor Raghuram Rajan’s statement that on some issues the government and the central bank were “trying to persuade one another” but on many others the two sides are on the same page. Meanwhile, Tata Consultancy Services posted a better than expected rise in net profit led by strong worldwide client spending. The company posted a 30.7 per cent fall in net profit for the fourth quarter due to a one-off bonus paid to employees. The company reported a net profit of Rs 3,858 crore for the March quarter, excluding cumulative bonus payout of Rs 2,628 crore to employees.

On the global front, the US markets made a flat closing with negative bias in last session after a choppy trade, with some disappointing economic data weighing on upbeat earnings report. Commerce Department reported a much smaller than expected rebound in housing starts. The Asian markets were trading mostly in the green with Hong Kong and Shanghai extending gains at seven-year highs, though the Japanese market was in red on strengthening yen after weak US economic data.

Back home, on the sectoral front, oil and gas, metal and public sector undertaking witnessed the maximum gain in trade, while software, technology and healthcare remained the top losers on the BSE sectoral space. The broader indices too were reeling under pressure, while the market breadth on the BSE was negative; there were 787 shares on the gaining side against 1087 shares on the losing side while 90 shares remain unchanged.

The BSE Sensex is currently trading at 28529.47, down by 136.57 points or 0.48% after trading in a range of 28518.36 and 28696.19. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.83%, while Small cap index down by 0.56%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.69%, Metal up by 0.55%, PSU up by 0.19% and FMCG up by 0.13% while, IT down by 2.17%, TECK down by 1.89%, Healthcare down by 1.05%, Bankex down by 0.98% and Consumer Durables down by 0.45% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 1.91%, Reliance Industries up by 1.14%, Tata Steel up by 0.92%, Hindalco up by 0.84% and Hindustan Unilever up by 0.78%. On the flip side, TCS down by 4.15%, Wipro down by 2.30%, Axis Bank down by 1.63%, Bajaj Auto down by 1.38% and Infosys down by 1.26% were the top losers.

Meanwhile, with an intention to help distressed cane farmers and mills that are reeling under the effect of low domestic and international prices, Union Food Minister Ram Vilas Paswan plans to seek an increase in import duty on sugar to 40% from 25% earlier. A hike in the import duty will make imports uneconomical for sugar refiners despite a plunge in global prices.

According to the Food and Agriculture Organization (FAO) of the United Nations (UN), global sugar price index averaged 187.9 points in March, a sharp decline of 9.2% from February and the lowest since February 2009.

In August last year, import duty on both raw and refined sugar was raised to 25 per cent from 15 per cent to bail out the cash-starved sugar industry. However, without the increase there has been negligible import of sugar.

The Union Food Minister also underscored that his ministry was looking into various measures to lift the beleaguered industry from the doldrums, which could help farmers’ and millers’ issues. However, the industry also feels that the government should create a strategic stockpile of sugar immediately. The industry body, Indian Sugar Mills Association (ISMA) wants the government to create a buffer stock of sugar of 2.5 million tonne, just like China has done, which will ensure that farmers get prices and it gives the industry the liquidity to pay farmers.

The CNX Nifty is currently trading at 8647.85, down by 58.85 points or 0.68% after trading in a range of 8647.60 and 8699.85. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 2.08%, BPCL up by 1.66%, Reliance Industries up by 1.09%, Hindalco up by 0.95% and Tata Steel up by 0.89%. On the flip side, TCS down by 4.16%, Lupin down by 3.96%, Tech Mahindra down by 3.20%, Indusind Bank down by 3.17% and Wipro down by 2.28% were the top losers.

Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI rose 0.28 points or 0.02% to 1,848.22, Jakarta Composite increased 1.1 points or 0.02% to 5,421.83, KOSPI Index gained 2.54 points or 0.12% to 2,142.44, Shanghai Composite surged 86.57 points or 2.06% to 4,281.40 and Hang Seng was up by 141.25 points or 0.51% to 27,880.96.

On the flip side, Nikkei 225 decreased 176.49 points or 0.89% to 19,709.28, Taiwan Weighted declined 73.7 points or 0.76% to 9,583.17 and Straits Times was down by 8.85 points or 0.25% to 3,522.76.