Benchmarks trade lower in early deals

Indian equity benchmarks have made a sluggish start and are trading slightly in the red in early deals on Thursday as investors opted to book some profit after previous session’s rally. Also, caution prevails as market participants are keenly awaiting for the wholesale price inflation (WPI) data for the month of April due later in the day today. Sentiments also were dampened on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 71 crore yesterday. However, losses remained capped with Finance Minister Arun Jaitley’s statement that government is committed to passage of GST Bill in July.

On the global front, the US markets made mostly a flat closing in last session, while the Dow and S&P extended their decline, Nasdaq was modestly higher. The trade remained choppy as traders kept a close eye on the bond market following the release of disappointing retail sales data. Retail sales were virtually unchanged in April, inching up by 0.1 percent. The Asian markets were trading mostly in the green at this point of time. However, the Japanese market has declined with rise in yen after a weaker-than-forecast US retail sales fueled concern about growth in the world’s largest economy.

Back home, on the sectoral front, infra, power and public sector undertaking witnessed the maximum gain in trade, while software, technology and banking remained the top losers on the BSE sectoral space. The broader indices however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1031 shares on the gaining side against 723 shares on the losing side while 77 shares remain unchanged.

The BSE Sensex is currently trading at 27187.14, down by 63.96 points or 0.23% after trading in a range of 26948.62 and 27293.99. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56%, while Small cap index gained 0.41%.

The gaining sectoral indices on the BSE were INFRA up by 0.80%, Power up by 0.51%, PSU up by 0.46%, Oil & Gas up by 0.42% and FMCG up by 0.36%, while IT down by 0.82%, TECK down by 0.41%, Bankex down by 0.40% and Consumer Durables down by 0.18% were the few losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.57%, Bajaj Auto up by 2.40%, Bharti Airtel up by 2.22%, NTPC up by 2.03% and Mahindra & Mahindra up by 1.85%. On the flip side, Infosys down by 1.35%, Wipro down by 1.05%, Tata Motors down by 1.05%, TCS down by 0.83% and HDFC down by 0.79% were the top losers.

Meanwhile, in not so encouraging development for the economy, global rating agency, Moody’s Investor Service has stated that monsoon failure and global financial volatility could pose additional risks to India's growth this year, despite this it expects the growth likely to average around 7.5% over the next 18-24 months due to improvement in business environment induced by reforms. The recent reforms efforts from India’s central bank include inflation targeting framework, regulatory simplification, increase in limits for foreign direct investment in rail infrastructure, defence and insurance sectors, among others.

Further, Moody’s in its report highlighted that the current economic conditions in India was reflective of both global and domestic factors, including weak domestic credit conditions, tepid local demand and uncertain global growth. The report further noted that India’s structural reform efforts would revive domestic investment and competitiveness, but over the medium and not the near term.

The report cautioned that US fed decision of hiking rates by June or September could trigger a flight of capital from emerging markets, including India, and result in financial volatility. It added that India’s monsoon for the second consecutive year were likely to be below normal in the current year  at 93%, as parts of north-west and central India may be the most affected. 

Moody’s highlighted the sustainability of the growth rates for the economy would be depended upon measures taken on infrastructure, regulatory and implementation of bureaucratic reforms front and further cautioned that despite robust growth, India's fiscal metrics were likely to remain weaker than those of similarly rated peers, and that he social, political and economic challenges associated with low average incomes would continue to persist over the medium term.

Nevertheless, the rating agency also listed favourable demographics, a large economy, economic diversity as well as high savings and investment rates as India's structural positives.

The CNX Nifty is currently trading at 8215.85, down by 19.60 points or 0.24% after trading in a range of 8137.30 and 8232.80. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.36%, Bharti Airtel up by 2.34%, Asian Paints up by 2.33%, Bajaj Auto up by 2.30%, BPCL up by 2.07%. On the flip side, Lupin down by 3.38%, Infosys down by 1.25%, Tata Motors down by 1.15%, Wipro down by 1.15% and Tech Mahindra down by 1.07% were the top losers.

Asian equity benchmarks were trading mostly in the green; KOSPI Index increased 3.14 points or 0.15% to 2,117.30, FTSE Bursa Malaysia KLCI rose 3.32 points or 0.18% to 1,806.34, Shanghai Composite gained 11.56 points or 0.26% to 4,387.32, Jakarta Composite surged 40.52 points or 0.78% to 5,246.13 and Hang Seng was up by 81.41 points or 0.3% to 27,330.69.

On the flip side, Nikkei 225 decreased 169.66 points or 0.86% to 19,595.06, Taiwan Weighted declined 105.83 points or 1.09% to 9,618.28 and Straits Times was down by 3.88 points or 0.11% to 3,449.29.