Markets trade lower in early deals after a gap-up start

Indian equity benchmarks slipped into negative terrain, after making a gap up opening in morning deals on Tuesday, as traders booked some profits after previous day rally. There was some cautiousness in the markets with report that India's exports fell for the 14th consecutive month with shipments in January, 2016 contracting 13.6 per cent year-on-year to $21 billion due to weak overseas demand as well as fall in major export items. The sentiments were further weighed down by Indian rupee depreciating by 15 paise to 68.22 against the American currency in early trade today at the Interbank Foreign Exchange market as the dollar firmed up overseas. Meanwhile, foreign institutional investors were net sellers in equities to the tune of Rs 1,312 crore on Monday, as per provisional stock exchange. On the sectoral front, traders were seen piling up position in Power, Oil & Gas, Consumer Durables and Realty, while selling was witnessed in Capital Goods, Metal, IT, FMCG and TECK.

In the scrip specific development, Gati surged 7% on the BSE after the company said that it is exploring strategies for growth to align with their vision of delivering 1 million packages everyday by 2020.

On the global front, Asian markets were trading in green buoyed by the surge in crude oil prices and dovish comments from the European Central Bank's President Mario Draghi. Draghi has said that the European Central Bank would take action in March, if downside risks to price stability persist.

Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,150 and 23,500 levels respectively. The market breadth on BSE was negative in the ratio of 718: 873 while 79 scrips remained unchanged.

The BSE Sensex is currently trading at 23479.70, down by 74.42 points or 0.32% after trading in a range of 23424.94 and 23692.08. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.68%, while Small cap index down by 0.21%.

The gaining sectoral indices on the BSE were Power up by 0.43%, Oil & Gas up by 0.29%, Consumer Durables up by 0.10% and Realty up by 0.01%, while Capital Goods down by 0.64%, Metal down by 0.58%, IT down by 0.57%, FMCG down by 0.42% and TECK down by 0.34% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 3.37%, NTPC up by 2.28%, Bharti Airtel up by 1.68%, ONGC up by 1.65% and Hero MotoCorp up by 1.24%. On the flip side, Lupin down by 2.20%, Coal India down by 1.40%, Maruti Suzuki down by 1.26%, ICICI Bank down by 1.23% and Asian Paints down by 1.10% were the top losers.

Meanwhile, addressing the need of the Capital Goods sector, the government has unveiled the first-ever policy for the country's capital goods sector which envisions increasing the share of capital goods in total manufacturing activity from 12 per cent at present to 20 per cent by 2025. The policy envisages increasing exports from the current 27% to 40% of production while increasing share of domestic production in India's demand from 60% to 80%, thus making India a net exporter of capital goods. The policy also aims to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSMEs.

Union Minister of Heavy Industry and Public Enterprises Shri Anant Ganga Ram Geete said that realising the strategic importance of Capital Goods and the pivotal role played by it in the overall manufacturing, as the pillar of strength to the vision of “Make in India”, the government has now come out with this policy. He added that this is a  first time ever policy of this sector, with a clear objective of increasing production of capital goods from around Rs 230,000 crore in 2014-15 to Rs 750,000 Crore in 2025 and raising direct and indirect employment from the current 8.4 million to around 30 million.

The Department of Heavy Industry had set up a Joint Taskforce with Confederation of Indian industry (CII) as an attempt to ensure that the formulation of the Capital Goods Policy is done in the most democratic manner and the recommendations would carve out a roadmap for Capital Goods sector to become a part of global value chains apart from mere supply chains.

The policy has been framed after extensive stakeholders’ consultations with industry, academia, different ministries etc. Earlier, the government had put out the draft national capital goods policy, seeking comments and suggestions on the various proposals. The aim of the policy is to create game changing strategies for the capital goods sector. Some of the key issues addressed include availability of Finance, Raw Material, Innovation and Technology, Productivity, Quality and Environment Friendly Manufacturing Practices, Promoting Exports and Creating Domestic Demand. Key policy recommendations include strengthening the existing scheme of the DHI on enhancement of competitiveness of Capital Goods Sector by increasing budgetary allocation for increasing scope to further boost global competitiveness in various sub sectors of CG.

The CNX Nifty is currently trading at 7144.55, down by 18.40 points or 0.26% after trading in a range of 7140.05 and 7204.65. There were 25 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 3.32%, NTPC up by 2.12%, Cairn India up by 1.68%, ONGC up by 1.62% and Bharti Airtel up by 1.52%. On the flip side, Bank Of Baroda down by 3.48%, Vedanta down by 2.00%, Zee Entertainment down by 1.89%, Coal India down by 1.65% and Lupin down by 1.44% were the top losers.

Asian markets were trading in green, Jakarta Composite increased 9.09 points or 0.19% to 4,749.82, FTSE Bursa Malaysia KLCI increased 10.38 points or 0.63% to 1,660.34, KOSPI Index increased 27.82 points or 1.49% to 1,890.02, Shanghai Composite increased 77.66 points or 2.83% to 2,823.86, Taiwan Weighted increased 105.69 points or 1.31% to 8,172.20, Nikkei 225 increased 144.26 points or 0.9% to 16,166.84 and Hang Seng increased 303.01 points or 1.6% to 19,221.15.