Sluggishness continues on Dalal Street in noon deals

Indian equity benchmarks are trading choppy in noon deals as traders remained on sidelines ahead of the European Central Bank (ECB) and Organization of the Petroleum Exporting Countries (OPEC) meeting scheduled today. However, losses remained capped as Indian rupee, reversing its three-day downward trend, recovered by 9 paise to 67.36 against the US dollar in noon deals on fresh selling of the American currency by exporters. Strength in Asian markets too were providing some support to domestic indices, however Nikkei fell more than 2 per cent in its early hours of trading on the back of yen strength.

Back home, Finance Minister Arun Jaitley has said that the roll-out of GST will convert India into one common market, prevent tax-on-tax and make goods and services cheaper. He also said that the country is on an “upward curve” and a good monsoon, GST passage and increased infra and rural spending will further accelerate the growth. On the sectoral front, stocks related to consumer goods space edged lower, with service tax proposals announced during the Union Budget 2016 coming into effect from June 1, imposing 0.5 percent Krishi Kalyan Cess and increasing the total incidence of service tax to 15 percent. On the flip side, Auto sector remained in green after companies like Tata Motors, Eicher Motors, Bajaj Auto etc reported better-than-expected May sales numbers.

The BSE Sensex is currently trading at 26676.97, down by 36.96 points or 0.14% after trading in a range of 26645.95 and 26745.20. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index up by 0.02%.

The top gaining sectoral indices on the BSE were Metal up by 1.62%, Telecom up by 0.88%, PSU up by 0.57%, Basic Materials up by 0.44% and Auto up by 0.38%, while Consumer Durables down by 0.79%, FMCG down by 0.77%, Healthcare down by 0.60%, Realty down by 0.57% and Capital Goods down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 3.30%, Hero MotoCorp up by 1.48%, Tata Steel up by 1.16%, Tata Motors up by 1.16% and GAIL India up by 1.08%. On the flip side, Wipro down by 2.41%, ITC down by 1.93%, Sun Pharma down by 1.30%, Lupin down by 1.10% and Hindustan Unilever down by 0.97% were the top losers.

Meanwhile, concerned about the grim draught situation faced by some parts of the country, the Prime Minister's Office (PMO) has tasked Niti Aayog to prepare a contingency plan for 67 districts in the country that are prone to drought even in years of normal monsoon. The Irrigation Commission had identified 67 drought-prone districts, comprising 326 talukas across eight states with an area of 49.73 million hectares and the Niti Aayog will have to prepare location-specific remedial measures for all the identified districts.

The plan will include material as well as financial support to these districts year after year so as to help them improve their condition. It was reported that Niti Aayog has been asked to prepare the plan at the earliest so that the government can start addressing the problem forthwith.

Some of the financial measures being considered include enhanced subsidies, funding for sowing perennial crops and enhanced work allocation under rural employment guarantee programme. The material support could include making available seeds and other inputs to ensure that farmers get back to their fields with alternate crops even if the main crops fail.

About one-sixth of India, home to about 12% of the country's population, is drought-prone, with the areas that receive rainfall up to 60 cm a year being the most vulnerable. India is heavily dependent on monsoon rains, which have been poor for two years in a row. The government had recently said that nearly 256 districts across India, home to nearly a quarter of the population were impacted by the drought.

The CNX Nifty is currently trading at 8168.05, down by 11.90 points or 0.15% after trading in a range of 8154.75 and 8185.85. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Coal India up by 3.36%, Idea Cellular up by 2.59%, Hindalco up by 2.42%, Hero MotoCorp up by 1.46% and Tech Mahindra up by 1.26%. On the flip side, Wipro down by 2.51%, ITC down by 2.12%, HCL Tech down by 2.08%, Lupin down by 1.42% and Sun Pharma down by 1.11% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 2.39 points or 0.12% to 1,985.11, Shanghai Composite gained 3.72 points or 0.13% to 2,917.22, FTSE Bursa Malaysia KLCI jumped 5.94 points or 0.37% to 1,632.44, Jakarta Composite rose 8.43 points or 0.17% to 4,848.10 and Hang Seng was up by 55.34 points or 0.27% to 20,816.32. On the flip side, Nikkei 225 decreased 393.18 points or 2.32% to 16,562.55 and Taiwan Weighted was down by 41.14 points or 0.48% to 8,556.02.