Benchmarks erase some gains; starts trading in red

Indian equity markets erased its early gains and are now trading in red in  early noon session on account of selling in frontline blue chip counters. Besides, Investors remained cautious over the monsoon session of Parliament, which started today with key economic bills including the long pending GST Bill lined up to be passed. Sentiments also remained dampened after Fitch expressed concern over deteriorating private investment and the still weak fiscal position. In scrip specific development, IT major Wipro edged lower ahead of its first quarter earnings numbers which will be declared later in the day.

On the global front, Asian markets were trading mixed on Tuesday, tracking the positive cues from Wall Street and as oil prices extended losses in Asian trades after falling more than 1% overnight.

The BSE Sensex is currently trading at 27746.58, down by 0.08 points or 0.00% after trading in a range of 27689.96 and 27804.73. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index was up by 0.06%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.09%, Metal up by 0.51%, PSU up by 0.46%, Capital Goods up by 0.30% and Auto up by 0.23%, while FMCG down by 0.86%, Consumer Durables down by 0.23%, Realty down by 0.18%, Bankex down by 0.10% and IT down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.76%, Tata Motors up by 1.43%, Sun Pharma Inds. up by 1.11%, GAIL India up by 0.98% and Tata Steel up by 0.97%. On the flip side, Hindustan Unilever down by 2.13%, Hero MotoCorp down by 1.34%, ITC down by 1.14%, Mahindra & Mahindra down by 1.00% and HDFC Bank down by 0.95% were the top losers.

Meanwhile, global rating agency Fitch has affirmed India's sovereign Ratings at 'BBB-', the lowest investment grade, backed by a strong medium-term growth outlook and favourable external balances. The outlook on the same is stable, constrained by a weak fiscal position and still-difficult business environment. However, the rating agency cautioned that there will be risk to the current rating if the public-debt burden worsened further, loose macroeconomic policy lead to persistently high inflation levels and an external funding stress emerged from widening current-account deficit.

Rating agency said that the affirmation of India's sovereign ratings balances a strong medium-term growth outlook and favourable external balances against a weak fiscal position and still-difficult business environment. However, it expects India's business environment to improve with 'implementation and continued broadening of the government's structural reform agenda.'

Fitch further forecast GDP growth to slightly accelerate from 7.6 percent in FY16 to 7.7 percent in FY17 and 7.9 percent in FY18, driven by an expected pick-up in consumption in both urban and rural areas. Fitch expects the government's continued structural reform push to support GDP growth in the medium term. At the same time it said that, weak private investment indicated that the economy was still not firing on all cylinders.

With NPAs rising, Fitch estimated the banking system needs around $90bn of capital, while many public-sector banks are likely to find it difficult to access new capital from non-government sources. It also said that weak fiscal balances continue to constrain its ratings, but for FY16 government sticking to its 3.5% target for FY17 has strengthened its fiscal credibility.

The CNX Nifty is currently trading at 8513.85, up by 5.15 points or 0.06% after trading in a range of 8493.65 and 8525.95. There were 34 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 2.50%, ICICI Bank up by 2.13%, Tata Motors - DVR up by 1.62%, Tata Motors up by 1.49% and Ultratech Cement up by 1.47%. On the flip side, Hindustan Unilever down by 2.41%, Indusind Bank down by 1.87%, ITC down by 1.17%, Hero MotoCorp down by 1.08% and Mahindra & Mahindra down by 0.91% were the top losers.

Asian markets were trading mixed, Taiwan Weighted increased 26.66 points or 0.3% to 9,034.87, Jakarta Composite increased 48.54 points or 0.95% to 5,176.04 and Nikkei 225 increased 212.6 points or 1.29% to 16,710.45. On the flip side, Hang Seng decreased 92.88 points or 0.43% to 21,710.30, Shanghai Composite decreased 13.99 points or 0.46% to 3,029.57, KOSPI Index decreased 4.93 points or 0.24% to 2,016.18 and FTSE Bursa Malaysia KLCI decreased 1.44 points or 0.09% to 1,669.40.