Benchmarks trade in red in late morning session

Indian equity benchmarks continued their weak trade in the late morning session amid weak global cues after Janet Yellen and Fed Vice Chairman Stanley Fischer hinted for a rate hike but didn’t give a timeline for the same. Some selling crept in after Indian rupee opened lower against US dollar at the Interbank Foreign Exchange (Forex) market as demand for the American currency rose among importers and banks. Dollar strengthening against other emerging market currencies also supported to rupee’s fall. Financial services major Goldman Sachs has marginally revised upwards its India CPI forecast to 5.5% for the fiscal citing higher food prices but said the upside risks are limited due to delay in the rollout of the pay commission award. According to the global major, narrowing of the output gap and abating favourable base effects from weak commodity prices may lead to a rise in inflation. The street failed to draw solace from Economic Affairs Secretary Shaktikanta Das statement that India is expected to clock a GDP growth of nearly 8% this fiscal on the back of good monsoon rains. He said that Agriculture production is expected to be much better than previous two years and definitely agriculture will contribute significantly to the GDP. Traders were seen piling position in Auto, Metal and Capital Goods stocks, while selling was witnessed in IT, TECK and Realty sector stocks. In scrip specific development, Trident was trading in green on receiving environment clearance for expansion of its paper mill with improved technology and energy efficiency in Punjab’s Barnala district, entailing a cost of Rs 440 crore.

On the global front, Asian stocks were trading mostly in red, as the case for another interest rate hike has been strengthened by US Fed. China’s cabinet think-tank stated that the country urgently needs to transform its economy by implementing supply-side and structural reforms. China needs to focus on structural reforms including reducing government bureaucracy, and reforming state-owned enterprises, as well as the fiscal, tax and financial systems. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,600 and 27,800 levels respectively. The market breadth on BSE was negative in the ratio of 946:1117, while 149 scrips remained unchanged.

The BSE Sensex is currently trading at 27758.94, down by 23.31 points or 0.08% after trading in a range of 27698.71 and 27827.26. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.13%, while Small cap index was down by 0.02%.

The gaining sectoral indices on the BSE were Auto up by 1.06%, Metal up by 0.67%, Capital Goods up by 0.34% and Oil & Gas up by 0.32%, while IT down by 1.10%, TECK down by 0.82%, Realty down by 0.64%, FMCG down by 0.59% and Power down by 0.47% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.57%, Tata Steel up by 1.39%, Axis Bank up by 1.02%, Reliance Industries up by 0.89% and Hero MotoCorp up by 0.76%.

On the flip side, Wipro down by 2.03%, TCS down by 1.89%, Lupin down by 1.46%, Asian Paints down by 1.26% and Power Grid Corporation down by 1.22% were the top losers.

Meanwhile, Economic Affairs Secretary Shaktikanta Das has expressed his hopes that India will clock a GDP growth of nearly 8 per cent this fiscal on the back of good monsoon rain. He has said that last year the country achieved the growth of 7.6 per cent on the back of failure of two monsoons, but this year monsoon rains have been good and India is projected to see a growth of nearly 8 per cent for the ongoing fiscal year driven by the progress of monsoon rains.

Das said that Agriculture production is expected to be much better than previous two years as good rains have the potential to boost agricultural-sector growth and this will contribute significantly to the GDP. He added that the impact of the Narendra Modi government's reforms is beginning to be felt now, taking India closer to eight per cent growth this fiscal.

Das further said that large number of structural reforms have been undertaken by the government in the last two year. The impact of that is beginning to be felt and all these things put together will better growth of last year and perhaps get closer to 8 per cent. he further said that adding to the reforms, this year's Union Budget has also been very well received by all sectors.

The CNX Nifty is currently trading at 8563.95, down by 8.60 points or 0.10% after trading in a range of 8543.75 and 8583.75. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 4.57%, Tata Motors - DVR up by 2.29%, Tata Steel up by 1.56%, Zee Entertainment up by 1.46% and Hindalco up by 1.29%.

On the flip side, HCL Tech down by 2.22%, Wipro down by 2.03%, TCS down by 1.92%, Tech Mahindra down by 1.72% and Lupin down by 1.53% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 88.33 points or 0.39% to 22,821.21, Jakarta Composite decreased 66 points or 1.21% to 5,372.83, Taiwan Weighted decreased 23.55 points or 0.26% to 9,108.17, KOSPI Index decreased 5.78 points or 0.28% to 2,031.72, FTSE Bursa Malaysia KLCI decreased 3.06 points or 0.18% to 1,680.03 and Shanghai Composite decreased 0.58 points or 0.02% to 3,069.73.

On the other hand, Nikkei 225 increased 378.33 points or 2.31% to 16,739.04.