Key benchmark indices continue to trade in negative territory

Key benchmark indices continued to trade in negative territory in afternoon session as investors looked ahead of the all-important U.S. jobs report later in the day for clues, on when the Federal Reserve might hike interest rates. Weak trend in the Asian region and depreciation in rupee value against dollar weighed on the sentiments. Further, the losses in IT, Oil & Gas, TECK, Capital Goods and Consumer Durables stocks too aided to pessimistic milieu. However, losses remained capped as investors got some support from the International Monetary Fund (IMF) statement that the implementation of goods and services tax (GST) bill will improve India's medium-term growth prospects. It added that as shown by India, progress on reforms could ignite business investment including already strong FDI inflows, further boosting domestic demand. In scrip specific development, Mahindra & Mahindra rose half a percent after launching eSupro, the electric version of Supro vans, in two variants. Moreover, Jaiprakash Associates rallied 1.5 percent after Orient Cement expressed its intent to acquire a 74 percent stake in Bhilai Jaypee Cement.

On the global front, Asian markets were trading in red after the pound briefly and mysteriously plummeted to a fresh 31-year low in early trading amid persistent concerns about Britain’s exit from the European Union. Back home, the BSE Sensex is currently trading at 27996.90, down by 109.31 points or 0.39% after trading in a range of 27990.74 and 28155.68. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.10%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Metal up by 0.21%, while IT down by 0.77%, Oil & Gas down by 0.70%, TECK down by 0.64%, Capital Goods down by 0.63% and Consumer Durables down by 0.61% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.59%, Tata Motors up by 1.15%, Lupin up by 0.65%, GAIL India up by 0.54% and Axis Bank up by 0.44%. On the flip side, Asian Paints down by 1.62%, Cipla down by 1.41%, HDFC down by 1.35%, Bajaj Auto down by 1.16% and Hindustan Unilever down by 1.00% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest report has said that the implementation of goods and services tax (GST) bill will improve India's medium-term growth prospects. It added that as shown by India, progress on reforms could ignite business investment including already strong FDI inflows, further boosting domestic demand.

As per the report, India's growth has continued to benefit from the large improvement in the terms of trade, positive policy actions, including implementation of key structural reforms, gradual reduction of supply-side constraints, and a rebound in confidence.  It added that monsoon rainfall coming in at normal levels which is good for agriculture and, along with a decennial rise in government employee salaries, will support the ongoing recovery in domestic demand. It noted that consumption growth has remained strong and activity in core industrial sectors has picked up and government consumption is set to continue to support growth in 2016. 

According to IMF, greater labour market flexibility and product market competition remain essential to create jobs and raise growth. Priorities also include effective implementation of the new corporate debt restructuring mechanisms. Over the medium term, a number of Asian economies stand to benefit from a demographic dividend, as the working-age population in some economies like India and Indonesia continues to grow, potentially helping sustain strong potential growth.

In its report, the IMF stated that India's GDP growth is projected at 7.6 per cent in both 2016/17 fiscal year (ending in March 2017) and 2017/18 fiscal year, up 0.1 percentage point relative to the April 2016. It also stated that medium-term growth has been revised down to 5.8 per cent from 6.2 per cent, reflecting rising vulnerabilities and slower progress on reining in credit growth and on state- owned-enterprise reform.

The CNX Nifty is currently trading at 8676.70, down by 32.85 points or 0.38% after trading in a range of 8675.15 and 8723.70. There were 16 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Tata Motors - DVR up by 2.37%, Tata Steel up by 2.19%, Zee Entertainment up by 1.63%, Tata Power up by 1.39% and Tata Motors up by 1.33%. On the flip side, Bharti Infratel down by 2.43%, Asian Paints down by 1.69%, BPCL down by 1.64%, Eicher Motors down by 1.58% and HDFC down by 1.47% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 144.42 points or 0.6% to 23,808.08, Nikkei 225 fell 39.01 points or 0.23% to 16,860.09, Jakarta Composite shed 27.72 points or 0.51% to 5,381.62, Taiwan Weighted decreased 18.5 points or 0.2% to 9,265.81, KOSPI Index was down by 11.5 points or 0.56% to 2,053.80 and FTSE Bursa Malaysia KLCI declined 1.56 points or 0.09% to 1,665.17.