Benchmarks recover some early losses; continue to trade in red

Benchmark equity indices pared some of their early losses but still trading below their neutral lines amid weak global cues. Sentiment remained downbeat with the World Bank report that India, the world's largest remittance recipient in 2015, may receive a remittance of $65.5 billion this year, a drop of 5 per cent. Investors also remained cautious ahead of a US jobs report due later in the day and the start of domestic quarterly earnings season. However, losses remained capped with the NITI Aayog Vice-Chairman Arvind Panagariya statement that India can become a $10 trillion economy in the next 15 years, from the existing $2 trillion, like China did in last one and a half decade. In scrip development, NMDC rises after the company reported increase in production and sales of iron ore in September 2016 over August 2016.

On the global front, European market edged lower on Friday after the British pound suffered its biggest drop against the dollar since the Brexit vote to hit a fresh three-decade low, as fears over Brexit continued to spook investors.

The BSE Sensex is currently trading at 28062.36, down by 43.85 points or 0.16% after trading in a range of 27964.91 and 28155.68. There were 14 stocks advancing against 15 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 0.01%, while Small cap index was down by 0.07%.

The gaining sectoral indices on the BSE were Metal up by 0.60%, Auto up by 0.44%, Power up by 0.01%, while IT down by 0.87%, TECK down by 0.63%, Oil & Gas down by 0.54%, Consumer Durables down by 0.41%, Capital Goods down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.58%, Tata Motors up by 2.51%, Axis Bank up by 0.93%, Lupin up by 0.90% and Bajaj Auto up by 0.80%. On the flip side, Asian Paints down by 1.95%, Cipla down by 1.60%, Infosys down by 1.32%, HDFC down by 1.14% and Bharti Airtel down by 1.08% 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 8696.60, down by 12.95 points or 0.15% after trading in a range of 8663.80 and 8723.70. There were 19 stocks advancing against 31 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Tata Motors - DVR up by 3.50%, Tata Steel up by 3.45%, Zee Entertainment up by 3.14%, Tata Motors up by 2.54% and Tata Power up by 1.77%. On the flip side, Bharti Infratel down by 2.15%, Asian Paints down by 2.03%, Cipla down by 1.60%, Eicher Motors down by 1.55% and BPCL down by 1.52% were the top losers.

Asian market were trading in red; Hang Seng decreased 100.68 points or 0.42% to 23,851.82, Nikkei 225 declined 39.01 points or 0.23% to 16,860.09, Jakarta Composite dropped 37.84 points or 0.7% to 5,371.50, Taiwan Weighted was down by 18.5 points or 0.2% to 9,265.81, KOSPI Index slumped 11.5 points or 0.56% to 2,053.80 and FTSE Bursa Malaysia KLCI decreased 1.66 points or 0.1% to 1,665.07.  

European markets were trading mostly in red; Germany’s DAX decreased 17.22 points or 0.16% to 10,551.58 and France’s CAC declined 6.71 points or 0.15% to 4,473.39. On flip side, UK’s FTSE 100 increased 38.59 points or 0.55% to 7,038.55.