Benchmarks continue to trade in red in noon session

Indian bourses continued to trade in red in the noon session as funds and retail investors engaged in reducing positions amid a weak trend in Asian markets. Sentiments remained subdued as US Trade Representative Michael Froman underlining the need to improve the business environment in India in order to ensure greater investment inflow, has said that certain areas in the Indian economy like retail and financial services needed further opening up. A private report stated that industrial production in the country is expected to remain subdued and this can act as a restrain to the overall growth momentum in the current fiscal. Weak private sector investment and fragile external sector demand are likely to pull down industrial production in the coming months. Besides, depreciation in rupee value against dollar also weighed on the sentiment. Indian rupee fell further by 13 paise to 66.94 against dollar in early trade, on an increased demand for the American currency from importers. Market participants remained cautious with the Moody's report that there has been a large-scale decline in private investment in PPP projects in recent years because of delays in project approvals and land purchases by the government, complicated dispute resolution mechanisms in the concession agreements and lower than expected revenues due to aggressive assumptions.

On the global front, Asian markets were trading mostly in red on Friday as corporate earnings in the region gave cause for caution and the euro sank to its weakest level since March. Further, the ECB left its ultra-loose monetary policy unchanged but kept the door open to more stimulus in December, with ECB President Mario Draghi dousing recent market speculation that the central bank may begin tapering its 1.7 trillion euro asset-buying programme. Meanwhile, US stocks ended a choppy session on Thursday slightly lower as investors digested the latest round of earnings, with a sharp drop in telecoms offset by gains in healthcare.

Back home, stocks from Realty, FMCG and IT counters were supporting the markets, while those from Consumer Durables, Metal and Banking counters were adding to the underlying cautious undertone. In scrip specific development, HCL Technologies rallied in an otherwise subdued market after the company maintained constant currency guidance at 12-14% for FY17. The company also maintained earnings before interest and tax (EBIT) margin in the range of 19.5% to 20.5%. Further, Biocon hit a fresh record high of Rs 1,020, after the company posted robust 52% year on year (YoY) jump in consolidated net profit at Rs 147 crore for the quarter ended September 30, 2016.

The market breadth remained pessimistic as there were 1171 shares on the gaining side against 1184 shares on the losing side, while 195 shares remained unchanged.

The BSE Sensex is currently trading at 27998.18, down by 131.66 points or 0.47% after trading in a range of 27957.92 and 28163.41. There were 11 stocks advancing against 18 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading mix; the BSE Mid cap index was down by 0.11%, while Small cap index was up by 0.07%.

The few gaining sectoral indices on the BSE were Realty up by 1.18%, FMCG up by 0.40%, IT up by 0.29% and TECK up by 0.11%, while Consumer Durables down by 1.01%, Metal down by 0.93%, Bankex down by 0.46%, PSU down by 0.26% and Power down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.64%, GAIL India up by 1.26%, Bajaj Auto up by 0.85%, Hindustan Unilever up by 0.61% and TCS up by 0.51%. On the flip side, Cipla down by 2.91%, Axis Bank down by 1.96%, Reliance Industries down by 1.87%, HDFC down by 1.64% and ONGC down by 1.24% were the top losers.

Meanwhile, expressing the need of further liberalization, US Trade Representative Michael Froman has said that there is need to further open up certain areas like retail and financial services, in order to ensure greater investment inflow. He said that 'There needs to be continued work on improving the business environment if India is going to attract the kind of investment -- domestic and foreign -- to meet its aspirations.'

Froman, who is leading a high-level delegation here for the 10th India-US Trade Policy Forum (TPF) meeting, further said that liberalizing the retail, financial services and professional services sectors would help create an open, non-discriminatory and predictable regime that improves the development of those markets as well as to ensure greater investment inflow.

He praised India’s reform agenda under the Narendra Modi government, like the landmark Goods and Services Tax, the revision of the bankruptcy code, setting up of dedicated commercial courts, and the release of the National Intellectual Property Rights Policy, he said that US has a direct interest in India's aim to achieve economic growth. Noting that India's position has improved in the World Bank overall ease of doing business rankings, he warned of becoming complacent. 

The US Trade Representative added that as per latest edition of the Global Competitiveness Report released by World Economic Forum (WEF), India's competitiveness improved the fastest in 2015-16, as the country climbed 16 places to the 39th rank among 138 countries in the index. He also said that India had been successful in increasing its growth rate, and is now one of the fastest growing economies in the world.

The CNX Nifty is currently trading at 8666.00, down by 33.40 points or 0.38% after trading in a range of 8652.05 and 8709.10. There were 18 stocks advancing against 32 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were HCL Tech up by 2.31%, Dr. Reddys Lab up by 1.66%, GAIL India up by 0.94%, BPCL up by 0.85% and Tata Power up by 0.79%. On the flip side, Cipla down by 3.29%, Axis Bank down by 2.26%, Hindalco down by 2.16%, Bharti Infratel down by 2.04% and Reliance Industries down by 1.84% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite decreased 0.15%, KOSPI Index shed 0.45%, Jakarta Composite slipped 0.13%, Nikkei 225 dipped 0.32% and Taiwan Weighted was down by 0.11%. On the flip side, FTSE Bursa Malaysia KLCI was up 0.16%.