Benchmarks turn flat in early deals

Indian equity benchmarks have turned flat in early deals on Thursday, despite making a positive start, as traders booked profit at higher levels amid weak global cues. Traders also remained on sidelines eyeing the winter session of Parliament, where the government is unlikely to bring three bills related to GST in the coming days, but it is hopeful of pushing them in the latter half of the winter session. However, key gauges managed to keep their head above water with traders getting some support with Moody’s Investors Service affirming India’s sovereign rating at ‘Baa3’ with a positive outlook, saying it expects policymakers to continue reforms to achieve balanced growth and reduce the government's debt load.

On the global front, most of the Asian markets were trading in red at this point of time ahead of American inflation data and testimony from Federal Reserve Chair Janet Yellen that will help shape US interest-rate expectations. The US markets once again made a mixed closing in last session, as traders took a break after the Dow closed higher for the seventh straight session on Tuesday to reach another new record closing high and traders also reacted to some economic data  showing that conditions largely held steady ahead of last week's elections.

Back home, the broader indices were reeling under pressure, while the market breadth on the BSE was negative; there were 912 shares on the gaining side against 951 shares on the losing side while 90 shares remain unchanged. Select stocks from software space were trading lower after Nasscom has revised IT sector’s growth forecast downwards to 8-10 per cent this year, as its biggest members such as TCS, Wipro, Cognizant and Infosys struggle to grow faster because of an uncertain environment.

The BSE Sensex is currently trading at 26310.86, up by 12.17 points or 0.05% after trading in a range of 26249.30 and 26449.87. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.05%, while Small cap index was down by 0.16%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.95%, Energy up by 0.79%, Bankex up by 0.74%, PSU up by 0.60% and Telecom was up by 0.44%, while Consumer Durables down by 0.89%, Realty down by 0.74%, Auto down by 0.30%, Capital Goods down by 0.30% and Power down by 0.17% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.14%, Axis Bank up by 1.68%, SBI up by 1.32%, Reliance Industries up by 1.05% and ONGC up by 1.05%. On the flip side, Bajaj Auto down by 2.66%, Hero MotoCorp down by 2.04%, Wipro down by 1.67%, Power Grid down by 1.25% and Asian Paints down by 1.04% were the top losers.

Meanwhile, Minister of State for MSME Giriraj Singh has said that a significant proportion of Indian MSMEs seem to be adversely affected from Chinese imports as compared to the rest of the world. He said that “A large number of Indian Micro Small and Medium Enterprises (MSMEs) seem to be affected from cheap Chinese imports as imports have grown at a higher rate compared to shipments from rest of the world.”

According to data from Director General of Commercial Intelligence and Statistics, imports from China in 11 major product groups, largely manufactured by MSMEs in India, have grown at a higher rate than their respective imports from all countries combined during 2012-13 to 2015-16. During 2015-16 these 11 product groups accounted for 74% of India's total imports from China. The 11 product groups pertain to electrical and electronics, mechanical and metallurgical products, as well as chemical, glass and ceramics based items.

Further, foreign direct investment (FDI) policy places some restriction on foreign investment in certain sectors. Subject to such restrictions, foreign investors can set up enterprises in India without a lower level ceiling on investment. Such investment can be greenfield as well as in existing enterprises. Singh added that India has one of the most liberalised FDI policies in the world, wherein 100% FDI under automatic route is permitted in most of the sectors. There is only a small list of sectors where FDI is regulated subjected to government approval, cap or having other conditionalities and the FDI policy equally applies to MSME sector.

The CNX Nifty is currently trading at 8118.05, up by 6.45 points or 0.08% after trading in a range of 8101.40 and 8151.25. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.25%, Tata Power up by 1.70%, Axis Bank up by 1.62%, BHEL up by 1.56% and Hindalco up by 1.41%. On the flip side, Bajaj Auto down by 2.14%, Wipro down by 2.03%, Hero MotoCorp down by 1.58%, Power Grid down by 1.51% and HCL Tech down by 1.50% were the top losers.

Asian markets were trading mostly in red; Hang Seng slipped 27.19 points or 0.12% to 22,253.34, Nikkei 225 shed 23.4 points or 0.13% to 17,838.81, Shanghai Composite decreased 9.8 points or 0.31% to 3,195.26, FTSE Bursa Malaysia KLCI dropped 4.06 points or 0.25% to 1,623.57, Jakarta Composite dipped 1.66 points or 0.03% to 5,183.80 and KOSPI Index was down by 0.12 points or 0.01% to 1,979.53. On the flip side, Taiwan Weighted was up by 12.01 points or 0.13% to 8,974.23.