Markets make a weak start on soft global cues

Markets made a gap-down start under influence of weak global markets, while on domestic front traders were concerned ahead of the GST Council meet starting today. The meeting has become significant in the light of the controversial comments made by West Bengal finance minister Amit Mitra that demonetization - making over 85% of old Rs 500 and Rs 1,000 currency notes illegal - will delay implementation of GST. However, the benchmarks after the initial jitters have started moving in a range in the first hour of trade, with selling pressure getting arrested after economists voiced hopes of a rate cut by the Reserve Bank of India in its upcoming policy review. The broader markets too were showing cuts of around half a percent, while on sectoral front, the FMCG stocks have taken the biggest hit, down by over a percent, followed by oil & gas which is suffering due to the sharp surge in global crude oil price in last two days after the OPEC nations reached a deal to cut the production and Russia too joined them. The auto sector that had witnessed some selling initially has recovered and was trading flat. The sector is reeling under a slowdown induced by the government's demonetisation move, as many manufacturers reported lower sales figures for November. 

The BSE Sensex is currently trading at 26378.25, down by 181.67 points or 0.68% after trading in a range of 26346.45 and 26445.52. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.37%, while Small cap index was lower by 0.49%.

The only gaining sectoral indices on the BSE were Auto up by 0.04% and Metal up by 0.03%, while FMCG down by 1.35%, Consumer Durables down by 1.05%, Realty down by 0.96%, Bankex down by 0.76% and Capital Goods down by 0.71% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.17%, ONGC up by 0.67%, Reliance Industries up by 0.63%, Cipla up by 0.28% and GAIL India up by 0.27%. On the flip side, HDFC down by 2.37%, ITC down by 2.04%, Dr. Reddy’s Lab down by 1.58%, Larsen & Toubro down by 1.25% and HDFC Bank down by 1.23% were the top losers.

Meanwhile, global rating agency, Moody’s Investors Service in its latest report titled 'Power Sector - Asia Pacific: 2017 Outlook - Rising Industry Challenges Are Manageable, Outlook Stable', has upgraded India’s power sector outlook to stable from negative, stating that they have changed the outlook for the Indian power sector to stable, because the increased domestic production of coal will ease constraints on fuel supply.

In addition, Moody’s said that the government's debt restructuring of the financially weak distribution utilities through UDAY scheme will likely improve their financial capacity to make timely payments to power generators. It also said, in India, renewable generation could act as a complementary source of power rather than a competitor to thermal, owing to power shortages.

On the stable outlook, for the power sector in Asia Pacific over the next 12-18 months, the ratings agency said that it is mainly supported by consistent regulatory returns and its expectation of manageable increases in fuel costs over the same period, as well as the absence of significant changes to regulatory environments.
The CNX Nifty is currently trading at 8141.00, down by 51.90 points or 0.63% after trading in a range of 8125.00 and 8154.15. There were 15 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.04%, HCL Tech up by 1.49%, Coal India up by 1.26%, Tech Mahindra up by 1.12% and ONGC up by 0.87%. On the flip side, Kotak Mahindra Bank down by 2.28%, HDFC down by 2.23%, ITC down by 1.88%, BPCL down by 1.84% and Dr. Reddy’s Lab down by 1.66% were the top losers.

The Asian markets were mostly in red barring, Hang Seng declined by 265.63 points or 1.16% to 22,612.60, Nikkei 225 lost 195.29 points or 1.05% to 18,317.83, Taiwan Weighted was down by 68.66 points or 0.74% to 9,194.87, Shanghai Composite decreased by 25.64 points or 0.78% to 3,247.67 and KOSPI Index was lower by 14.04 points or 0.71% to 1,969.71.

On the other hand, FTSE Bursa Malaysia KLCI which was tad higher by 1.42 points or 0.09% to 1,627.86 and Jakarta Composite which gained10.32 points or 0.2% to 5,209.07.