Benchmarks continue to trade marginally in red

Indian benchmark indices trimmed some of their early losses but continued to trade in red in afternoon session due to selling in frontline blue chip stocks such as Sun Pharma Inds, ITC and Tata Motors among other. The sentiments were pessimistic after the U.S. Federal Reserve raised its key interest rate for the first time in 2016 and also hinted at a more aggressive pattern of rate increases next year. Traders also remained cautious with global rating agency Standard & Poor's statement that demonetisation has cast a shadow over the RBI's competence and independence, it further said that slow replacement of the abolished bills has sparked a shortage of cash that has hit large parts of the economy. Besides, depreciation in Indian rupee against the dollar too weighed down sentiments. Indian rupee was trading lower by 35 paise at 67.79 against the dollar at this point of time on sustained foreign fund outflows amid increased demand for the US currency from importers. However, losses remained capped with Prime Minister Narendra Modi’s statement that presently, cleaning the system from black money and corruption is very high on his agenda and added that India is currently witnessing an economic transformation. In scrip specific development, ONGC was down after a news report said that the government may ask oil companies to increase prices in protracted manner.

On the global front, Asian markets were trading mostly in red following the US Federal Reserve announcing its first interest rate increase this year. The US central bank raised its benchmark interest rate by 25 basis points to between 0.50% and 0.75%, the second rate increase in a decade.

The BSE Sensex is currently trading at 26582.30, down by 20.54 points or 0.08% after trading in a range of 26407.58 and 26737.86. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.01%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were IT up by 1.43%, TECK up by 1.03%, Power up by 0.40%, Realty up by 0.30% and Metal up by 0.25%, while FMCG down by 0.83%, Oil & Gas down by 0.57%, Consumer Durables down by 0.47%, PSU down by 0.08% and Capital Goods down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.40%, Power Grid Corpn. up by 1.40%, Infosys up by 1.06%, Bajaj Auto up by 0.96% and Mahindra & Mahindra up by 0.74%. On the flip side, Sun Pharma Inds. down by 2.07%, ITC down by 1.31%, Tata Motors down by 1.30%, Bharti Airtel down by 1.22% and Cipla down by 0.99% were the top losers.

Meanwhile, different sections of the government have slowly been conceding the fact of adverse impact of demonetization on the economy; the latest is commerce secretary Rita Teaotia who ahead of the release of the merchandise exports data for November, has said that the country’s exports will likely face a temporary “slowdown” due to the cash crunch following the announcement of demonetisation on November 8.

She said that the demonetisation process, as has been pointed out, may cause a momentary setback (to) or momentary slowdown (in exports). She however stated that demonetisation should be viewed as an opportunity for capitalising “on the benefits that we can get from a far more transparent, far more open and far less messy cash-based transactions. She added that the commerce ministry has initiated a broader consultative process with all export promotion councils to gauge the level of adaptation to demonetisation. She pointed that the engineering sector is actually leading the reversal of the decline of exports over the last two years and has allowed us in October to register a growth of 9.6 per cent overall in the exports from India.

Merchandise exports witnessed a rise in only three of the past 23 months through October. Small and medium enterprises, who deal mostly in cash, have been particularly worried after demonetisation. India's exports are expected to reach $ 280 billion by the end of this fiscal as against $ 261.13 billion in 2015-16.

The CNX Nifty is currently trading at 8177.15, down by 5.30 points or 0.06% after trading in a range of 8121.95 and 8225.90. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.37%, HCL Tech. up by 1.65%, Power Grid Corpn. up by 1.26%, Indusind Bank up by 1.18% and Infosys up by 1.12%. On the flip side, Sun Pharma Inds. down by 2.02%, Tata Motors down by 1.48%, Ultratech Cement down by 1.48%, Ambuja Cement down by 1.41% and Bharti Airtel down by 1.35% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 447.89 points or 1.99% to 22,008.73, Shanghai Composite was down by 29.96 points or 0.95% to 3,110.58, Jakarta Composite declined 9.3 points or 0.18% to 5,253.51, Taiwan Weighted shed 8.17 points or 0.09% to 9,360.35, FTSE Bursa Malaysia KLCI decreased 7.08 points or 0.43% to 1,636.21 and KOSPI Index was down by 0.22 points or 0.01% to 2,036.65. On the flip side, Nikkei 225 was up by 20.18 points or 0.1% to 19,273.79.