Indian bourses continue to trade in negative terrain

Indian bourses continued their trade in negative terrain in the afternoon session with frontline gauges trading below their crucial 26,500 (Sensex) and 8,150 (Nifty) levels. The sentiments were pessimistic after India's trade deficit widened to $13 billion in November from a provisional $10.16 billion last month, it’s the highest since $13.08 billion in July 2015, and sharply wider than the $10.41 billion gap in October. Though, for the third consecutive month, exports recorded a positive growth of 2.29 per cent year-on-year to $20 billion, but imports grew at a faster pace of 10.4 percent to $33.02 billion. Meanwhile, the losses in Metal, Oil & Gas, PSU and Banking stocks also aided to pessimistic milieu. However, downside remained capped after Chief economic Advisor (CEA) Arvind Subramanian said that India is better equipped than other emerging markets to weather the impact of higher US interest rates because of its stronger economic growth and record high foreign exchange reserves of more than $300 billion. In scrip specific development, Tata Communications was up by around four percent after the company received unconditional approval from the Independent Communications Authority of South Africa for acquisition of Neotel by Liquid Telecom.

On the global front, Asian markets were trading mostly in red as investors adjusted to the Federal Reserve's plan for higher U.S. interest rates. Back home, the BSE Sensex is currently trading at 26470.54, down by 48.53 points or 0.18% after trading in a range of 26455.21 and 26594.55. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.39%, while Small cap index was down by 0.15%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.75%, IT up by 0.36%, Auto up by 0.31% and TECK up by 0.28%, while Metal down by 1.43%, Oil & Gas down by 0.91%, PSU down by 0.70%, Bankex down by 0.62% and FMCG down by 0.53% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.29%, Infosys up by 0.89%, HDFC up by 0.76%, Maruti Suzuki up by 0.66% and TCS up by 0.41%. On the flip side, ONGC down by 1.86%, Adani Ports &Special down by 1.67%, Bharti Airtel down by 1.49%, Tata Steel down by 1.49% and ICICI Bank down by 1.40% were the top losers.

Meanwhile, industry body, Confederation of Indian Industry (CCI) has stated that India’s bid to flush out black money, will lead to significant fall in the economic growth in the second half of the current fiscal. CII President Naushad Forbes said that 'There is no doubt that in this quarter and the next there will be a significant fall in GDP growth.

CII President said that there has been a negative impact on jobs in the informal sector which relies on cash payments to workers. The consumer goods sector has also seen significant drop in sales by 20 per cent. Though, he separately said that the CII jobs report suggests strategy shifts over 10 years. We have incorporated digitalisation and expect its impact over the longer term will be beneficial. Demonetisation will lead to better jobs less dependent on cash transactions.

The government had scrapped high value Rs. 500 and Rs. 1000 notes in its effort to bring back black money leading to cash crunch as short supply of new currency. This has led to a major negative impact on jobs especially in the informal sector which relies on cash payment to workers. The reserve bank of India had also cut the forecast for economic expansion of the country from 7.6 percent to 7.1 percent due to short term interruption in the country and compression in demand due to demonetisation.

The CNX Nifty is currently trading at 8128.85, down by 24.75 points or 0.30% after trading in a range of 8127.45 and 8178.70. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.72%, Zee Entertainment up by 1.44%, Bharti Infratel up by 1.01%, Infosys up by 0.96% and HDFC up by 0.90%. On the flip side, Hindalco down by 3.58%, Aurobindo Pharma down by 3.08%, ONGC down by 1.91%, Bharti Airtel down by 1.65% and Tata Power down by 1.60% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 33.57 points or 0.36% to 9,326.78, Jakarta Composite declined 12.57 points or 0.24% to 5,241.79, FTSE Bursa Malaysia KLCI was down by 2.97 points or 0.18% to 1,634.02 and Hang Seng shed 2.95 points or 0.01% to 22,056.45. On the flip side, Shanghai Composite increased 3.79 points or 0.12% to 3,121.47, KOSPI Index rose 5.59 points or 0.27% to 2,042.24 and Nikkei 225 was up by 127.36 points or 0.66% to 19,401.15.