Benchmarks continue weak trade in late morning session

Indian equity benchmarks extended their seven-day losing run in late morning session on account of selling in front line blue chip counters. Other Asian markets were also trading on a subdued note after US stocks took a breather from its relentless rise since the US election, while the dollar hovered below its 14-year high set earlier this week. Back home, investors were booking profits due to lack of clear domestic triggers and persisting worries about the impact from the ban on higher value banknotes on the economy and corporate profits. Foreign institutional investors continued to sell Indian shares. On Thursday, FIIs sold shares worth Rs 614 crore. Foreign institutional investors have sold over $250 million in Indian shares this month as of December 20. The share of foreign portfolio investments (FPI) through participatory notes (P-notes) slipped to its lowest level in nearly three years to Rs 1.79 lakh crore in end-November. According to Securities and Exchange Board of India (SEBI) data, P-Notes investments have fallen to a 33-months low. Traders were seen piling position in Consumer Durables and Oil & Gas stocks, while selling was witnessed in Power, Metal and FMCG sector stocks. In scrip specific development, JBM Auto inched up on announcement that a meeting of Board of Directors is scheduled to be held on December 29, 2016, to re-consider the proposal for various fund raising options including through Qualified Institutions Placement subject to taking of shareholders’ approval. Hinduja Ventures was trading in green after it announced divestment of its stake in Hinduja Energy. The company at its meeting held December 22, has approved the disinvestment of 4,36,47,056 equity shares of Rs 10 each held by the company in Hinduja Energy (India), in tranches, as per independent valuation of Rs 31.58 per share to third party.

On the global front, Asian shares were trading mostly in red, as the stocks stepped back in subdued trade ahead of holiday season. Japan’s stock exchange was closed on account of ‘Emperor’s Birthday’ holiday. The index has posted seven straight weeks of gains, its longest winning streak since early 2013, boosted by the yen’s weakness in the face of a surging dollar. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,000 and 26,000 levels respectively. The market breadth on BSE was negative in the ratio of 820:1168, while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 25904.77, down by 74.83 points or 0.29% after trading in a range of 25872.38 and 26007.16. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.57%, while Small cap index was down by 0.38%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.38% and Oil & Gas up by 0.28%, while Power down by 0.99%, Metal down by 0.93%, FMCG down by 0.83%, TECK down by 0.77% and Auto down by 0.76% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.51%, Bajaj Auto up by 0.64%, ONGC up by 0.51%, HDFC up by 0.50% and ICICI Bank up by 0.32%.

On the flip side, Mahindra & Mahindra down by 1.71%, Tata Motors down by 1.53%, Power Grid down by 1.43%, Adani Ports & Special Economic zone down by 1.33% and ITC down by 1.28% were the top losers.

Meanwhile, NITI Ayog vice-chairman Aravind Panagariya has named Prime Minister Narendra Modi's demonetisation scheme as a “frontal attack” on black money and said that this is not last step to curb corruption as more actions are in store.

Panagariya said 'if you are asking that demonetisation is the last step to curb corruption, then I will say no. I think more actions will be taken, but in terms of taking action against the existing black money and also in changing the roles, and the policy regime in such a way that future accumulation of black money is also discouraged, so we need to do both'. He added that the discussions are under way on the budget, and hopefully they will see some action in the upcoming budget. He also stated that the Union Finance minister had already committed to streamline the corporate income tax and hopefully some progress would be made. Therefore, he said that simplification of some taxes, reduction in the tax rate and these should also discourage the accumulation of black money.

On the negative impact of demonetisation on the people, he said that people have been with the Prime Minister despite hardships and they are also observing that he is doing it ultimately for the benefit of the country. He also said that in fact the government has done a frontal assault on black money and people are generally supporting it. He expects demonetisation to bring significant tax gains going ahead, and help the economy bounce back strongly in the years ahead.

The CNX Nifty is currently trading at 7951.00, down by 28.10 points or 0.35% after trading in a range of 7942.05 and 7985.45. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.59%, Bosch up by 0.75%, Bajaj Auto up by 0.71%, HDFC up by 0.61% and Hero MotoCorp up by 0.60%.

On the flip side, Zee Entertainment down by 2.50%, Tata Power down by 2.27%, Ultratech Cement down by 2.23%, Eicher Motors down by 1.87% and Mahindra & Mahindra down by 1.81% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 125.64 points or 0.58% to 21,510.56, Taiwan Weighted decreased 28.7 points or 0.31% to 9,090.05, Shanghai Composite decreased 24.09 points or 0.77% to 3,115.47, FTSE Bursa Malaysia KLCI decreased 4.02 points or 0.25% to 1,619.18 and KOSPI Index decreased 0.33 points or 0.02% to 2,035.40.

On the other hand, Jakarta Composite increased 28.02 points or 0.56% to 5,070.89.