Sensex, Nifty starts trading marginally in red in noon deals

Indian equities erased early gains and started trading marginally in red in afternoon session on account of selling in frontline blue chip counters. The sentiments were pessimistic after the report that India's services industry contracted for a second month in a row in December as orders shrank amid a severe cash shortage. The Nikkei/Markit Services Purchasing Managers' Index was little changed at 46.8 in December from November's 46.7 (a reading below 50 indicates contraction).A new business sub-index, an indicator of domestic and foreign demand, fell to a 39-month low of 46.0 in December from 46.7, even though firms cut prices of their goods despite input costs rising at a faster pace. Besides, there was concern with April 1 deadline for GST rollout likely getting missed after the all-powerful GST Council meeting on January 3, got struck over states demanding taxation rights for sales in high seas and higher compensation to deal with loss in revenues. However, losses remained capped as sentiments got some support with the industry body, Associated Chambers of Commerce and Industry of India’s (Assocham) statement to drive economic growth, which said that the focus should now be on effective implementation of the steps announced by Prime Minister Narendra Modi in his address to the nation on New Year's Eve, as they are extremely positive for the Indian economy. In scrip specific development, Sudarshan Chemical Industries was trading in green after the company successfully commissioned the COGEN plant of 8.24 megawatt capacity at its Roha site. This will make the company self-reliant towards power & steam generation, for future expansion of production lines.

On the global front, Asian markets were trading mostly in green following the overnight gains on Wall Street and as upbeat economic data from the U.S., China and Europe boosted optimism for global economic growth. Crude oil prices rebounded in Asian trades after falling overnight.

The BSE Sensex is currently trading at 26630.56, down by 12.68 points or 0.05% after trading in a range of 26606.06 and 26723.37. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.05%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.78%, Consumer Durables up by 0.61%, TECK up by 0.57%, IT up by 0.57% and Realty up by 0.46%, while Bankex down by 0.43%, FMCG down by 0.41% and Oil & Gas down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.40%, Tata Motors up by 1.34%, Wipro up by 1.17%, Bajaj Auto up by 0.98% and Coal India up by 0.88%. On the flip side, Reliance Industries down by 1.42%, Hindustan Unilever down by 1.11%, Cipla down by 0.92%, Lupin down by 0.92% and SBI down by 0.63% were the top losers.

Meanwhile, expressing hope that the country will recover in FY18, Vice-Chairman of the NITI Aayog, Arvind Panagariya has said that the second half of the current fiscal will see some decline in the growth due to demonetisation of high value currency notes, but the country would make up for growth rate decline in FY 2017-18.

Panagariya said “in the quarter in which the demonetisation decision was made and possibly even the quarter that follows which will be the last quarter of the fiscal 2016-17, we might see some decline in the growth rate.” He also said that demonetisation impact on the economy will be small and whatever is the loss, the government will recover it in the next fiscal.

Commenting about government's plan on providing big stimulus post-demonetisation, Panagariya said that it is too early to jump on any conclusion and one must wait to see the economic impact of demonetisation. He further said that some room for increased expenditure may nevertheless come from higher revenues and that is generally a good news.

The CNX Nifty is currently trading at 8189.45, down by 2.80 points or 0.03% after trading in a range of 8180.90 and 8218.50. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.18%, HCL Tech. up by 1.60%, Tech Mahindra up by 1.59%, ONGC up by 1.58% and Tata Motors up by 1.34%. On the flip side, ACC down by 1.70%, Kotak Mahindra Bank down by 1.62%, Eicher Motors down by 1.35%, Reliance Industries down by 1.34% and Hindustan Unilever down by 1.11% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 1.67 points or 0.08% to 2,045.64, FTSE Bursa Malaysia KLCI rose 7.58 points or 0.46% to 1,643.11, Taiwan Weighted was up by 14.08 points or 0.15% to 9,286.96, Shanghai Composite added 18.84 points or 0.6% to 3,154.76 and Nikkei 225 increased 479.79 points or 2.51% to 19,594.16. On the flip side, Hang Seng decreased 56.37 points or 0.25% to 22,094.03 and Jakarta Composite was down by 9.85 points or 0.19% to 5,266.13.