Benchmarks continue lackluster trade in late afternoon session

The key Indian equity indices continued their lackluster trade in late afternoon session as a slump in IT shares on worries over H-1B visas. Sentiments remained downbeat on account of selling in Realty, TECK and FMCG counters. Selling pressure increased after European stocks opened lower. Sentiments were also hit after President Pranab Mukherjee cautioned that the government's demonetisation decision could likely lead to a temporary slowdown in the economy and hurt the poor. Sentiments also remained dampened with a private report highlighted that India’s GDP is likely to have grown at a much slower-than-expected pace of 5 percent in the October-December period and may see a 6 percent growth in the following quarter due to a slowdown in manufacturing and services sectors post demonetization.

On the global front, European markets were trading in red as investors keep a close eye on commodity prices and currency movements. Asian markets were trading mixed, Chinese and Japanese shares ended in the red, tracking exchange rate fluctuations ahead of the closely-watched U.S. jobs report due tonight. While China's yuan gave up some gains after a two-day surge, the Japanese yen strengthened further against the dollar on expectations of slow pace of rate hikes in the U.S. Back home, in scrip specific development Indo Borax was trading in green on plan to restart production activity at Pithampur plant from January 06, 2017. Earlier, the company had shut down its plant on December 20, 2016 for clearance of inventory. Mastek edged higher after the company’s wholly owned subsidiary Digility Inc. acquired of US-based leading digital commerce solution provider, TAISTech.

The BSE Sensex is currently trading at 26847.21, down by 31.03 points or 0.12% after trading in a range of 26822.52 and 27009.61. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.13%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were Bankex up by 1.07%, Metal up by 0.69%, PSU up by 0.56%, Power up by 0.33% and Oil & Gas up by 0.29%, while IT down by 2.38%, TECK down by 1.91%, FMCG down by 0.73%, Realty down by 0.49%, and Capital Goods down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.68%, Asian Paints up by 1.37%, Dr. Reddys Lab up by 1.33%, HDFC up by 0.83% and HDFC Bank up by 0.79%. On the flip side, Infosys down by 2.35%, TCS down by 2.34%, Wipro down by 1.66%, ITC down by 1.58% and Maruti Suzuki down by 0.71% were the top losers.

Meanwhile, for the first time since demonetisation of high-value currency notes, President Pranab Mukherjee has cautioned that the government's demonetisation decision could likely lead to a temporary slowdown in the economy and hurt the poor. Addressing to Governors and Lieutenant Governors, President has said that demonetisation, while immobilising black money and fighting corruption, may lead to temporary slowdown of the economy.

On the effects of demonetisation among the poor, the President said that extra care must be taken to alleviate sufferings of the poor triggered by economic slowdown which has become unavoidable post demonetisation. The President said that he appreciates the thrust on transition from entitlement approach to an entrepreneurial one for poverty alleviation, but he is not too sure that the poor can wait that long. He added that they need to get succor here and now, so that they can also participate actively in the national march toward a future devoid of hunger, unemployment and exploitation.  He also said that the recent package announced by the Prime Minister Narendra Modi including major tax rebates for farmers, small traders, senior citizens and women will provide some relief to them.

Mukherjee termed 2016 as a year of mixed fortunes and said that it began on a very promising note with the economy performing well, overcoming the weak global economic trends. GDP growth of 7.2% in the first half of 2016-17 same as that of last year is a pointer to the fact that our economic recovery has been on solid grounds. In 2014 and 2015 below normal rains had caused rural distress. A good monsoon in 2016 is expected to improve agricultural production and increase rural employment and incomes.

The CNX Nifty is currently trading at 8265.30, down by 8.50 points or 0.10% after trading in a range of 8257.75 and 8306.85. There were 31 stocks advancing against 19 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Yes Bank up by 2.96%, ONGC up by 2.88%, Bank of Baroda up by 1.95%, Kotak Mahindra Bank up by 1.78% and Bharti Infratel up by 1.76%. On the flip side, HCL Tech. down by 3.50%, Tech Mahindra down by 3.17%, Idea Cellular down by 2.74%, TCS down by 2.33% and Infosys down by 2.29% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 7.17 points or 0.35% to 2,049.12, FTSE Bursa Malaysia KLCI increased 11.87 points or 0.72% to 1,671.69, Taiwan Weighted increased 14.08 points or 0.15% to 9,372.22, Jakarta Composite increased 21.02 points or 0.39% to 5,346.53 and Hang Seng increased 46.32 points or 0.21% to 22,503.01. On the flip side, Nikkei 225 decreased 66.36 points or 0.34% to 19,454.33 and Shanghai Composite decreased 11.09 points or 0.35% to 3,154.32.

All European markets were trading in red; Germany’s DAX decreased 19.18 points or 0.17% to 11,565.76, France’s CAC decreased 18.79 points or 0.38% to 4,881.85 and UK’s FTSE 100 decreased 9.61 points or 0.13% to 7,185.70.