Benchmarks see-saw; FMCG, Realty stocks led some support

In the extremely range-bound session of trade, Indian equity indices altering between green and red territory, were now trading flat with bit of positive bias as investors and foreign funds were adopting a cautious approach, amid mixed trend in other Asian markets. Market participants got some confidence with Finance minister Arun Jaitley’s statement that the impact of demonetization on the economy would be “transient” but in the medium and long run, the GDP would be “bigger and cleaner” and it will also help lower interest rates. He also said that the Goods and Services Tax (GST), which will be implemented this year, will provide for better indirect tax administration.  Some support also came with the report that India has emerged as the most optimistic country globally in terms of business optimism as the country’s businesses are high on expectations of increasing revenue, employment, profitability. According to the report, there is an overall increase in global optimism which augurs very well for India in terms of attracting investments and providing markets for Indian products and services globally. However, gains remained capped on the report that Foreign investors pulled out more than $3 billion of the so-called 'hot money' from the Indian capital markets in 2016, making it the worst period in last eight years in terms of foreign investments. Furthermore, some traders turned jittery after the advance estimates of GDP data for fiscal year 2017, indicated a slowdown in growth even though the figures do not take into account the demonetisation impact. GDP growth is estimated to slow down to 7.1% in the current fiscal, from 7.6% in 2015-16, mainly due to slump in manufacturing, mining and construction sectors.

On the global front, Asian markets were trading mixed on Monday as investors caution grew before a news conference by President-elect Donald Trump on Wednesday, where his views on global trade and China will be carefully scrutinized for future policy implications. Sentiments also remained down-beat after US employment increased less than expected in December but a rebound in wages pointed to sustained labor market momentum that sets up the economy for stronger growth and further interest rate increases from the Federal Reserve this year. Nonfarm payrolls rose by 156,000 jobs last month, the US Labor Department said on Friday.

Back home, stocks from FMCG, Realty and Auto counters were supporting the markets’ uptrend, while those from Power, Oil & Gas and PSU counters were adding to the underlying cautious undertone. In scrip specific development, Aurobindo Pharma rallied after the company’s wholly owned step-down subsidiary, Agile Pharma BV, Netherland entered into an agreement to acquire 100% shareholdings in Generis Farmaceutica SA, a Portuguese pharmaceutical company engaged in the manufacture and marketing of pharma products in Portugal. Moreover, BEML has surged after the Cabinet given an ‘in-principle’ approval for strategic disinvestment of 26% equity shares in BEML out of the government’s shareholding of 54.03%.

The market breadth remained optimistic as there were 1474 shares on the gaining side against 931 shares on the losing side, while 96 shares remained unchanged.
The BSE Sensex is currently trading at 26772.34, up by 13.11 points or 0.05% after trading in a range of 26701.18 and 26860.88. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.58%.

The top gaining sectoral indices on the BSE were FMCG up by 0.70%, Realty up by 0.56%, Auto up by 0.41%, Capital Goods up by 0.33% and Bankex up by 0.29%, while Power down by 0.55%, Oil & Gas down by 0.30% and PSU down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.18%, ITC up by 1.17%, Maruti Suzuki up by 1.05%, Reliance Industries up by 0.71% and Tata Steel up by 0.60%. On the flip side, Dr. Reddys Lab down by 2.65%, Coal India down by 1.34%, Sun Pharma down by 1.21%, NTPC down by 1.16% and ONGC down by 1.14% were the top losers.

Meanwhile, Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, in its First Advance estimates of national income at constant (2011-12) and current prices, for the financial year 2016-17, has estimated that India’s per capita income, a gauge for measuring living standard, to cross Rs 1 lakh in 2016-17, up from Rs 93,293 in the previous fiscal. This is higher by 10.4 percent compared to Rs 93,293 during 2015-16. At constant prices, the growth rate in per capita income is estimated at 5.6 percent during 2016-17, as against 6.2 percent in the previous year.

Taking the financial, insurance, real estate and professional services into consideration, the estimated growth in GVA for this sector during 2016-17 is placed at 9.0 percent as compared to growth of 10.3 percent in 2015-16. However, the public administration and defence and other services had its GVA at basic prices for 2016-17 from this sector is expected to grow by 12.8 percent as compared to growth of 6.6 percent in 2015-16. For 2016-17, manufacturing sector is estimated to grow by 7.4 percent as compared to growth of 9.3 percent in 2015-16.

According to the first advance estimates, the growth in the ‘agriculture, forestry and fishing’, ‘mining and quarrying’, ‘electricity, gas, water supply and other utility services’, ‘construction’ and ‘Trade, hotels, transport, communication and services related to broadcasting’ is estimated to be 4.1 percent, (-)1.8 percent, 6.5 percent, 2.9 percent and 6.0 percent respectively. The CSO has said that India’s Gross Domestic Product (GDP) is expected to slow down to 7.1 percent during 2016-17 from 7.6 percent in the previous fiscal mainly due to slump in manufacturing, mining and construction activities.

The CSO projections on national income are in line with the Reserve Bank of India’s estimates, which too had lowered the GDP growth prospects to 7.1 percent. The CSO did not figure in the impact of demonetisation, effected on November 9 and the estimates are based on sectoral data available till October. The first advance estimates of GDP have been released in accordance with the release calendar of National Accounts with an approach for compiling the advance estimates is based on benchmark-indicator method. The second advance estimate of national income for 2016-17 and the quarterly GDP estimate for the October-December 2016 quarter will be released on February 28.

The CNX Nifty is currently trading at 8248.80, up by 5.00 points or 0.06% after trading in a range of 8227.75 and 8263.00. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Aurobindo Pharma up by 1.78%, Idea Cellular up by 1.51%, HCL Tech up by 1.45%, Eicher Motors up by 1.41% and BHEL up by 1.19%. On the flip side, Dr. Reddys Lab down by 2.77%, Coal India down by 1.45%, Sun Pharma down by 1.23%, NTPC down by 1.22% and Power Grid down by 1.19% were the top losers.

Asian markets were trading mixed; KOSPI Index gained 0.12%, Hang Seng increased 0.04% and Shanghai Composite was up by 0.56%. On the flip side, Taiwan Weighted decreased 0.27%, Jakarta Composite slipped 0.31% and FTSE Bursa Malaysia KLCI was down by 0.26%.