Benchmarks continue to trade marginally in red

Indian equities continued to trade marginally in red in afternoon session due to heavy selling in IT and TECK. Sentiments remained dampened with the private report indicating that India’s GDP growth numbers are expected to see a decline of 2% in the third and fourth quarters of the current fiscal, as effective currency in circulation has contracted significantly. The report stated that the government’s decision to abolish old stock of high denomination currency (demonetization) and issue new notes (remonetisation) could have a mixed impact on the macro economy over a year. Besides, depreciation in Indian rupee against the dollar too weighed down sentiments. Indian rupee was trading lower by 16 paise at 68.24 against the dollar at this point of time on sustained foreign fund outflows amid increased demand for the US currency from importers. However, losses remained capped as some support came with report that the Index of Industrial Production (IIP) rose to a 13-month high of 5.7% in November, belying expectations of an adverse impact from demonetization and against a contraction of 1.8% in October, mainly due to base effect. Also, the Inflation measured by the Consumer Price Index (CPI) eased to 3.41% in December versus 3.63% seen in November 2016, mainly due to softening of food prices. In scrip specific development, Bajaj Corp was up by around two and half percent on reporting 17.22% rise in its net profit at Rs 57.80 crore for the quarter under review as compared to Rs 49.31 crore for the same quarter in the previous year.

On the global front, Asian markets were trading mostly in red tracking the weak cues from Wall Street amid continued uncertainty about US President-elect Donald Trump's economic policies. Traders were also treading cautiously ahead of the release of Chinese trade data for the month of December later in the session. Meanwhile, crude oil extended gains in Asian trades.

The BSE Sensex is currently trading at 27227.34, down by 19.82 points or 0.07% after trading in a range of 27143.07 and 27459.75. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.08%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were FMCG up by 0.62%, Oil & Gas up by 0.34%, Bankex up by 0.14% and PSU up by 0.03%, while IT down by 1.67%, TECK down by 1.45%, Auto down by 0.72%, Power down by 0.58% and Metal down by 0.42% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.98%, GAIL India up by 2.15%, HDFC up by 2.11%, ONGC up by 1.78% and Sun Pharma up by 1.42%. On the flip side, TCS down by 3.34%, Infosys down by 2.04%, Tata Motors down by 1.50%, NTPC down by 1.41% and Maruti Suzuki down by 1.16% were the top losers.

Meanwhile, the United Nations International Labour Organisation (ILO) in its report titled '2017 World Employment and Social Outlook' has indicated that unemployment in India is likely to increase marginally in the financial year 2017-18, on the back of sluggishness in job creation in the country.

According to the report, unemployment in India is expected to increase from 17.7 million last year to 17.8 million in 2017 and 18 million in 2018. In proportion phrases, unemployment rate will stay at 3.4% in 2017-18.  It said that the country had performed slightly well in terms of job creation in 2016, when a 'majority' of the 13.4 million new employment created in Southern Asia occurred within the nation. Similarly, the report acknowledged that India's 7.6% growth in 2016 helped Southern Asia achieve 6.8% growth that year. It added that manufacturing growth has supported India's recent economic performance, which may help buffer demand for the region's commodity exporters.

The report further highlighted that world unemployment levels and rates are likely to stay high in the short term, as the worldwide labour pressure continues to grow. The worldwide unemployment rate is anticipated to rise modestly to 5.8% in 2017 from 5.7% in 2016, representing 3.4 million more unemployed people globally. It added that the increase in unemployment levels and rates in 2017 will be driven by deteriorating labour market conditions in emerging countries as the impacts of several deep recessions in 2016 continue to affect labour markets in 2017. It also noted that the number of unemployed people in emerging countries is expected to increase by approximately 3.6 million between 2016 and 2017.

The CNX Nifty is currently trading at 8394.10, down by 13.10 points or 0.16% after trading in a range of 8373.65 and 8461.05. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.03%, Aurobindo Pharma up by 2.25%, GAIL India up by 2.14%, HDFC up by 2.13% and ONGC up by 1.63%. On the flip side, TCS down by 3.42%, Hindalco down by 2.26%, Infosys down by 2.23%, Idea Cellular down by 1.52% and Tata Motors down by 1.51% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 31.35 points or 0.33% to 9,378.83, Shanghai Composite decreased 11.09 points or 0.36% to 3,108.20, KOSPI Index decreased 10.35 points or 0.5% to 2,076.79 and FTSE Bursa Malaysia KLCI decreased 2.41 points or 0.14% to 1,675.35.

On the flip side, Jakarta Composite increased 1.52 points or 0.03% to 5,294.27, Hang Seng increased 86.13 points or 0.38% to 22,915.15 and Nikkei 225 increased 152.58 points or 0.8% to 19,287.28.