Benchmarks continue to trade under pressure

Indian equity benchmarks continued their weak trade in late morning session on account of selling in frontline blue chip counters. Benchmark indices continued to reel under selling pressure amid volatility as investors maintained cautious stance ahead of inauguration speech of Donald Trump as US President later today coupled with disappointing Axis Bank’s earnings. Some pressure also crept in following a private poll report that economy lost momentum in the final three months of 2016 after Prime Minister Narendra Modi’s ban on high-value notes hurt consumption and businesses but it is set to pick up this quarter. Having posted growth of above 7 percent for six consecutive quarters, India’s gross domestic product is expected to have expanded just 6.5 percent in the October-December quarter - the weakest in nearly three years. The downside was capped taking encouragement with report that India is emerging as the sweet spot along with neighbour China to rev up the global economic growth at the World Economic Forum (WEF) Annual meet in Davos. Along with China, India was also applauded as a major driving force for world growth with leaders and economists emphasizing the need for increased regional cooperation.

Stocks of IT and Pharma companies could see some pressure ahead of Donald Trump’s swearing-in as US President. The cautious sentiment in the market, coupled with talk of pricing pressure on Pharma, and new H1B norms for IT companies could affect these stocks. Mixed reactions were seen in cement counters with the competition watchdog holding seven cement companies guilty of bid rigging and cartelization and imposed a total fine of nearly Rs 206 crore on them. The companies are Shree Cement, UltraTech Cement, Jaiprakash Associates, JK Cement, Ambuja Cements, ACC and JK Lakshmi Cement. The ruling relates to a tender floated by a Haryana agency in 2012. Traders were seen piling position in FMCG and Realty stocks, while selling was witnessed in Bankex, IT and Oil & Gas sector stocks. In scrip specific development, Motherson Sumi Systems was trading in green as the company agreed to buy Finnish truck wire maker PKC Group for 571 million euro ($609 million).

On the global front, Asian shares were trading mostly in red, even as China’s fourth-quarter economic growth beat expectations and Federal Reserve Chair Janet Yellen took a less hawkish policy stance. China’s economy grew a faster-than-expected 6.8 percent in the fourth quarter, boosted by higher government spending and record bank lending, giving it a solid tailwind heading into what is expected to be a turbulent 2017. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,450 and 27,300 levels respectively. The market breadth on BSE was negative in the ratio of 994:1160, while 143 scrips remained unchanged.

The BSE Sensex is currently trading at 27201.63, down by 106.97 points or 0.39% after trading in a range of 27176.32 and 27264.41. 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 0.19%, while Small cap index was down by 0.05%.

The top gaining sectoral indices on the BSE were FMCG up by 0.21% and Realty up by 0.04%, while Bankex down by 0.76%, IT down by 0.61%, Oil & Gas down by 0.58%, PSU down by 0.53% and Power down by 0.50% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.45%, Cipla up by 1.32%, Asian Paints up by 0.93%, HDFC Bank up by 0.66% and Bajaj Auto up by 0.48%.

On the flip side, Axis Bank down by 5.55%, ICICI Bank down by 1.85%, Power Grid down by 1.16%, Infosys down by 0.93% and Tata Motors down by 0.91% were the top losers.

Meanwhile, in order to develop an India Innovation Index that will provide impetus to Indian states to drive the innovation spirit, the World Economic Forum, NITI Aayog, the World Intellectual Property Organization and the Cornell University have come together. The index will be based on key pillars of innovation and sub-indices that together will assist in tailoring policies that promote inclusive growth. The pillars include the strength of institutions, capacity of human capital and research, supporting infrastructure and the level of business sophistication among others.

The index will measure and rank the innovation performance of all Indian states with an aim of moving India towards an innovation-driven economy. Each partnering organisation will nominate a working group member to work on the index. The first ranking is expected to be released at the India Economic Summit in New Delhi on October 4-6, 2017.

Prime Minister Narendra Modi has said that the competitive and cooperative federalism is key to India's progress and added that this index will encourage states to compete with each other and, in turn, lead to better policies for inclusive growth.

The CNX Nifty is currently trading at 8407.20, down by 27.90 points or 0.33% after trading in a range of 8397.05 and 8423.65. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 3.03%, Bharti Airtel up by 2.27%, Yes Bank up by 1.82%, Cipla up by 1.32% and Grasim Industries up by 1.09%.

On the flip side, Axis Bank down by 5.69%, Tata Motors - DVR down by 1.97%, ICICI Bank down by 1.85%, Bharti Infratel down by 1.47% and Power Grid down by 1.04% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 157.25 points or 0.68% to 22,892.71, Jakarta Composite decreased 31.3 points or 0.59% to 5,267.65, KOSPI Index decreased 3.82 points or 0.18% to 2,068.97 and FTSE Bursa Malaysia KLCI decreased 1.26 points or 0.08% to 1,665.25.

On the other hand, Taiwan Weighted increased 17.39 points or 0.19% to 9,335.51, Shanghai Composite increased 18.69 points or 0.6% to 3,119.99 and Nikkei 225 increased 71.44 points or 0.37% to 19,143.69.