Benchmarks continue to trade flat in late afternoon session

Indian equity benchmarks continued to trade flat in late afternoon session on the back of selling pressure in Capital Goods and Banking counters. Sentiments also remained pessimistic with a major central revenue body asking Finance Minister Arun Jaitley not to implement Goods and Services Tax (GST) in a hurry and threatened to take legal recourse in case their concerns are not addressed, claiming that demonetisation has affected country’s growth. However, traders took encouragement with Finance ministry’s statement that demonetisation will lead to a wider tax base and lower interest rates, thus paving the way for sustainable faster economic growth.

On the global front, European markets were trading in red as the U.S. dollar retreated against most of its peers, including the euro and pound, after Donald Trump's inaugural speech. Asian markets were trading mostly in green following a positive lead from Wall Street, though Japan's Nikkei tanked as the greenback slipped against the yen. Back home, in scrip specific development, Rashtriya Chemicals and Fertilizers (RCF) was trading in green after the company issued Commercial Paper for Rs 180 crore on January 23, 2017, in favour of State Bank of India, having maturity date as March 30, 2017 and United Spirits was trading higher after the company reported a jump of around four-fold in its net profit at Rs 147.70 crore for third quarter ended December 31, 2016, as compared to Rs 37.23 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 27044.95, up by 10.45 points or 0.04% after trading in a range of 26963.58 and 27167.79. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.03%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Metal up by 1.65%, Oil & Gas up by 0.91%, PSU up by 0.89%, FMCG up by 0.86% and Realty up by 0.54%, while Capital Goods down by 1.13% and Bankex down by 0.35% were the few losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.22%, ITC up by 1.49%, Lupin up by 1.35%, ONGC up by 1.22% and Tata Motors up by 1.19%. On the flip side, ICICI Bank down by 2.45%, Larsen & Toubro down by 2.09%, Axis Bank down by 1.54%, Bharti Airtel down by 1.23% and Dr. Reddys Lab down by 1.14% were the top losers.

Meanwhile, the credit rating agency Crisil has described the official data on index of industrial production (IIP) for November 2016, during which demonetisation was announced, as a false positive. India’s factory output that had fallen by 1.8 per cent in October; suddenly rose by 5.7 per cent in November it. The rating agency has said that November figures do not reflect the true condition of the Indian manufacturing sector.

Crisil further stated that a term false positive implies that the growth rate indicated is too high. However, it was expected to be in the negative zone as November was the first month to have captured the impact of demonetisation. It also pointed that the IIP base year has not been updated and the index of industrial production grew by 5.7 per cent on-year in November, on account of a weak base.

The rating agency said that such month-to-month the data is too volatile, it cannot be used to make long-term projections. It added that going by the production trend in some sectors such as auto, next month’s (December) IIP growth data may be more indicative of the impact of demonetisation.

The CNX Nifty is currently trading at 8357.90, up by 8.55 points or 0.10% after trading in a range of 8327.20 and 8404.15. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.79%, Grasim Industries up by 2.08%, GAIL India up by 2.05%, Zee Entertainment up by 1.89% and ITC up by 1.49%. On the flip side, ICICI Bank down by 2.45%, Larsen & Toubro down by 2.12%, Axis Bank down by 1.74%, Bharti Infratel down by 1.61% and Aurobindo Pharma down by 1.42% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 0.38 points or 0.02% to 2,065.99, Jakarta Composite increased 3.92 points or 0.07% to 5,258.23, FTSE Bursa Malaysia KLCI increased 7.82 points or 0.47% to 1,672.71, Hang Seng increased 12.61 points or 0.06% to 22,898.52, Shanghai Composite increased 13.64 points or 0.44% to 3,136.78 and Taiwan Weighted increased 92.59 points or 0.99% to 9,424.05. On the flip side, Nikkei 225 decreased 246.88 points or 1.29% to 18,891.03.

All European markets were trading in red; Germany’s DAX decreased 103.11 points or 0.89% to 11,527.02, UK’s FTSE 100 decreased 63.01 points or 0.88% to 7,135.43 and France’s CAC decreased 41.38 points or 0.85% to 4,809.29.