Indian frontline indices end a lackluster session with modest cut

Indian equity markets commenced the week on a sluggish note as frontline indices showcased an unenthusiastic performance on Monday and finished the session on a dull note, marginally below the neutral line, as investors at large remained reluctant to build on long positions ahead of government's Budget session, which will start tomorrow with the Economic Survey of India and Annual Budget presentation for financial year 2017-18 by the Finance Minister Arun Jaitley on Wednesday. Sentiments remained subdued with Former Finance Minister P Chidambaram’s statement that cash crunch in the wake of demonetisation is still continuing in many places in the country even though it has eased to an extent in the metros. Broader sentiment was also hit by fears about the impact of US President Donald Trump's immigration curbs. Trump on Friday signed an executive order that suspends the arrival of refugees for at least 120 days and bars visas for travelers from seven Muslim majority countries including Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen for the next three months. The downside risk for the frontline indices was limited by Union Finance Minister Arun Jaitley’s statement that the implementation of the Goods and Services Tax (GST), along with demonetisation will bring more revenues as far as states and the central government is concerned and enlarges the size as far as the formal economy is concerned. Giving some comfort to investors , the Central Board of Direct Taxes in clarifications on GAAR, said that the adequate procedural safeguards are in place to ensure that General Anti-Avoidance Rules (GAAR), which seeks to prevent companies from routing transactions through other countries to avoid taxes, are invoked in a uniform, fair and rational manner. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 211.77 crore on January 27, 2017.

On the global front, Asian equity markets ended in red on Monday, as investors digested lackluster US GDP data and the US immigration ban on seven predominantly Muslim countries. The immigration curbs introduced by US President Donald Trump heightened concerns about the impact of the new administration's policies on trade and the economy. Eyes are now on the Friday release of US jobs data for January, which comes a week after figures showing US growth reached a sluggish 1.9 percent in October-December, well below the 3.5 percent in the third-quarter and below expectations. Meanwhile, European stock markets slid on Monday as traders began the week on a sour note, while Wall Street appeared headed for a weaker opening, with e-mini futures contracts on the S&P 500 stocks index down 0.2 percent.

Back home, after getting a cautious start, the local benchmarks kept losing steam and drifted to the lowest point in the session in mid morning trades. Thereafter, the indices kept oscillating in a narrow range through the day’s trade. Eventually, the NSE’s 50-share broadly followed index - Nifty settled with trivial losses of eight points below the psychological 8,650 level, while Bombay Stock Exchange’s Sensitive Index - Sensex shed thirty two points and closed below the psychological 27,850 mark. The market breadth remained pessimistic, as there were 1164 shares on the gaining side against 1558 shares on the losing side, while 245 shares remained unchanged.

Finally, the BSE Sensex declined 32.90 points or 0.12% to 27849.56, while the CNX Nifty was down by 8.50 points or 0.1% to 8,632.75. 

The BSE Sensex touched a high and a low of 27947.37 and 27813.32, respectively and there were 11 stocks on gainers side against 19 stocks on the losers side on the index.

The broader indices made a mixed closing; the BSE Mid cap index jumped 0.28%, while Small cap index was down by 0.32%.

The only gaining sectoral index on the BSE was TECK up by 0.81%, while Auto down by 0.88%, Bankex down by 0.76%, PSU down by 0.69%, Power down by 0.58% and Consumer Durables down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 7.48%, Reliance Industries up by 1.85%, Sun Pharma up by 0.81%, Asian Paints up by 0.71% and Infosys up by 0.66%. On the flip side, Tata Motors down by 2.18%, Tata Steel down by 1.56%, ONGC down by 1.42%, SBI down by 1.31% and Hero MotoCorp down by 1.11% were the top losers.

Meanwhile, the road, transport, highways and shipping minister Nitin Gadkari has said that government is focusing on enhancing infrastructure sector, mainly ports, roads and waterways in order to reduce logistics cost. He has said that logistics cost is very high in the country that is 18 percent. He added that it is easy to take any material from Mumbai to Dubai or from Mumbai to London, but it is very difficult to take material from Mumbai to Delhi as it is costly and complicated. Therefore, he said that they want to give highest priority to that on how they can reduce this cost. He also made a pitch for port-led development which is essential for higher economic growth.

The minister has expressed his hope that the target of 40 km of road construction per day will be achieved by next year. He said that it was 2 km per day, last year, it was 18 km per day and by the end of this March, it will be 30 km per day. But their target was 40 km per day, and he is confident that next year, they will complete that target and added that the government will complete 2 lakh km National Highway on time. He also said that by December-end the ministry has finalised contracts worth $80 billion.

About ports and shipping, Gadkari said that contracts worth Rs 1 lakh crore have been finalized in order to give a push to the sector. He said that most important for development is port led development and they have Sagarmala as a big investment project. He added that they have already started work on Rs 1 lakh crore. Minister noted that last year, the three flagships including Cochin Shipyard, Shipping Corporation of India and Dredging Corporation have recorded profit of Rs 6,000 crore and for this year, they are expecting profit of about Rs 7,000 crore and they are going to invest this profit.

The CNX Nifty traded in a range of 8,662.60 and 8,617.75. There were 18 stocks in green against 33 stocks in red on the index.

The top gainers on Nifty were Idea Cellular up by 25.64%, Bharti Airtel up by 7%, Grasim Industries up by 4.38%, Reliance Industries up by 1.94% and Tech Mahindra up by 1.07%. On the flip side, Bharti Infratel down by 7.46%, Aurobindo Pharma down by 2.47%, Tata Motors down by 1.7%, Tata Steel down by 1.51% and Tata Motors - DVR down by 1.42% were the top losers.

The European markets were trading in red; UK’s FTSE 100 decreased 54.91 points or 0.76% to 7,129.58, Germany’s DAX decreased 76.84 points or 0.65% to 11,737.43 and France’s CAC decreased 44.15 points or 0.91% to 4,795.83.

Asian equity markets ended in red on Monday, as investors digested lackluster US GDP data and the US immigration ban on seven predominantly Muslim countries. The immigration curbs introduced by US President Donald Trump heightened concerns about the impact of the new administration's policies on trade and the economy. Data on Friday showed that the US economy grew less-than-expected during the final quarter of the year as the annualized quarter-on-quarter rate was 1.9% versus the 2.2% estimate and 3.5% the previous quarter. Caution ahead of monetary policy decisions in the US, UK and Japan as well as Chinese manufacturing data and US jobs data due this week also kept investors nervous. Japanese shares ended lower as a firmer yen clouded the outlook for exporters. Reports showed Japanese retail sales grew 0.6 percent in December from a year earlier, gaining for a second straight month but falling below forecasts for a 1.7 percent gain. Markets in China, Hong Kong, Malaysia, Singapore, South Korea and Taiwan were shut on Monday for the Lunar New Year holidays.