Weak trade prevails in late morning session

Indian equity benchmarks continued their weak trade in the late morning session extending losses for the second straight day ahead of Economic Survey 2017-18 to be unveiled later today. The survey authored by Chief Economic Adviser Arvind Subramanian may talk about fiscal deficit targets, cash transaction tax on withdrawals and universal income tax. Market will take cues from the economic data such as GDP growth estimates, fiscal deficit numbers and tax figures etc available in the Economic Survey. Traders remained concerned with the CII - IBA Financial Conditions Index for Q4 (January-March) FY2016-17 recording a drop below the 50 mark owing to expectation of banks and financial institutions of deterioration in the overall financial conditions in the economy. Separately, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest round of Economic Outlook Survey has said that Indian economy will grow 6.8 percent for the year 2016-17 due to a slowdown in the services and infrastructure sectors post demonetization. It added that this is 0.5 percentage points lower than the estimate of 7.3 percent put across in the last round. Traders were seen piling position in Power and FMCG stocks, while selling was witnessed in IT, TECK and Auto sector stocks. IT stocks were trading under pressure on report that as a part of a larger immigration reform effort, US President Donald Trump is expected to sign a new executive order aimed at strangulating work-visa programmes, including the H-1B and L1 visas used by Indian IT professionals. In scrip specific development, ONGC was trading in green on reports that the company received the first installment of $19 million from Venezuela’s state oil firm Petroleos de Venezuela towards recovering pending dividend.

On the global front, Asian shares were trading in red, as stringent curbs on travel to the US ordered by President Donald Trump brought home to investors that he is serious about putting his controversial campaign pledges into action. The Bank of Japan maintained to its ultra-easy monetary policy and held back from raising its inflation forecast for the coming year, signaling its nervousness about the uncertain path of US President Donald Trump’s policy. In a widely expected move, the BoJ maintained the 0.1% interest it charges on a portion of the excess money that financial institutions park with the central bank. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,600 and 27,800 levels respectively. The market breadth on BSE was negative in the ratio of 808:1371, while 153 scrips remained unchanged.

The BSE Sensex is currently trading at 27731.39, down by 118.17 points or 0.42% after trading in a range of 27695.23 and 27867.92. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index was down by 0.37%.

The only gaining sectoral indices on the BSE were Power up by 0.70% and FMCG up by 0.06%, while IT down by 1.40%, TECK down by 1.14%, Auto down by 0.68%, Capital Goods down by 0.64% and PSU down by 0.55% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.74%, Power Grid up by 1.32%, NTPC up by 0.88%, Bharti Airtel up by 0.79% and Tata Steel up by 0.54%.

On the flip side, GAIL India down by 3.04%, Coal India down by 2.40%, TCS down by 2.10%, Adani Ports & Special Economic Zone down by 1.42% and Axis Bank down by 1.30% were the top losers.

Meanwhile, easing concerns of economic slowdown due to Note ban, Union Power Minister Piyush Goyal has said that India is the fastest growing major economy and it will remain the same in the coming years.

The Central Statistics Office (CSO), in its advance estimates released earlier this month, has pegged country’s GDP growth at a slower pace of 7.1 per cent in current fiscal as compared to 7.6 per cent in 2015-16, mainly due to slump in manufacturing, mining and construction sectors.

Economists and experts have been constantly talking about the adverse impact of demonetisation on country’s economic growth in near term including in the current fiscal. Several economists have projected that in the near term country’s growth will slow down as economic activity has taken a hit due to demonetisation. The former Prime Minister Manmohan Singh too has estimated GDP growth to fall by 2 percentage points.

The CNX Nifty is currently trading at 8591.80, down by 40.95 points or 0.47% after trading in a range of 8579.70 and 8631.75. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 12.90%, Tata Power up by 1.55%, ONGC up by 1.49%, Bharti Airtel up by 1.29% and Power Grid up by 0.95%.

On the flip side, Bharti Infratel down by 10.36%, Grasim Industries down by 4.09%, GAIL India down by 3.17%, Coal India down by 2.62% and TCS down by 2.05% were the top losers.

The Asian markets were trading in red; Nikkei 225 decreased 253.94 points or 1.31% to 19,114.91, KOSPI Index decreased 9.85 points or 0.47% to 2,073.74, FTSE Bursa Malaysia KLCI decreased 9.65 points or 0.57% to 1,676.71 and Jakarta Composite decreased 3.12 points or 0.06% to 5,299.54.

China, Hong Kong and Taiwan stock exchange were closed on account of ‘Lunar New Year’ holiday.