Indian benchmarks extend losses; Sensex slips below 27,700 mark

Indian equity benchmarks extending losses, continued to trade in red in noon session, with the Sensex losing over 150 points and Nifty falling below the 8600 level, as inventors turned jittery ahead of an annual economic survey and the federal budget, while the risk sentiment was hit as Asian shares fell on worries over US President Donald Trump's immigration policy. Local sentiments also got undermined by Ficci's Economic Outlook Survey indicating that Indian economy will grow 6.8% this fiscal due to a slowdown in the services and infrastructure sectors post demonetisation. Significantly, the annual median GDP growth forecast of 6.8 per cent is sharply lower than the 7.3% projected in the previous round of the survey. Further, investors remained anxious 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. Banking stocks came under pressure on the report that demonetisation is likely to push back recovery in banks' asset quality as the cash shortage had a ‘disruptive impact’ on India's informal economy. Cash shortages caused by the demonetisation of large denomination currency notes have affected the income of many borrowers by holding back economic activity and reduced their short-term repayment abilities. Furthermore, IT stocks declined on reports that the Trump administration has drafted an executive order aimed at overhauling the work-visa programs, including the H1B and L1 visas.

On the global front, Asian markets were trading lower on Tuesday following the negative lead overnight from Wall Street as worries about the economic impact of US President Donald Trump's immigration policies continued to weigh on markets. Further, Japan's Nikkei share average fell after the Bank of Japan maintained to its ultra-easy monetary policy and held back from raising its inflation forecast for the coming years, 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, stocks from FMCG and Power counters were supporting the markets, while those from IT, PSU and Metal counters were adding to the underlying cautious undertone. In scrip specific development, Bajaj Finance gained after the company reported 36.04% rise in its net profit at Rs 555.65 crore for the quarter ended December 31, 2016, as compared to Rs 408.46 crore for the same quarter in the previous year. On the other hand, Shriram City Union Finance declined after the company reported 9.50% fall in its net profit at Rs 157.74 crore for the quarter ended December 31, 2016, as compared to Rs 174.29 crore for the same quarter in the previous year.

The market breadth remained pessimistic, as there were 736 shares on the gaining side against 1603 shares on the losing side, while 172 shares remained unchanged.

The BSE Sensex is currently trading at 27698.28, down by 151.28 points or 0.54% after trading in a range of 27686.03 and 27867.92. 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 0.63%, while Small cap index down by 0.56%.

The only gaining sectoral indices on the BSE were FMCG up by 0.16% and Power up by 0.11%, while IT down by 1.76%, TECK down by 1.46%, PSU down by 0.92%, Metal down by 0.84% and Oil & Gas down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.07%, ONGC up by 1.02%, ITC up by 0.78%, Bharti Airtel up by 0.58% and Tata Steel up by 0.30%. On the flip side, GAIL India down by 3.09%, TCS down by 2.68%, Coal India down by 2.13%, Adani Ports &Special down by 2.09% and Wipro down by 1.42% were the top losers.

Meanwhile, Department of Industrial Policy and Promotion (DIPP), under the Ministry of Commerce and Industry, is planning to release the next edition of Consolidated Foreign Direct Investment (FDI) Policy Circular of 2017 soon. DIPP also said that the next edition of the consolidated FDI policy is scheduled to be issued this year, which would incorporate all the changes effected in FDI Policy post issue of Consolidated FDI Policy Circular of 2016 that is from June 7, 2016.

DIPP is the nodal agency on FDI policy and it compiles all policies related to India's FDI regime into a single document to make it simple and easy for investors to understand. Investors would otherwise have to go through various press notes issued by the industry department and RBI regulations to understand the policy. The government updates the policy every year.

For economic development, FDI is considered as essential component and the country has taken several steps to attract such funds. Last year, the government relaxed norms in about a dozen sectors including defence, civil aviation and single brand retail. During April-September of the current financial year, FDI inflows increased by 30 per cent to $21.62 billion as compared to $16.63 billion in the same period a year earlier.  

The CNX Nifty is currently trading at 8578.15, down by 54.60 points or 0.63% after trading in a range of 8572.85 and 8631.75. There were 16 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 12.23%, Tata Power up by 1.37%, Bharti Airtel up by 1.26%, Indusind Bank up by 0.83% and Power Grid up by 0.80%. On the flip side, Bharti Infratel down by 10.33%, Grasim Industries down by 4.29%, GAIL India down by 3.22%, TCS down by 2.67% and HCL Tech. down by 2.30% were the top losers.

Asian markets were trading in red; Nikkei 225 declined 1.5%, KOSPI Index shed 0.57%, FTSE Bursa Malaysia KLCI decreased by 0.5% and Jakarta Composite was down by 0.06%.