Benchmarks make cautious start on Budget day

Indian equity benchmarks have made a cautious start and are trading slightly in red in early deals on Wednesday, as traders remained on sidelines ahead of Union Budget to be announced later in the day. Some cautiousness too crept in, with fiscal deficit in the first nine months of 2016-17 touching 93.9 per cent of the Budget target against 87.9 per cent for the same period a year ago. However, downside remained capped as some support came with Central Statistics Office (CSO) revising up India’s GDP growth to 7.9 percent in 2015-16, from 7.6 percent estimated earlier. Traders also taking some support with report that Growth in eight core sectors expanded at a faster pace of 5.6% in December 2016, against the 4.9% growth recorded in November 2016, supported by double-digit expansion in the steel sector.

On the global front, Asian markets were trading in green at this point of time, as traders took some encouragement with report that China’s official factory gauge started the New Year on a robust note. China notched a 6.7 percent full-year expansion last year, with growth quickening to 6.8 percent in the last quarter. The US markets made a mixed closing in last session, while the tech heavy Nasdaq ended in green, Dow and S&P extended their decline.

Back home, Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 532.88 crore, while Domestic Institutional Investors (DIIs) bought shares worth a net Rs 237.37 crore, on January 30, 2017. On the sectoral front, stocks related to software pack reeled under pressure, as  a legislation has been introduced in the US House of Representatives which among other things calls for more than doubling the minimum salary of H-1B visa holders to $130,000, making it difficult for firms to use the programme to replace American employees with foreign workers.

The BSE Sensex is currently trading at 27642.18, down by 13.78 points or 0.05% after trading in a range of 27632.65 and 27725.16. There were 15 stocks advancing against 13 stocks declining on the index, while 2 stocks remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.10%, while Small cap index up by 0.03%.

The top gaining sectoral indices on the BSE were Realty up by 0.81%, PSU up by 0.62%, Oil & Gas up by 0.55%, Capital Goods up by 0.37% and Auto was up by 0.30%, while IT down by 1.99%, TECK down by 1.67%, Metal down by 0.23% and Power was down by 0.09% were the few losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.46%, Adani Ports up by 1.36%, HDFC up by 1.18%, Maruti Suzuki up by 0.75% and Sun Pharma was up by 0.71%. On the flip side, TCS down by 2.28%, Infosys down by 2.08%, Wipro down by 1.44%, ICICI Bank down by 0.97% and NTPC was down by 0.84% were the top losers.

Meanwhile, growth in eight core sectors - coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity, which comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP), expanded at a faster pace of 5.6% in December 2016, against the 4.9% growth recorded in November 2016, supported by double-digit expansion in the steel sector. As per the data of Ministry of Commerce & Industry, the combined Index of Eight Core Industries stood at 189.1 in December, 2016, which was 5.6% higher compared to the index of December, 2015. Its cumulative growth during April to December, 2016-17 was 5.0%.

Among the eight sectors, Steel production having 6.68% weight surged 14.9% in December, 2016, over December, 2015. Its cumulative index during April to December, 2016-17 increased by 8.9% over the corresponding period of previous year. Petroleum Refinery production having 5.94% weight jumped 6.4% in December, 2016 over December, 2015. Its cumulative index during April to December, 2016-17 increased by 7.8% over the corresponding period of previous year. Electricity generation having 10.32% weight rose 6.0% in December, 2016 over December, 2015. Its cumulative index during April to December, 2016-17 increased by 5.4% over the corresponding period of previous year. Coal production having 4.38% weight climbed 4.4% in December, 2016 over December, 2015. Its cumulative index during April to December, 2016-17 increased by 2.0% over corresponding period of previous year.

On the other hand, Cement production having 2.41% weight dropped 8.7% in December, 2016 over December, 2015, while its cumulative index during April to December, 2016-17 increased by 2.8% over the corresponding period of previous year. Fertilizer production having 1.25% weight slipped 4.7% in December, 2016 over December, 2015, while its cumulative index during April to December, 2016-17 increased by 3.4% over the corresponding period of previous year. Crude Oil production having 5.22% weight declined by 0.8% in December, 2016 over December, 2015. Its cumulative index during April to December, 2016-17 declined by 3.2% over the corresponding period of previous year. The Natural Gas production having 1.71% weight decreased marginally by 0.01 % in December, 2016 over December, 2015. Its cumulative index during April to December, 2016-17 declined by 3.3 % over the corresponding period of previous year.

The CNX Nifty is currently trading at 8555.75, down by 5.55 points or 0.06% after trading in a range of 8553.60 and 8584.85. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.99%, Bank of Baroda up by 1.45%, Adani Ports up by 1.36%, SBI up by 1.33% and HDFC was up by 1.28%.

On the flip side, Idea Cellular down by 4.50%, HCL Tech. down by 3.32%, Aurobindo Pharma down by 2.65%, TCS down by 2.40% and Infosys was down by 2.00% were the top losers.

Asian markets were trading mostly in green; KOSPI Index gained 10.5 points or 0.51% to 2,078.07, Jakarta Composite increased 26.49 points or 0.5% to 5,320.59 and Nikkei 225 was up by 53.16 points or 0.28% to 19,094.50. On the flip side, Hang Seng was down by 165.55 points or 0.71% to 23,195.23.