Markets trade flat with negative bias as FM Jaitley presents Budget 2017

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading flat with bit of negative bias as Finance Minister Arun Jaitley tabled the Union Budget for the year 2017-18. Presenting the Union Budget, Jaitley said that sluggish growth has replaced with high growth and demonetization will lead to a higher GDP. He added that India's Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in first half of 2016-17. He also reiterated three big challenges for the current year oil prices, Fed policy, global protectionism. Trading sentiments remained subdued from the start of the session with the report that the 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, investors got some comfort after Nikkei Markit India Manufacturing Purchasing Managers’Index (PMI) monthly survey rebounded from demonetisation downturn in January amid rising order books, production as well as buying levels and the expansion in the sector by increasing 50.4 in January from 49.6 in December. Some support also came 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. Meanwhile, IT stocks continued to fall on visa fears as H1B visa Bill to double minimum wages for H1B visa-holders was tabled in the US Congress.

On the global front, Asian markets were trading mostly in green on Wednesday as investors weighed the impact of Donald Trump’s policies ahead of a Federal Reserve policy decision. While the Fed is widely expected to leave interest rates unchanged, investors are likely to keep a close eye on the accompanying statement. The Japanese market is edging higher even as a stronger yen weighed on exporters' shares. Among the other Asian markets, Indonesia, South Korea and Singapore are higher.

Back home, stocks from Realty, PSU and Capital Goods counters were supporting the markets, while those from IT, Metal and Power counters were adding to the underlying cautious undertone. In scrip specific development, UCO Bank declined after the bank reported a net loss of Rs 437.09 crore for the quarter ended December 31, 2016 as compared to a net loss of Rs 1497.01 crore for the quarter ended December 31, 2015. On the flip side, Bajaj Holdings gained after the company reported 24.23% rise in its consolidated net profit at Rs 646.64 crore for the quarter ended December 31, 2016 as compared to Rs 520.51 crore for the same quarter in the previous year.

The market breadth remained optimistic, as there were 1289 shares on the gaining side against 1086 shares on the losing side, while 109 shares remained unchanged.

The BSE Sensex is currently trading at 27650.38, down by 5.58 points or 0.02% after trading in a range of 27590.10 and 27749.12. 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 0.20%, while Small cap index up by 0.33%.

The top gaining sectoral indices on the BSE were Realty up by 1.37%, PSU up by 0.86%, Capital Goods up by 0.77%, FMCG up by 0.77% and Oil & Gas up by 0.65%, while IT down by 2.17%, TECK down by 1.87%, Metal down by 0.49% and Power down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.29%, ITC up by 1.53%, Maruti Suzuki up by 1.23%, HDFC up by 1.04% and GAIL India up by 1.03%. On the flip side, TCS down by 2.69%, Dr. Reddy’s Lab down by 2.38%, Infosys down by 2.27%, Lupin down by 2.10% and NTPC down by 1.65% were the top losers.

Meanwhile, Central Statistics Office (CSO) has marginally revised India’s Gross Domestic Product (GDP) growth rate to 7.9 per cent from 7.6 percent estimated earlier for the financial year 2015-16. This upward revision in GDP estimates is mainly due to use of more recent data such as agricultural and industrial production.  

As per the data released by CSO, Real GDP or GDP at constant (2011-12) prices for 2015-16 and 2014-15 stands at Rs 113.58 lakh crore and Rs 105.23 lakh crore, respectively, showing growth of 7.9 per cent during 2015-16 and 7.2 per cent during 2014-15. However, the figure for 2014-15 has remained unchanged at 7.2 per cent in the second revision of the national accounts for the fiscal.

The statistics department has stated that, for 2012-13 to 2014-15, the estimates of GDP and other aggregates have also undergone revision due to use of latest available data on agricultural production and industrial production. It also said the Gross Value Added (GVA) at constant (2011-12) basic prices grew at 7.8 per cent in 2015-16 as compared to 6.9 per cent in 2014-15. Last year, it had projected GDP growth rate for 2015-16 and 2014-15 at 7.6 per cent and 7.2 per cent, respectively.

As per the revised numbers, growth in real GVA in 2015-16 has been higher than that of 2014-15, mainly due to stronger growth in agriculture, forestry and fishing (0.8 per cent), manufacturing (10.6 per cent), trade, repair, hotels and restaurants (11.6 per cent), transport, storage, communication and services related to broadcasting (9.1 per cent) and real estate, ownership of dwelling and professional services (12.6 per cent).  Further, Per capita net national income at current prices is estimated at Rs 86,513 and Rs 94,178, respectively, for 2014-15 and 2015-16.

The CNX Nifty is currently trading at 8558.50, down by 2.80 points or 0.03% after trading in a range of 8537.60 and 8586.20. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 3.08%, Bank of Baroda up by 2.63%, SBI up by 2.27%, ITC up by 1.49% and Hero MotoCorp up by 1.38%. On the flip side, HCL Tech. down by 3.13%, TCS down by 2.77%, Tech Mahindra down by 2.71%, Idea Cellular down by 2.59% and Aurobindo Pharma down by 2.57% were the top losers.

Asian markets were trading mostly in green; KOSPI Index gained 0.57%, Jakarta Composite increased 0.59% and Nikkei 225 was up by 0.46%. On the flip side, Hang Seng was down by 0.8%.