Indian bourses continue to trade in red as the budget presentation progress

Indian bourses continued their weak trade in the afternoon session, as Union Budget announcements were yet to cheer the market sentiment. The FM started the budget by giving an outlook for the economy saying India’s macros have stabilized, governance has improved, corruption has been eliminated while the poor are being given due focus. The FM added that the world economy faces a challenging time, protectionism is building up and growth is slowing down and amid this, India stands out as a shining spot. On the sectoral front, select Infrastructure stocks were trading higher after Finance Minister allocated Rs 3.96 lakh crore for infrastructure and announced new trade infrastructure export scheme. Larsen & Toubro was up by around a percent, Adani Ports and Special Economic Zone was up by over one and half percent. Also, certain PSU sector stocks such as State Bank of India, Bank of Baroda and Punjab National Bank were trading in green after Finance Minister Arun Jaitley announced allocation of Rs 10,000 crore for recapitalisation of PSU banks.

On the global front, Asian markets were trading mostly in green, supported by upbeat manufacturing data from China and Japan. China’s official manufacturing Purchasing Managers' Index (PMI) continued in expansion in January, as the mainland economy shows signs of stabilizing, reaching 51.3, down slightly from 51.4 in December. Also, Japanese manufacturing activity expanded in January at the fastest pace in almost three years as export orders surged. However, Investors remained cautious ahead of the U.S. Federal Reserve's latest monetary policy decision due later in the day.

The BSE Sensex is currently trading at 27694.90, up by 38.94 points or 0.14% 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 0.07%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Realty up by 1.20%, FMCG up by 0.75%, Oil & Gas up by 0.74%, PSU up by 0.66% and Capital Goods up by 0.54%, while IT down by 1.75%, TECK down by 1.52%, Power down by 0.60% and Metal down by 0.41% were the losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 2.29%, SBI up by 1.62%, ITC up by 1.59%, HDFC up by 1.12% and Tata Motors up by 1.03%. On the flip side, TCS down by 2.42%, Dr. Reddys Lab down by 2.11%, Lupin down by 1.80%, Infosys down by 1.70% and NTPC down by 1.59% were the top losers.

Meanwhile, India’s manufacturing growth revived in the first month of 2017, coming from a contraction in December triggered by the government's scrapping of high value banknotes. The growth was supported by the increase in order books, production and buying levels. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite single-figure indicator of manufacturing performance - rose to 50.4 in January from 49.6 in December. As per the report, a reading above 50 indicates economic expansion.

The report stated that greater production needs encouraged companies to purchase more inputs, but failed to generate jobs in the sector. On the price front, it said that input cost inflation climbed to its highest mark since August 2014, while output charges were raised for the eleventh successive month. Also, rates of expansion were only slight, but reversed the contractions noted in December. In contrast to the upturn in total new business, new export orders fell again. As per the report, intermediate goods were the bright spot in January, with rates of expansion in both new work and production outstripping those seen in the consumer goods sector, and investment goods dipped into contraction.

The survey data pointed to an increasing degree of pressure on the capacity of manufacturers’ operations as backlogs rose at a quicker rate than in December. In spite of this, companies kept their payroll numbers unchanged in January. Additionally, holdings of finished goods decreased in January, amid evidence from survey participants of orders being fulfilled directly from stocks. The rate of depletion was marked, and the quickest since last May. Concurrently, pre-production inventories declined slightly, but at a pace that was the fastest in over three years.

The CNX Nifty is currently trading at 8547.35, down by 13.95 points or 0.16% after trading in a range of 8537.50 and 8586.20. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.47%, GAIL India up by 1.88%, ITC up by 1.55%, SBI up by 1.33% and HDFC up by 1.12%. On the flip side, Kotak Mahindra Bank down by 3.95%, Tech Mahindra down by 2.93%, Aurobindo Pharma down by 2.82%, Idea Cellular down by 2.68% and TCS down by 2.46% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 12.91 points or 0.62% to 2,080.48, Jakarta Composite rose 34.14 points or 0.64% to 5,328.25 and Nikkei 225 was up by 106.74 points or 0.56% to 19,148.08. On the other hand, Hang Seng decreased 155.22 points or 0.66% to 23,205.56.