Benchmarks trade slightly in green in late morning session

Indian equity benchmarks continued their lackluster trade above neutral line in the late morning session amid weak Asia cues. Investors read into the fine-prints of Budget document after yesterday’s splendid performance on the Budget day. Finance minister Arun Jaitley came out with a low-key Budget on Wednesday which in his words set out to Transform, Energize and Clean India. Jaitley though maintained fiscal prudence in the Budget, the foreign investors may have some renewed interest as the Finance Minister tweaked the domestic transfer pricing rules and exempted some FPIs from indirect transfer provision. He also further clarified the GAAR rules. Traders were taking some support following Niti Aayog vice-chairman Arvind Panagariya expressing hope that the economic growth in the next fiscal year would be in the range of 7-7.5 percent. He said ‘By nature, I am an optimist, so I would remain on the higher side of it. So, if you feel that this range is too wide, personally, I would narrow it down to 7-7.5 percent and maybe on the higher side of it with higher probability’. Investors will now shift their focus on quarterly earnings whereby Glenmark Pharmaceuticals, Godrej Properties, Dr Lal PathLabs, Marico and TeamLease will announce their financial results for the quarter ended December 31, 2016. Traders were seen piling position in FMCG, Oil & Gas and PSU stocks, while selling was witnessed in Metal, Auto and Capital Goods sector stocks. In scrip specific development, ITC was trading in green continuing its run for second straight day after the government yesterday proposed a lower-than-expected excise duty hike of 6 percent for cigarettes across all lengths in the Budget. The government’s proposal to hike excise duty on cigarettes by 6 percent is the lowest in last six years, while the street was expecting 10-12 percent hike in excise duty on cigarettes.

On the global front, Asian shares were trading mostly in red, on tensions between Iran and the US, over a ballistic missile test by Tehran this week and even the tenor of President Donald Trump’s phone calls with world leaders. Japanese policymakers rejected Trump’s charges of currency manipulation on Wednesday. Prime Minister Shinzo Abe defended the Bank of Japan’s huge stimulus program and said it was to reflate the economy, and was not currency manipulation. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,700 and 28,100 levels respectively. The market breadth on BSE was positive in the ratio of 1361:858, while 108 scrips remained unchanged.

The BSE Sensex is currently trading at 28167.28, up by 25.64 points or 0.09% after trading in a range of 28078.08 and 28194.00. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.80%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were FMCG up by 1.03%, Oil & Gas up by 0.93%, PSU up by 0.71%, TECK up by 0.67% and IT up by 0.60%, while Metal down by 0.78%, Auto down by 0.64%, Capital Goods down by 0.35% and Realty down by 0.19% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.64%, Bharti Airtel up by 2.10%, ITC up by 1.97%, Axis Bank up by 1.93% and ICICI Bank up by 1.82%.

On the flip side, Tata Motors down by 1.93%, HDFC down by 1.77%, Mahindra & Mahindra down by 1.62%, GAIL India down by 1.45% and HDFC Bank down by 0.89% were the top losers.

Meanwhile, Niti Aayog vice-chairman Arvind Panagariya has expressed hope that the economic growth in the next fiscal year would be in the range of 7-7.5 percent. He said ‘By nature, I am an optimist, so I would remain on the higher side of it. So, if you feel that this range is too wide, personally, I would narrow it down to 7-7.5 percent and maybe on the higher side of it with higher probability’.

Arvind Panagariya has said that FY18 growth targets should not be a problem with remonetisation substantially accomplished. On the government's fiscal roadmap, he said that though the government should stick to its fiscal consolidation plan, a minor deviation from the roadmap is acceptable. He added that heavens will not fall if there is a 10-20 basis points deviation from the fiscal deficit target. He also said that a fiscal deficit target of around 3.2 percent would be comfortable, but it edging towards 3.5 percent or beyond would be a serious red flag.

The Economic Survey for 2016-17, tabled in Parliament by Finance Minister Arun Jaitley, pegged India’s economic growth at 6.5 percent for the current fiscal, down from 7.6 percent recorded in the last financial year, but it added that growth is expected to rebound in the range of 6.75-7.5 percent in 2017-18. The Survey’s GDP growth figure for the current fiscal is lower than 7.1 percent the Central Statistics Office had forecast earlier this month.

The CNX Nifty is currently trading at 8719.55, up by 3.15 points or 0.04% after trading in a range of 8692.05 and 8727.00. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 3.63%, NTPC up by 2.49%, Bharti Airtel up by 2.25%, ITC up by 2.13% and Axis Bank up by 2.12%.

On the flip side, Hindalco down by 2.34%, Tata Motors down by 2.15%, Mahindra & Mahindra down by 2.10%, Bosch down by 1.66% and GAIL India down by 1.56% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 159.88 points or 0.83% to 18,988.20, Hang Seng decreased 157.24 points or 0.67% to 23,161.15, Taiwan Weighted decreased 4.47 points or 0.05% to 9,443.48 and KOSPI Index decreased 3.19 points or 0.15% to 2,077.29.

On the other hand, FTSE Bursa Malaysia KLCI increased 4.68 points or 0.28% to 1,676.22 and Jakarta Composite increased 15.09 points or 0.28% to 5,342.25.

China market remains closed for the final day of Lunar New Year holidays that started on 27 January 2017.