Local equity markets continue to trade lower

The local equity markets continue to trade lower in noon session as funds and retail investors indulged in booking profits at prevailing levels amid mixed global cues. Sentiments remained subdued with report that India's services languished, with new business orders falling for the third straight month, amid muted inflationary pressure that could offer RBI much room to remain accommodative in its next policy meet next week, says a monthly survey. The Nikkei India Services Purchasing Managers' Index (PMI), which tracks services sector companies on a monthly basis, came in at 48.7 in January, from 46.8 in December 2016. A reading above 50 indicates expansion while any score below the mark denotes contraction. However, investors got some comfort with the American industry bodies lauding the Budget, saying Finance Minister Arun Jaitley has done an 'admirable job' in creating a vision that will propel the domestic economy while remaining cognizant about foreign investors eying the Indian market. Some support also came with the report that manufacturing sector rebounded from demonetisation downturn in January amid rising order books, production as well as buying levels and the expansion in the sector is likely to pick up pace in coming months. The Nikkei Markit India Manufacturing Purchasing Managers’ Index (PMI) - an indicator of manufacturing activity - increased to 50.4 in January from 49.6 in December. Market participants awaited RBI monetary policy due next week and more corporate earnings to assess trends. Aban Offshore, Adlabs Entertainment, Indian Hotels, Torrent Pharma and TTK Healthcare will announce their financial results today for the quarter ended December 31, 2016. Meanwhile, Auto stocks declined after the report that the automobile sales in January were a mixed bag in all segments, including passenger cars, two-wheelers and commercial vehicles, as rural markets have still not picked up.

On the global front, Asian markets were trading mixed on Friday as investors await the outcome of a key US monthly jobs report that will set the tone for the Federal Reserve's policy outlook. Further, Chinese stocks slumped after Beijing unexpectedly raised short-term interest rates, adding to growing concerns about US President's Donald Trump's aggressive policies, while  Japan's Nikkei edged higher as banking stocks outperformed on higher yields.  Meanwhile, European stocks closed lower on Thursday after the Bank of England decided to keep its monetary policy unchanged, but raised its growth forecasts for 2017. The bank also revised down its inflation forecasts for the next three years.

Back home, stocks from PSU, Realty and Banking counters were supporting the markets, while those from Consumer Durables, IT and Auto counters were adding to the underlying cautious undertone. In scrip specific development, Surya Roshni rose after the company bagged an order worth Rs 80.30 crore to supply 2.86 lakh light-emitting diode or LED street lights under the government’s Street Light National Programme. Furthermore, Vijaya Bank surged after the company posted over four-fold jump in its net profit at Rs 230.28 crore for the quarter ended December 31, 2016 as compared to Rs 52.61 crore for the quarter ended December 31, 2015.

The market breadth remained optimistic, as there were 1492 shares on the gaining side against 915 shares on the losing side, while 130 shares remained unchanged.

The BSE Sensex is currently trading at 28187.15, down by 39.46 points or 0.14% after trading in a range of 28142.23 and 28280.58. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index up by 0.87%.

The top gaining sectoral indices on the BSE were PSU up by 0.53%, Realty up by 0.37%, Bankex up by 0.20%, Power up by 0.15% and Oil & Gas up by 0.10%, while Consumer Durables down by 0.83%, IT down by 0.45%, Auto down by 0.40%, TECK down by 0.09% and Capital Goods down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 3.51%, Adani Ports & SEZ up by 1.60%, SBI up by 0.84%, HDFC Bank up by 0.81% and Coal India up by 0.80%. On the flip side, ICICI Bank down by 2.03%, Infosys down by 1.25%, Tata Motors down by 0.86%, Larsen & Toubro down by 0.83% and Power Grid down by 0.79% were the top losers.

Meanwhile, praising Finance Minister Arun Jaitley's forward looking budget 2017, US-India Business Council (USIBC) said that Jaitley has done a commendable job in creating a vision that will boost domestic economy while supporting foreign investors. The US Industry Body also noted that the budget is a fiscally sound agenda that doubles down on Modi's stated goals of improving the ease of doing business by reducing red tape, investing in Skill India along with attempts to reduce the negative impact of note ban. 

President of the USIBC, Mukesh Aghi, said that implementing the budget at a time of global uncertainty can be a challenging task but still the minister has done a good job in announcing propelling measures for economy. Aghi also said that the industry welcomes positive steps in the affordable housing segment, bringing the ‘Housing for All’ scheme a step closer to reality. He further stated that relaxation on long term capital gains and infrastructure status to the segment will boost supply in the market and added that the Council looks forward to more announcements on liberalisation in certain sectors in the near-term.

According to the USIBC, forward looking annual budget deepens the government's move towards a digital economy, while remaining committed to attracting foreign investment, increasing infrastructure spending in roads and civil aviation, rationalising the tax structure, driving domestic growth while also bringing in rural India into the fold of the digital economy.

The CNX Nifty is currently trading at 8719.85, down by 14.40 points or 0.16% after trading in a range of 8709.65 and 8748.25. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Cipla up by 3.36%, Bank of Baroda up by 2.45%, Bharti Infratel up by 2.38%, BHEL up by 1.51% and Indusind Bank up by 1.51%. On the flip side, Zee Entertainment down by 2.20%, ICICI Bank down by 2.05%, Eicher Motors down by 1.45%, Bosch down by 1.38% and Infosys down by 1.37% were the top losers.

Asian markets were trading mixed; Jakarta Composite rose 0.16%, FTSE Bursa Malaysia KLCI increased 0.37%, Taiwan Weighted gained 0.28% and Nikkei 225 was up by 0.1%. On the flip side, Hang Seng decreased 0.29%, Shanghai Composite declined 0.38% and KOSPI Index decreased 0.03%.