Benchmarks extend losses in late morning session

Indian equity benchmarks extended their losses in the late morning session on account of selling in frontline blue chip counters ahead of outcome of two-day monetary policy committee due tomorrow. The profit-booking in recent gainers, a weak trend in other Asian bourses following overnight losses in the US and European markets, cut short the four-day march of the domestic bourses. Investors are eyeing the RBI policy review meet beginning later today hoping for a cut in the interest rate on the backdrop of easing inflation and 3.2% fiscal deficit target. The Indian rupee weakened against the US dollar, snapping a nine-day rally, tracking losses in the Asian currencies markets. Sentiments also remained dampened on report that Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 403.52 crore on February 6, 2017. Traders remained concerned with Commerce Minister Nirmala Sitharaman’s statement that the proposed changes in the regime for issuing H-1B visas for skilled workers by the US government will have an impact on Indian companies and the Commerce Ministry will soon hold a meeting with the industry to discuss its strategy for dealing with it. Traders were seen piling position in PSU, Oil & Gas and Consumer Durables stocks, while selling was witnessed in Auto, IT and TECK sector stocks.  Select fertilizer companies were trading in green as the Finance Ministry has granted Rs 10,000 crore to Fertiliser Ministry under special banking arrangement to provide loan to cash-starved fertilizer companies at reasonable rates. In scrip specific development, Tube Investments of India (TII) was trading in green on reporting a 67.39 percent jump in standalone net profit to Rs 27.47 crore for the third quarter ended December 31, 2016. The company had reported a net profit of Rs 16.41 crore in the year-ago period. Gujarat Gas was trading in green on reporting a net profit of Rs 42.29 crore for the quarter ended December 31, 2016, up 35.16 percent, against Rs 31.37 crore in the corresponding quarter last year.

On the global front, Asian shares were trading mostly in red, as global cues dampened sentiments with economic and political fears sent investors seeking shelter in the yen. China is expected to report on Tuesday that foreign exchange reserves fell for the seventh straight month in January but at a much slower pace as authorities’ tightened controls on capital outflows and the surging US dollar lost some steam. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,800 and 28,400 levels respectively. The market breadth on BSE was positive in the ratio of 1284:1014, while 110 scrips remained unchanged.

The BSE Sensex is currently trading at 28391.21, down by 48.07 points or 0.17% after trading in a range of 28361.97 and 28483.41. 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 0.28%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were PSU up by 0.57%, Oil & Gas up by 0.56%, Consumer Durables up by 0.55%, Metal up by 0.53% and Capital Goods up by 0.35%, while Auto down by 0.91%, IT down by 0.16%, TECK down by 0.15% and Bankex down by 0.10% were the losers on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.12%, ITC up by 0.85%, GAIL India up by 0.82%, Tata Steel up by 0.65% and Cipla up by 0.60%.

On the flip side, Tata Motors down by 1.97%, Bajaj Auto down by 1.32%, Mahindra & Mahindra down by 1.31%, Wipro down by 0.97% and ICICI Bank down by 0.84% were the top losers.

Meanwhile, in order to discuss the issue raised by Indian IT firms on the proposed changes in the regime for issuing H-1B visas for skilled workers by the US government, Commerce and Industry Ministry will soon hold a meeting with industry including Nasscom which have significant presence in the US. The Commerce Minister Nirmala Sitharaman has said that the proposed changes in the H-1B visa regime will have an impact on Indian firms and added that they are constantly in touch with the Consulate Office in the US.

Sitharaman further said that the meeting will be held once Parliament announces a recess from its proceedings. She said that in the meeting they will discuss about how they are working out in this environment and what their strategy is to deal with this matter.  She added that they are also going to have a clear exchange and discussions with industry and after that she will be able to have a clearer picture of where the industry is.

The Minister added that the changes that could have financial implications, such as doubling the minimum wage requirement, can be brought about only through Congressional approval and not executive order, indicating the government had time to take a calibrated decision. The Minister pointed out that there are several nuances to the law proposed by the US. She said 'It is a call which is possibly going to happen through an executive order which will mean a few things...Probably, we will have to wait for Congress approval. Further commenting about the increasing global protectionism, the commerce minister has said that it is increasing during the time when global demand is also not picking up.

The CNX Nifty is currently trading at 8784.75, down by 16.30 points or 0.19% after trading in a range of 8773.55 and 8809.30. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BHEL up by 2.74%, Bharti Infratel up by 1.59%, BPCL up by 1.45%, Kotak Mahindra Bank up by 1.11% and GAIL India up by 0.98%.

On the flip side, Tata Motors down by 2.06%, Tata Motors - DVR down by 1.91%, Zee Entertainment down by 1.56%, ACC down by 1.49% and Bajaj Auto down by 1.41% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 12.39 points or 0.05% to 23,335.85, Nikkei 225 decreased 12.1 points or 0.06% to 18,964.61, Shanghai Composite decreased 10.35 points or 0.33% to 3,146.63, Jakarta Composite decreased 9.05 points or 0.17% to 5,386.95, KOSPI Index decreased 3.44 points or 0.17% to 2,074.22 and FTSE Bursa Malaysia KLCI decreased 2.93 points or 0.17% to 1,688.31.

On the other hand, Taiwan Weighted increased 9.4 points or 0.1% to 9,547.41.