Benchmarks trade slightly in red in early deals

Indian equity benchmarks have made a weak start and are trading slightly in red in early deals on Tuesday amid feeble global cues. Traders also remained on sidelines ahead of Wholesale Price Index (WPI) numbers to be released later in the day. However, losses remained capped with retail inflation easing to 3.17 percent in January, its lowest level in at least five years, mainly due to a drop in the annual food inflation, which stood at 0.53 percent last month, lower than 1.37 percent in December. Some support also came with Finance Minister Arun Jaitley’s statement that the Modi government's emphasis is on bold decision making and a clean economy with business friendly environment, the returns of which can be spent on the poor.

On the global front, Asian counters were trading mostly in red at this point of time with the rally fizzling out, traders are pricing in a 30 percent chance the US Fed will lift rates at its March 15 meeting. Japanese market too was in red ahead of Bank of Japan Governor Haruhiko Kuroda’s speech later in the day. The US markets extended their upmoves in last session to reach fresh record highs, on optimism about reduced corporate taxes under President Donald Trump.

Back home, the Chief Executive Officer of NITI Aayog Amitabh Kant has said that US President Donald Trump will soon realise that protectionist measures like restrictions on H1B visa will impact America itself. In scrip specific development, GVK Power & Infrastructure edged higher by around 10% on reports that the company has been finalised by Maharashtra's CIDCO to construct the upcoming Rs 16,000 crore Navi Mumbai International Airport. MMTC gained over 6% after the state-run trading firm reported a net profit of Rs 74 crore in the December quarter, much higher than the Rs 19.89 crore a year ago, on account of higher income.

The BSE Sensex is currently trading at 28329.16, down by 22.46 points or 0.08% after trading in a range of 28263.45 and 28386.68. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index shed 0.33%, while Small cap index was down by 0.18%.

The only gaining sectoral indices on the BSE were Realty up by 0.28% and Bankex was up by 0.08%, while Consumer Durables down by 0.85%, Auto down by 0.66%, Metal down by 0.57%, Capital Goods down by 0.48%, Power was down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 1.52%, Reliance Industries up by 1.23%, ONGC up by 0.99%, GAIL India up by 0.78% and Cipla up by 0.49%. On the flip side, Hero MotoCorp down by 1.77%, Coal India down by 1.29%, Tata Motors down by 1.27%, Bajaj Auto down by 1.26% and Asian Paints was down by 1.13% were the top losers.

Meanwhile, global rating agency, Moody’s Investor Services in its latest report has said that the Indian government’s decision to remove a high denomination currency notes from circulation in November 2016 has negatively impacted the performance of Indian auto asset backed securities (ABS) in the short term, leading to a 1.3 percent decline in collections for November and December 2016.

The ratings agency noted that demonetisation has disrupted the recovery observed in the commercial vehicle (CV) loan segment for the past two years. It also expects ABS delinquencies and collections to return during 2017 to levels prior to demonetisation, as the economic slowdown triggered by notes ban wanes, oil prices remain around current levels and positive policy initiatives in Budget take hold to support earnings of CV operators.

The report further said that in such an environment, it expects the performance of the 15 Indian auto ABS transactions that Moody’s rate to continue to be weaker than was the case prior to demonetisation until at least the end of March 2017, owing to the temporary drag on consumption and investment triggered by the policy announced on November 8, 2016. However, the deterioration in performance has been limited to early stage delinquencies and supports Moody’s expectations of a short lived slippage in performance and proactive delinquency management by servicers, rather than as a precursor of permanent losses.

The CNX Nifty is currently trading at 8792.10, down by 12.95 points or 0.15% after trading in a range of 8772.50 and 8820.45. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 1.55%, Reliance Industries up by 1.11%, Grasim Industries up by 0.99%, Tech Mahindra up by 0.99% and ONGC was up by 0.91%. On the flip side, BPCL down by 2.21%, Hero MotoCorp down by 1.90%, Ambuja Cement down by 1.69%, Zee Entertainment down by 1.41% and Coal India was down by 1.34% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 151.14 points or 0.78% to 19,308.01, Jakarta Composite decreased 10.7 points or 0.2% to 5,398.85, KOSPI Index shed 7.04 points or 0.34% to 2,071.61, Shanghai Composite slipped 4.41 points or 0.14% to 3,212.43, FTSE Bursa Malaysia KLCI dipped 2.47 points or 0.14% to 1,707.77 and Taiwan Weighted was down by 0.99 points or 0.01% to 9,709.33.

On the flip side, Hang Seng was up by 1.19 points or 0.01% to 23,712.17.