Weak trade persist; Nifty below 8800 mark

Indian equity benchmarks continued their weak trade in late morning session on account of selling in frontline blue chip counters even as prospects of economic stimulus in the United States lifted the Wall Street to fresh record highs overnight. Investors took cautious approach with a private report that India’s economic growth is likely to remain muted in the first quarter of this calendar year with the GDP likely to grow at 5.7% in the January-March period amid subdued activity. According to the global financial services major, following subdued growth in the first quarter, a V-shaped recovery is on the cards due to remonetisation, wealth redistribution and the lagged effects of lower lending rates. Separately, 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 downside was however 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. The street also took note of 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. Traders were seen piling position in Realty and Bankex stocks, while selling was witnessed in Metal, Consumer Durables and Power sector stocks. In scrip specific development, realty firm Prestige Estates Projects was trading in red on reporting 75.51 percent decline in its consolidated net profit at Rs 68.3 crore for the quarter ended December 2016. Its net profit stood at Rs 278.9 crore in the year-ago period. Container Corporation of India (CONCOR) was trading in red on reporting a 9.56 percent decline in net profit to Rs 185.99 crore for the quarter ended December 31, 2016. The company had clocked a net profit of Rs 205.66 crore for the corresponding quarter in 2015-16.

On the global front, Asian shares were trading mostly in red, ahead of testimony by the head of the Federal Reserve, which could highlight the likelihood of two or more US interest rate hikes this year. Japanese shares also ran into trouble after Toshiba Corp delayed an anxiously-awaited earnings release, including details of a multibillion dollar charge related to cost overruns at its US nuclear arm. China’s producer price inflation picked up more than expected in January to near six-year highs as prices of steel and other raw materials extended a torrid rally, adding to views that global manufacturing activity is building momentum. 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 negative in the ratio of 991:1307, while 136 scrips remained unchanged.

The BSE Sensex is currently trading at 28337.50, down by 14.12 points or 0.05% after trading in a range of 28263.45 and 28386.68. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.56%, while Small cap index was down by 0.24%.

The only gaining sectoral indices on the BSE were Realty up by 0.09% and Bankex up by 0.04%, while Metal down by 1.34%, Consumer Durables down by 0.94%, Power down by 0.50%, Auto down by 0.47% and PSU down by 0.43% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.63%, GAIL India up by 1.56%, ONGC up by 1.41%, Adani Ports & Special Economic Zone up by 1.16% and ICICI Bank up by 0.50%.

On the flip side, Hero MotoCorp down by 1.84%, Coal India down by 1.53%, Bajaj Auto down by 1.42%, Hindustan Unilever down by 1.15% and Power Grid down by 1.13% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that the Modi government's overall emphasis is on faster decision, bolder decisions, cleaner economy, freedom from black money, freedom from corruption and a friendly environment for doing business, the returns of which can be spent on the poor of this country.

Jaitley has stated that during the UPA rule, the major problem was that its Prime Minister Manmohan Singh was not a natural leader of the ruling party or the government that committed two fundamental mistakes in its approach, one in terms of policy and the second in terms of its intention. However, he said that they have now someone who is enthusiastic to take bold decisions in the form of Narendra Modi.

Asserting that after the Modi government came to power, changes were visible in the last two-and- half years as compared to the last 10 years, Finance Minister has said that the first change is that the Prime Minister must also be the natural leader of the country or be the natural leader of the ruling party of the government. He further said that the UPA Prime Minister did not have the last word as far as the government was concerned. He added that countries need an inspirational leadership which leads from the front.

Talking about steps taken towards ease of doing business in India, the Minister said that every move of the government has been to have a convenient environment for business activity. Listing out government's developmental steps, he said that demonetisation has been a big blow to black money and corruption. Supporting a less cash society, he said that cash is the facilitator of crime and he added that quantum of bribery and other things will come down. Jaitley has also noted that electoral reform was possible only because the Prime Minister has been stressing on cleaning up political funding of the world's largest democracy, where funding was only through black money.      

The CNX Nifty is currently trading at 8791.10, down by 13.95 points or 0.16% after trading in a range of 8772.50 and 8820.45. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.67%, ONGC up by 1.35%, Grasim Industries up by 1.21%, Eicher Motors up by 1.11% and Adani Ports & Special Economic Zone up by 1.11%.

On the flip side, BPCL down by 2.09%, Hero MotoCorp down by 1.91%, Ambuja Cement down by 1.76%, Ultratech Cement down by 1.62% and Bajaj Auto down by 1.42% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 134.36 points or 0.69% to 19,324.79, Jakarta Composite decreased 14.31 points or 0.26% to 5,395.24, Shanghai Composite decreased 5.64 points or 0.18% to 3,211.20, KOSPI Index decreased 5.5 points or 0.26% to 2,073.15 and FTSE Bursa Malaysia KLCI decreased 3.08 points or 0.18% to 1,707.16.

On the other hand, Taiwan Weighted increased 6.91 points or 0.07% to 9,717.23 and Hang Seng increased 11.81 points or 0.05% to 23,722.79.