Indian bourses continue to trade in negative terrain; Metal drag

Indian bourses continued their trade in negative terrain in the afternoon session, tracking weak global cues. Traders remained cautious reacting to the Wholesale Price Index (WPI) data. India’s WPI in the month of January 2017, rose to 5.25 percent as compared to 3.39 percent in the previous month on the back of rising fuel prices even as food and vegetable prices contracted during the month. Some concern also came with a private report indicating 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. Sentiment turned weak despite retail inflation falling to 3.17% in January, mainly on account of declining prices of food items including vegetables and pulses. Further, the losses in Metal, PSU, Consumer Durables and Power stocks also aided to pessimistic milieu. In scrip specific development, Gujarat Industries Power Company (GIPCL) was trading in green after commissioning two more Wind Turbine Generators of 1.5 MW each at Kotadapitha Wind Farm Site.

On the global front, Asian markets 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. Back home, the BSE Sensex is currently trading at 28317.61, down by 34.01 points or 0.12% after trading in a range of 28263.45 and 28386.68. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.63%, while Small cap index was down by 0.39%.

The top losing sectoral indices on the BSE were Metal down by 1.47%, PSU down by 0.78%, Consumer Durables down by 0.70%, Power down by 0.34% and FMCG down by 0.31%, while there were no gainers on the BSE sectoral front.

The top gainers on the Sensex were Reliance Industries up by 1.97%, GAIL India up by 1.59%, ONGC up by 1.38%, Adani Ports & SEZ up by 1.25% and ICICI Bank up by 0.64%. On the flip side, Hero MotoCorp down by 1.92%, Hindustan Unilever down by 1.84%, Power Grid down by 1.28%, Axis Bank down by 1.27% and Coal India down by 1.22% were the top losers.

Meanwhile, Economic Affairs Secretary Shaktikanta Das has said that the government's commerce and trade department is working towards increasing exports to China with an aim to bridge the trade deficit and formulate a sustainable trade relationship. He also highlighted that total trade between two countries in 2016 was $71 billion and India had a very wide trade deficit of $46 billion. 

Das has stated that there has to be consistency and balancing regarding the huge trade deficit with China so the two countries are able to move together. He also said that as far as government is concerned India's policy is to have a very good economic partnership with China. The Secretary further said that Chinese President during his visit to India in 2014 had announced $20 billion investment in the country and it has started flowing in. He added that they are looking for more inflow of investment from China and their embassy is working closely with China for this.

Talking about new methodology of GDP calculation, Shaktikanta said that earlier it was based on factor cost and now it is based on market price which is more internationally aligned. He said that change in method of GDP calculation was under consideration for long and it was not a sudden decision.

The CNX Nifty is currently trading at 8790.20, down by 14.85 points or 0.17% after trading in a range of 8772.50 and 8820.45. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 2.30%, Reliance Industries up by 1.76%, GAIL India up by 1.68%, ONGC up by 1.40% and Adani Ports &SEZ up by 1.26%. On the flip side, BPCL down by 2.02%, Hero MotoCorp down by 1.92%, Ultratech Cement down by 1.89%, Hindustan Unilever down by 1.73% and Zee Entertainment down by 1.39% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 220.17 points or 1.13% to 19,238.98, Jakarta Composite shed 13.4 points or 0.25% to 5,396.16, Hang Seng declined 10.18 points or 0.04% to 23,700.80, KOSPI Index was down by 4.08 points or 0.2% to 2,074.57 and FTSE Bursa Malaysia KLCI slipped 2.28 points or 0.13% to 1,707.96.

On the flip side, Shanghai Composite was up by 2.11 points or 0.07% to 3,218.95 and Taiwan Weighted increased 8.46 points or 0.09% to 9,718.78.