Benchmarks extend losses; Sensex slips below 28200 mark

Indian equity indices extended losses, continued to trade in red in noon session, with Nifty falling below the 8750 level on sustained selling by investors amid disappointing corporate earnings. Sentiments remained dismal as the US Federal Reserve Chair Janet Yellen hinted at a likely rate hike in the forthcoming policy review. In her semi-annual monetary policy testimony before the Senate Banking Committee, Yellen said that the Fed will probably need to raise interest rates at an upcoming meeting in March and that delaying rate increases could leave the Fed's policymaking committee behind the curve. Furthermore, investors remained on the sidelines and refrained from any buying activity, ahead of the 10th meeting of the all-powerful GST Council this weekend, where a critical anti-profiteering clause in the draft Goods and Services Tax law to ensure that the benefit of lower taxes gets shared with consumers is likely to be finalized. The Council, headed by Finance Minister Arun Jaitley and comprising representatives of all states, is also likely to finalise the definition of 'agriculture' and 'agriculturist' as well as the constitution of a 'National Goods and Services Tax Appellate Tribunal' to adjudicate on disputes.

On the global front, Asian markets were trading mostly higher on Wednesday as Wall Street set record highs overnight after Federal Reserve Chair Janet Yellen spoke in support of an interest rate hike next month, while the dollar hovered near three-week highs. Meanwhile, oil pared earlier gains, settling slightly higher on Tuesday as concerns about rising supply from US shale output overshadowed an OPEC-led effort to cut global output, which has supported oil prices in a higher range.

Back on street, all sectoral indices on the BSE were trading in the red with Realty index emerging as the top loser down by around three percent followed by Auto, Power and Metal indices among others. In scrip specific development, Adani Enterprises gained after the company reported 61.72% rise in its consolidated net profit at Rs 339.96 crore for the quarter ended December 31, 2016, as compared to Rs 210.22 crore for the same quarter in the previous year. On the other hand, DLF declined after the company reported 46.11% fall in its consolidated net profit at Rs 98.14 crore for the quarter ended December 31, 2016, as compared to Rs 182.11 crore for the same quarter in the previous year.

The market breadth remained pessimistic, as there were 563 shares on the gaining side against 1930 shares on the losing side, while 120 shares remained unchanged.

The BSE Sensex is currently trading at 28170.71, down by 168.60 points or 0.59% after trading in a range of 28128.56 and 28382.32. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.07%, while Small cap index down by 1.38%.

The top losing sectoral indices on the BSE were Realty down by 2.91%, Auto down by 2.04%, Power down by 1.08%, Metal down by 0.97% and PSU down by 0.86%, while there were no gainers on BSE sectoral front. 

The top gainers on the Sensex were ITC up by 0.74%, Mahindra & Mahindra up by 0.60%, Axis Bank up by 0.54%, HDFC Bank up by 0.34% and Reliance Industries up by 0.17%. On the flip side, Tata Motors down by 8.38%, Sun Pharma down by 2.84%, Tata Steel down by 2.17%, ICICI Bank down by 1.26% and Infosys down by 1.12% were the top losers.

Meanwhile, Union Labour Minister Bandaru Dattatreya has said that 8.65 per cent interest rate on employees’ provident fund (EPF) deposits for this financial year will soon be approved by the Finance Ministry. He also said that there was no difference opinion on this issue between the Labour Ministry and Finance Ministry and added that it is in the process and he will pursue it personally.

EPFO’s apex body, Central Board of Trustees (CBT) chaired by the Dattatreya, had approved 8.65 per cent rate of interest on EPF deposits for current fiscal on December 19 which is lowest in four years. For the FY 2015-16, the Employees’ Provident Fund Organisation had provided 8.8 per cent rate of interest to its 4 crore contributing subscribers. It also maintained 8.75 per cent for 2013-14 and 2014-15 while it was 8.5 per cent in 2012-13. EPFO will be left with a surplus of Rs 269 crore after providing 8.65 per cent interest rate for the current fiscal.

The minister’s assurance has come as relief for subscribers as the Finance Ministry has been reportedly asking the Labour Ministry to bring the EPF interest rate in alignment with other small saving schemes like PPF of the government. Earlier, the Finance Ministry had lowered interest rate on EPF for 2015-16 to 8.7 per cent from 8.8 per cent approved by the CBT but the step was retracted after protests by trade unions.

The CNX Nifty is currently trading at 8740.65, down by 51.65 points or 0.59% after trading in a range of 8728.00 and 8807.90. There were 14 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.47%, Bosch up by 1.26%, Mahindra & Mahindra up by 0.63%, ITC up by 0.59% and Axis Bank up by 0.56%. On the flip side, Tata Motors - DVR down by 8.01%, Tata Motors down by 7.52%, Sun Pharma down by 2.82%, BHEL down by 2.32% and Tata Steel down by 2.27% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 0.52%, Shanghai Composite gained 0.34%, Taiwan Weighted added 0.83%, Nikkei 225 surged 1.08% and Hang Seng was up by 1.42%. On the flip side, Jakarta Composite decreased 0.53% and FTSE Bursa Malaysia KLCI was down by 0.04%.