Indian bourses continue to trade in red in noon session

Indian bourses continued to trade in red in the noon session as investors stay cautious ahead of US President Donald Trump’s first speech in US Congress on Tuesday. Sentiments remained subdued with the report that economic think tank National Council of Applied Economic Research (NCAER) has lowered the country's growth forecast to 6.9% for the current fiscal on account of demonetization. According to NCAER, the growth rate would rebound to 7.3% for 2017-18. Recently, IMF lowered GDP growth forecast to 6.6% due to the strains that have emerged in the economy as a result of ‘temporary disruptions’ caused by demonetisation. Market participants turned jittery with a private survey stating that the full impact of the government's decision to demonetise high denomination currency in November is likely to show up in the December quarter's GDP growth number that comes out Tuesday. It expects the GDP growth for the quarter ended December 31, to be in the range of 5.5 to 6.5 percent. Last year, the GDP grew by 7.2 percent in the same period. However, losses remained capped with the report that Foreign Direct Investment (FDI) in India grew 18% during 2016 to touch $46 billion. The main sectors, which attracted the highest foreign inflows, include services, telecom, trading, computer hardware & software and automobile. Adding optimism among inventors, Bill Brummitt, chief operating officer (COO) of the Global Infrastructure Hub said India is seen as a bright spot for infrastructure investment amid rising protectionist measures around the world. According to Brummitt, Roads and smart cities are two key areas, which seem to have a lot of potential in India. Meanwhile, Index heavyweight Reliance Industries made its presence felt by surging around five percent in the session. The stock is trading at its highest level since May 30, 2008. In past four trading sessions, the stock jumped 17% from Rs 1,074 on February 20, after Reliance Jio Infocomm (RJio), a subsidiary of RIL, announced that its tariff plans will become applicable from April 1, 2017.

On the global front, Asian markets were trading mostly lower on Monday as weak cues from U.S. share markets and declining European government bond yields on political worries push investors to take profits after a recent rally. Markets are holding in recent broad trading ranges and interest is turning to U.S. President Donald Trump's policy speech to a joint session of Congress on Tuesday night where he is expected to provide clues on his plans to cut taxes. Further, Japanese market declined as the yen strengthened and as financial stocks dropped on lower US yields. 

Back home, stocks from Energy, Oil & Gas and IT counters were supporting the markets, while those from Telecom, Banking and Auto counters were adding to the underlying cautious undertone. In scrip specific development, Eveready Industries gained after the company commenced the commercial production, with a capacity of 500 million of batteries and 9 million LED flashlights per annum, at its new unit at Industrial Growth Centre, Matia, Goalpara, Assam on February 23, 2017. Furthermore, Jet Airways surged after the company entered into a reciprocal codeshare partnership with Hong Kong Airlines, which will enable Indian fliers to travel seamlessly to New Zealand, Japan, Indonesia, Vietnam and Thailand.

The market breadth remained pessimistic, as there were 1196 shares on the gaining side against 1217 shares on the losing side, while 199 shares remained unchanged.

The BSE Sensex is currently trading at 28885.26, down by 7.71 points or 0.03% after trading in a range of 28812.88 and 28961.83. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.05%, while Small cap index up by 0.23%.

The gaining sectoral indices on the BSE were Energy up by 1.70%, Oil & Gas up by 0.49%, IT up by 0.48%, Consumer Durables up by 0.13% and Realty up by 0.10%, while Telecom down by 1.46%, Bankex down by 0.83%, Auto down by 0.77%, PSU down by 0.74% and Power down by 0.50% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 4.81%, Hindustan Unilever up by 1.12%, Infosys up by 1.04%, Bajaj Auto up by 0.65% and Wipro up by 0.60%. On the flip side, Axis Bank down by 2.74%, Power Grid down by 2.03%, Cipla down by 1.62%, Mahindra & Mahindra down by 1.52% and Bharti Airtel down by 1.52% were the top losers.

Meanwhile, economic think tank, National Council of Applied Economic Research (NCAER), which had recently projected India’s growth rate at 7.6 per cent for 2016-17, now lowered India’s gross domestic product (GDP) growth projection to 6.9 per cent for the fiscal 2016-17, on account of government’s demonetisation drive to curb black money and corruption. However, NCAER expects the growth rate to rebound to 7.3 per cent for 2017-18.

While noting that the ban on high value currency notes with effect from the midnight of November 8, 2016 took the domestic economy by surprise, raising fresh anxieties about economic recovery, leading to a downward forecast, NCAER has also blamed global economic uncertainty for the downward forecast.

The economic think tank further said that Gross Value Added (GVA) at Basic Prices at constant (2011-12) prices is predicted to grow at 6.3 per cent in 2016-17 and 7 per cent in 2017-18. Real Agriculture GVA is forecast to grow at 3.7 per cent, real Industry GVA at 5.5 per cent and real Services GVA at 7.3 per cent in 2016-17. Further it has projected that Wholesale Price Index (WPI) inflation will remain low in 2016-17 that is at 3.6 per cent. However, it is projected to accelerate in 2017–18 due to rising crude oil inflation. The report also said that the performance of the external sector in the third quarter of 2016-17 has shown signs of improvement. Merchandise exports grew for the fifth consecutive month in January 2017, up by 4.3 percent.

The CNX Nifty is currently trading at 8918.30, down by 21.20 points or 0.24% after trading in a range of 8913.65 and 8951.80. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 4.82%, Aurobindo Pharma up by 1.27%, Hindustan Unilever up by 1.18%, Infosys up by 1.07% and Hero MotoCorp up by 0.58%. On the flip side, Axis Bank down by 2.86%, Zee Entertainment down by 2.63%, Bharti Infratel down by 2.18%, Power Grid down by 2.08% and Ambuja Cement down by 2.00% were the top losers.

Asian markets were mostly in red; Nikkei 225 slumped by 0.96%, Taiwan Weighted declined by 0.19%, Jakarta Composite decreased by 0.22%, Hang Seng slipped by 0.35%, Shanghai Composite was down by 0.53% and KOSPI Index was lower by 0.31%. On the other hand, FTSE Bursa Malaysia KLCI was up by 0.22%.