Key benchmark indices continue to trade marginally in red

Key benchmark indices continue to trade marginally in red in the afternoon session, as investors remained cautious ahead of the December quarter GDP data due later in the day, which is estimated to come in at 6.4% year-on-year. Some concern also came with India Ratings and Research’s (Ind-Ra’s) estimates that aggregate fiscal deficit of Indian states will increase marginally to 3.3% of gross domestic product (GDP) in FY18 from its forecast of 3.2% for FY17. It expects states’ debt/GDP ratio may increase marginally to 24.3% in FY’18 from 24% forecasted for FY’17. Besides, the losses in Oil & Gas, Energy, PSU and IT stocks coupled with depreciation in rupee value against the dollar, too affected the market sentiment. However, downside was capped as some support came with Finance Minister Arun Jaitley’s statement that India has potential to grow faster and plans are underway to reduce poverty and create jobs in rural areas. He also expressed his hopes that the GST would be implemented by July 1. In scrip specific development, L&T was trading in green with its arm signing framework agreement with Shell Global Solutions for providing engineering, procurement and construction management (EPCM) services for Shell projects in the Middle East, South East Asia and India.

On the flip side, Asian markets were trading mostly in green, as the dollar held on to the previous day's gains while investors awaited a speech by U.S. President Donald Trump for signals on tax reform and infrastructure spending. Back home, the BSE Sensex is currently trading at 28802.41, down by 10.47 points or 0.04% after trading in a range of 28771.21 and 28876.54. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices outperforming the benchmarks were trading in green; the BSE Mid cap index was up by 0.03%, while Small cap index was higher by 0.45%.

The top gaining sectoral indices on the BSE were Metal up by 0.72%, Telecom up by 0.63%, Basic Materials up by 0.52%, Capital Goods up by 0.40% and Industrials up by 0.25%, while Oil & Gas down by 1.02%, Energy down by 0.76%, PSU down by 0.28%, IT down by 0.17% and Auto down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.62%, Mahindra & Mahindra up by 1.08%, Tata Steel up by 0.82%, Adani Ports &SEZ up by 0.79% and Asian Paints up by 0.69%. On the flip side, Coal India down by 2.15%, TCS down by 1.16%, Bajaj Auto down by 1.14%, ICICI Bank down by 0.86% and NTPC down by 0.76% were the top losers.

Meanwhile, in order to bring down the crude import bill by Rs 1 lakh crore, the government is planning to formulate policies on the second-generation ethanol as well as methanol, non-conventional fuel resources. Union road transport and highways Minister Nitin Gadkari has said that draft policies on the two fuels would be prepared by the oil ministry for approval of the Cabinet.

Gadkari has said that if second-generation ethanol can be produced from bamboo, cotton straw, wheat straw, rice straw and bagass etc, it could lead to creation of 25 lakh rural jobs mostly in villages. He also said that it was decided to take second generation ethanol production on mission mode as India accounted for a huge Rs 6 lakh crore imports bill on crude per annum and exploring and generating indigenous alternative would cut crude imports by at least Rs 1 lakh crore. He noted that at present ethanol is derived from molasses, which is barely 119 crore litres as against a minimum requirement of about 500 crore litres.

The minister said that they get hardly 3% ethanol whereas they can mix 22% in petrol, therefore there is a shortage of 19%. He said the biofuel was not only cost-effective but a pollution free import substitute. The Minister said that in countries like the US and Brazil, there are flex engines of cars where 22% ethanol could be easily blended in petrol. The transport minister further said that in view of surplus cola production it has been decided to promote methanol output and oil Ministry will also bring a policy for production of methanol from coal. He said that as many as 150 petroleum products could be made from coal.

The CNX Nifty is currently trading at 8891.55, down by 5.15 points or 0.06% after trading in a range of 8879.20 and 8914.75. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.99%, Bharti Airtel up by 1.35%, Mahindra & Mahindra up by 1.31%, Yes Bank up by 1.27% and Tata Steel up by 0.89%. On the flip side, BPCL down by 3.63%, Coal India down by 2.29%, Idea Cellular down by 2.10%, TCS down by 1.30% and Grasim Industries down by 1.25% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 6.12 points or 0.29% to 2,091.64, Shanghai Composite was up by 6.58 points or 0.2% to 3,235.24, Nikkei 225 gained 11.52 points or 0.06% to 19,118.99 and Jakarta Composite rose 19.54 points or 0.36% to 5,402.41. On the flip side, Hang Seng decreased 119.25 points or 0.5% to 23,805.80 and FTSE Bursa Malaysia KLCI was down by 1.13 points or 0.07% to 1,692.71.