Indian benchmarks continue to trade in red in noon session

Indian benchmarks continued to trade in red in the noon session as funds and retail investors indulged in booking profits at prevailing levels ahead of a speech by U.S. Federal Reserve Chair Janet Yellen, with expectations growing the Fed would raise interest rates soon. Several Fed officials have recently voiced their need for higher rates, which has seen the implied probability of a move this month shoot higher. On the domestic front, sentiments got undermined by the GST Council deciding to peg the peak goods and services tax (GST) rate at 40 per cent in the legislation instead of 28 per cent, giving it the flexibility to raise rates without having to reach out to Parliament. Though, the change in the peak rate will not alter the 4-slab rate structure of 5, 12, 18 and 28 percent agreed upon last year for the moment. Adding anxiety among market participants, a report by the foreign brokerage firm highlighted that even as global economy looks to be on a rather bumpy ride, Indian exports, which are mainly dependent on the US, China and Europe have still not recovered. India’s merchandise export growth turned decisively positive last September after nearly two years of contraction. However, losses remained capped with the report that the government is expected to soon announce relaxations in the foreign direct investment (FDI) policy in certain sectors, including single brand retail. The further liberalisation in the FDI policy is aimed at providing better business environment by removing impediments. The government last year relaxed FDI norms in over a dozen sectors, including defence, civil aviation, construction and development, private security agencies, real estate and news broadcasting. Some support also came with the report that the Competition Commission of India is assessing regulations across sectors in efforts to weed out ‘obsolete regulatory restrictions’ and improve the ease of doing business.

On the global front, Asian markets were trading in red on Friday as investors turned jittery after Wall Street retraced from record highs overnight, amid renewed expectations of an interest rate hike by the Federal Reserve later this month. Further, the US dollar index, a measure of the currency against a basket of global peers, was down 0.1% on Friday, after a rise of more than 1% over the previous two sessions.

Back home, stocks from Energy, Telecom and Realty counters were supporting the markets, while those from FMCG, Banking and Auto counters were adding to the underlying cautious undertone. In scrip specific development, Escorts surged after the company’s Agri Machinery Segment (EAM) in February 2017, sold 4,247 tractors, with a growth of 29.5% against 3,280 tractors in February 2016. On the other hand, Apollo Hospitals declined on reports that a unit of Malaysian sovereign fund Khazanah has launched a block deal to sell $160 million worth of shares in the company.

The market breadth remained pessimistic, as there were 1085 shares on the gaining side against 1352 shares on the losing side, while 140 shares remained unchanged.

The BSE Sensex is currently trading at 28762.90, down by 76.89 points or 0.27% after trading in a range of 28736.10 and 28847.97. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.17%, while Small cap index up by 0.02%.

The gaining sectoral indices on the BSE were Energy up by 1.06%, Telecom up by 0.95%, Realty up by 0.61%, Oil & Gas up by 0.46% and Utilities up by 0.41%, while FMCG down by 0.67%, Bankex down by 0.42%, Auto down by 0.39%, Capital Goods down by 0.38% and IT down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.78%, GAIL India up by 1.46%, Sun Pharma up by 0.87%, Axis Bank up by 0.77% and Adani Ports & SEZ up by 0.60%. On the flip side, HDFC down by 1.71%, Asian Paints down by 1.63%, ITC down by 1.38%, ICICI Bank down by 0.86% and Larsen & Toubro down by 0.80% were the top losers.

Meanwhile, amid the talks of India adopting 5G technology, which in present form can deliver up to 1000 mbps download speed, from this year, Telecom Regulatory Authority of India (Trai) chairman R S Sharma has said that India must make the most from the diverse applications under the upcoming 5G technology to solve some of its developmental problems in areas such as transport and agriculture.

5G is the next-generation mobile network which is expected to boost range and speed that the current 4G and 3G couldn’t cope to deliver. Telecom secretary J S Deepak had earlier said that India lagged behind in adoption of 3G and 4G but it wants to catch with the world for 5G technology.

Trai chief has suggested opting 5G technology as soon as possible, saying that “It's a fantastic technology and may help the government to solve some of its developmental problems in areas such as transport and agriculture”. He also said that 5G is an exciting area where application domains are going to be hugely diverse.

Mentioning use of 5G in various domains like transport, smart cities, agriculture and irrigation, Sharma pointed that individual domains must come ahead and explore the application scenarios of it. Further, he mentioned that the 2G/3G/4G applications are communication applications but 5G involves a use of technology in areas not traditionally connected with the communication system.

The CNX Nifty is currently trading at 8872.30, down by 27.45 points or 0.31% after trading in a range of 8862.45 and 8898.50. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 4.55%, Reliance Industries up by 2.53%, Hindalco up by 2.22%, Grasim Industries up by 1.75% and GAIL India up by 1.59%. On the flip side, Bosch down by 1.94%, HDFC down by 1.86%, Asian Paints down by 1.57%, BPCL down by 1.54% and ITC down by 1.49% were the top losers.

All the Asian markets were trading in red, Hang Seng declined by 139.42 points or 0.59% to 23,588.65, Nikkei 225 decreased by 122.52 points or 0.63% to 19,442.28, Taiwan Weighted slipped by 43.59 points or 0.45% to 9,648.21, KOSPI Index lost 23.43 points or 1.11% to 2,079.22, Shanghai Composite edged lower 15.38 points or 0.48% to 3,214.64, Jakarta Composite declined by 11.87 points or 0.22% to 5,396.38 and FTSE Bursa Malaysia KLCI was down by 7.08 points or 0.41% to 1,708.59.