Benchmarks trim losses; trade continues in red

After trading at lowest point of the day, Indian equity benchmarks trimmed their losses but continued to trade below neutral line in late afternoon session as selling pressure witnessed in Metal, Telecom and Basic Materials stocks subdued investors’ sentiments amid mixed global cues. The markets erased some of their losses with Global rating agency Fitch’s report that India's GDP, after taking into account the impact of demonetization, to grow by 7.1 per cent for FY16-17, before picking up to 7.7 per cent in both FY17-18 and FY18-19. The global rating agency observed that gradual implementation of the structural reform agenda is expected to contribute to higher growth, as will higher real disposable income, supported by an almost 24 per cent hike in civil servants’ wages at the state level. On sectoral front, some of the pharma sector stocks came under pressure with report that growth of the domestic pharmaceutical industry is expected to remain moderate due to slowing growth in the US, increased regulatory scrutiny and consolidation of supply chain in the US market.

On the global front, European markets were trading mixed as investors digested new economic data and grew optimistic of a new interest rate hike in the U.S. as early as this month. However, Asian markets were trading in green, despite the negative cues overnight from Wall Street. Back home, in scrip specific development, Brooks Laboratories was trading in green after the company commenced commercial production at its New Manufacturing Unit-II, Vadodara, Gujarat.

The BSE Sensex is currently trading at 29009.82, down by 38.37 points or 0.13% after trading in a range of 28957.68 and 29098.17. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.19%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.71%, Power up by 0.41%, Oil & Gas up by 0.28%, Industrials up by 0.27% and Capital Goods up by 0.23%, while Metal down by 1.65%, Telecom down by 0.65%, Basic Materials down by 0.56%, Realty down by 0.39% and Healthcare down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special Economic Zone up by 1.85%, TCS up by 1.14%, ONGC up by 1.11%, Wipro up by 0.79% and Power Grid up by 0.41%. On the flip side, Tata Steel down by 1.91%, Axis Bank down by 1.42%, Bharti Airtel down by 1.20%, SBI down by 1.00% and Lupin down by 0.99% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that growth of the domestic pharmaceutical industry is expected to remain moderate due to slowing growth in the US, increased regulatory scrutiny and consolidation of supply chain in the US market. However, the agency also said that the adequate scale and drug development capabilities gained by industry would help to keep them in good stead to capture new opportunities in the US market.

The report noted the slowdown in revenue growth from the US, which dropped to 12 per cent in the first nine months of the current fiscal from 15 per cent in the last fiscal, 2015-16 and 33 per cent CAGR during 2011-15 despite consolidation and currency benefits. Further, it added that the continued regulatory interventions in domestic market are expected to put some pressure in near term though long-term growth prospects for domestic pharmaceutical market remain healthy given increasing penetration, accessibility and continued new launches.

The rating agency said that the domestic formulations business of companies within their sample registered growth of 9.3% in Q3 FY2017 as against 14.1% in Q2 FY2017, with demonetization resulting in channel de-stocking though the growth should come back in the next few months. The report however said the domestic pharma industry has gained adequate scale and drug development capabilities over the last decade of growth which would “keep them in good stead to capture new opportunities in the US market”.

The CNX Nifty is currently trading at 8949.70, down by 13.75 points or 0.15% after trading in a range of 8932.80 and 8977.85. There were 24 stocks advancing against 26 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Adani Ports & Special economic zone up by 1.73%, BPCL up by 1.21%, ONGC up by 1.21%, TCS up by 1.07% and Wipro up by 0.96%. On the flip side, Hindalco down by 3.08%, Tata Steel down by 1.91%, Axis Bank down by 1.47%, Lupin down by 1.17% and Yes Bank down by 1.16% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.55 points or 0.09% to 1,728.91, Shanghai Composite increased 8.54 points or 0.26% to 3,242.41, KOSPI Index increased 12.69 points or 0.61% to 2,094.05, Taiwan Weighted increased 55.44 points or 0.57% to 9,738.07 and Hang Seng increased 84.79 points or 0.36% to 23,681.07. On the flip side, Nikkei 225 decreased 34.99 points or 0.18% to 19,344.15 and Jakarta Composite decreased 20.6 points or 0.38% to 5,389.22.

European Markets were trading mixed; France’s CAC decreased 7.82 points or 0.16% to 4,964.37 and Germany’s DAX decreased 5.17 points or 0.04% to 11,953.23. On the flip side, UK’s FTSE 100 increased 7.52 points or 0.1% to 7,357.64.