Sensex slips into red again lacking any supportive cues

Indian benchmarks have pared all their gains and the Sensex has slipped into red in the noon trade, though the losses are modest but the markets seem to have lost their momentum once again with not much supportive cues in sight. While the Asian peers barring few, too are in red, the domestic investors are looking cautious due to geo-political worries. Traders were going for select blue-chips ahead of key economic numbers like industrial production (IIP) for February and consumer inflation for March to be released on Wednesday. Meanwhile, former finance minister P Chidambaram has said that a rush to roll out the new tax regime from July 1 could be detrimental and fitment of items holds the key to the success of the new tax regime. He added that the GST Bills are far from perfect and several provisions could call for amendments over the coming two years or so. Back on street, while the broader markets continue to outperform the benchmarks, on the sectoral front oil & gas and metals have taken the lead , supporting the markets to some extent, on the other hand the IT and tech stocks are still in the somber mood despite the Commerce Minister Nirmala Sitharaman stating that the government is holding talks with the US administration and is also working with the industries in this regard.

The BSE Sensex is currently trading at 29682.68, down by 23.93 points or 0.08% after trading in a range of 29676.80 and 29831.32. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were outperforming the benchmarks and were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index added 0.71%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.30%, Metal up by 0.78%, PSU up by 0.77%, Energy up by 0.72%, Basic Materials up by 0.68%, while IT down by 0.30%, Realty down by 0.15%, Utilities down by 0.13%, TECK down by 0.05%, Consumer Durables down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.62%, Adani Ports & SEZ up by 1.34%, Coal India up by 1.09%, Tata Motors up by 1.09% and ONGC up by 0.64%. On the flip side, Wipro down by 1.41%, Asian Paints down by 1.17%, NTPC down by 0.92%, HDFC down by 0.91% and Hero MotoCorp down by 0.65% were the top losers.

Meanwhile, raising concerns over the government high support for banks, credit rating agency, Fitch ratings in its latest report has said that the government’s excessive backing to banks in order to deal with stressed assets and loose macro-economic policy that could stoke inflation, would prove ‘negative’ for Indian economy. However, the agency noted that government's fiscal initiatives would help the country to reduce debt burden more rapidly than expected in the medium term.

Fitch ratings in its ‘Asia-Pacific Sovereign Overview for April-June quarter’ report further said that further deviation of the already-high public-debt burden from the peer median, which may be caused by stalling fiscal consolidation or greater-than-expected deterioration in the banking sector's asset quality that would prompt large-scale sovereign financial support...(are) negative sensitivities.

The rating agency further said that loose macroeconomic policy settings that cause a return of persistently high inflation and a widening current-account deficit, would increase the risk of external funding stress. However, it said that an improved business environment resulting from implemented reforms and persistently contained inflation, would support higher private investment and real GDP growth would be positive. Besides, demonetisation could help boost government revenue by moving economic activity from the informal to the formal sector, although withdrawal of high-value currency created a cash crunch, hurting economic activity in the short term.

Fitch has Fitch has a 'BBB-minus', the lowest investment-grade rating on India with a 'stable' outlook.  It has rated India as stable on account of strong medium-term growth outlook and favourable external balances against weak fiscal position and a business environment which is still difficult.

The CNX Nifty is currently trading at 9200.00, up by 1.70 points or 0.02% after trading in a range of 9191.10 and 9225.65. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corp. up by 3.69%, BPCL up by 3.64%, Bharti Infratel up by 3.15%, Yes Bank up by 2.07% and Adani Ports & SEZ up by 1.53%. On the flip side, Indiabulls Housing down by 2.57%, Wipro down by 1.49%, Asian Paints down by 1.39%, NTPC down by 1.34% and HDFC down by 0.99% were the top losers.

Most of the Asian markets were trading in red, Shanghai Composite declined by 18.78 points or 0.57% to 3,267.83, KOSPI Index was lower by 18.41 points or 0.86% to 2,133.32, Hang Seng was down by16.15 points or 0.07% to 24,251.15, Jakarta Composite was lower by 4.69 points or 0.08% to 5,648.79 and FTSE Bursa Malaysia KLCI was down by 2.99 points or 0.17% to 1,738.73.

On the other hand, Taiwan Weighted was up by 9.17 points or 0.09% to 9,882.54 and Nikkei 225 gained 133.25 points or 0.71% to 18,797.88.