Key benchmarks hover near the day's low

Indian equity benchmarks extended their losses and were hovering near lowest point of the day in the afternoon session, on account of selling in frontline blue chip counters amidst weakness in global peers. The mood on the street remained cautious with the report that Industrial production shrank 1.2% in February against a 3.3% rise in January, while Consumer inflation accelerated to 3.81% in March largely due to increased fuel prices. The decline in Industrial production was broad-based with manufacturing contracting 2%, mining reporting a 3.3% rise in February and electricity generation remaining stagnant at 0.3%. Moreover, lower-than-expected January-March earnings posted by the country's second-largest software services company Infosys also dampened trading sentiment. In scrip specific development, Sterling Tools was up by over six and half percent after signing a business collaboration agreement with a Japan based Company named Meidoh Co.

On the global front, Asian markets were trading mostly in red, following the weak cues overnight from Wall Street amid lingering geopolitical concerns, while U.S. dollar slumped after President Donald Trump said that the greenback was getting too strong and he will not label China a currency manipulator. Back home, the BSE Sensex is currently trading at 29527.44, down by 116.04 points or 0.39% after trading in a range of 29527.24 and 29660.48. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was down by 0.01%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.83%, Energy up by 0.63%, PSU up by 0.41%, Realty up by 0.38% and Healthcare up by 0.30%, while Metal down by 2.31%, IT down by 1.70%, TECK down by 1.53%, Basic Materials down by 1.10% and Telecom down by 0.99% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 0.84%, ICICI Bank up by 0.82%, HDFC up by 0.79%, Reliance Industries up by 0.76% and Bajaj Auto up by 0.68%. On the flip side, Tata Steel down by 2.52%, Infosys down by 2.36%, Adani Ports &SEZ down by 2.27%, TCS down by 1.92% and Tata Motors down by 1.89% were the top losers.

Meanwhile, the Fiscal Responsibility and Budget Management (FRBM) review committee chaired by former Revenue Secretary N.K. Singh, has recommended the government to set the fiscal deficit target at 3% of the Gross Domestic Product (GDP) in coming years up to March 2020 and slowly reducing it to 2.8 per cent in 2020-21 fiscal and to 2.5 per cent by 2022-2023. In the financial year 2016-17, the fiscal deficit was 3.5 per cent of GDP.

Calling for more focus on debt-to-GDP ratio, its recommendation for the fiscal deficit for the current fiscal is lower than 3.2 percent that Finance Minister Arun Jaitley has set for himself in the Budget for 2017-18. The high level panel recommended combined debt-to-GDP of 60 per cent by 2023, 40 per cent for the central government and 20 per cent for State governments. It also suggested lowering revenue deficit to GDP ratio by 0.25 percentage points each year by bringing it down to 0.8 per cent in FY2023 from 2.3 per cent in FY2017.

However, the panel suggested ‘escape clause’ in case of over-riding consideration of national security, acts of war, calamities of national proportion and collapse of agriculture severely affecting farm output and incomes. It said that far-reaching structural reforms in the economy with unanticipated fiscal implications too can trigger deviation from the targets. It also stated that the deviations from the stipulated fiscal deficit target shall not exceed 0.5 percentage points in a year.

The FRBM panel recommended constituting a three-member Fiscal Council to prepare multi-year fiscal forecasts and a debt and fiscal sustainability analysis that makes projections on key fiscal indicators. It is to provide an independent assessment of the central government's fiscal performance and compliance with targets as also advice if conditions exist to permit a deviation for invocation in the escape or buoyancy clause.

The CNX Nifty is currently trading at 9173.35, down by 30.10 points or 0.33% after trading in a range of 9169.80 and 9202.65. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corp. up by 2.68%, BPCL up by 2.14%, Bank of Baroda up by 1.97%, Indiabulls Housing up by 1.85% and Power Grid up by 0.96%. On the flip side, Hindalco down by 3.58%, Infosys down by 2.52%, Bharti Infratel down by 2.27%, Adani Ports &SEZ down by 2.26% and Tata Steel down by 2.22% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 125.77 points or 0.68% to 18,426.84, FTSE Bursa Malaysia KLCI dipped 4.86 points or 0.28% to 1,739.22, Jakarta Composite was down by 0.42 points or 0.01% to 5,643.74 and Shanghai Composite declined 0.21 points or 0.01% to 3,273.62.

On the flip side, Taiwan Weighted increased 19 points or 0.19% to 9,836.68, KOSPI Index was up by 19.7 points or 0.93% to 2,148.61 and Hang Seng added 37.55 points or 0.15% to 24,351.05.