Benchmarks manage to keep head above water in early deals

Indian equity benchmarks have made a cautious start and are managing to keep their head above water in early deals on Thursday, as investors remained stock-specific in the March quarter earnings season. Gains remained capped as traders stayed cautious with Chief Economic Adviser Arvind Subramanian’s statement that India’s high economic growth rate last fiscal may not reflect the actual impact of demonetisation particularly on the informal sector and it may take a few months to assess its real fallout. Meanwhile, Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 673.38 crore, while Domestic Institutional Investors (DIIs) bought shares worth a net Rs 525.52 crore on April 19, 2017.

On the global front, Asian markets were trading mostly in green at this point of time. The Japanese market was up as the country’s exports grew at the fastest rate in more than two years in March, supporting a moderate economic recovery, on the other hand the Chinese market was flat after four days of losses. The US markets made a mixed closing in last session, as traders reacted to the latest earnings news as well as a steep drop by the price of crude oil.

Back home, stocks of infrastructure counter edged higher, as the government has approved the policy guidelines to allow financially sound state government entities to borrow directly from bilateral ODA (Official development Assistance) partners for implementation of vital infrastructure projects. Sugar stocks too remained on buyers’ radar with the government’s decision to extend stock limits on sugar traders by another six months till October 2017 to check sweetener prices that are ruling at Rs 42-44 per kg. The move will enable state governments to impose stock limits and licensing requirements in respect of sugar.

The BSE Sensex is currently trading at 29372.19, up by 35.62 points or 0.12% after trading in a range of 29341.68 and 29403.63. There were 13 stocks advancing against 16 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index rose 0.45%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Realty up by 0.95%, Consumer Durables up by 0.68%, Basic Materials up by 0.68%, Utilities up by 0.55% and Oil & Gas was up by 0.54%, while Bankex down by 0.64%, Power down by 0.02% and Metal was down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were GAIL India up by 3.95%, Adani Ports up by 1.90%, HDFC up by 1.37%, HDFC Bank up by 1.10% and ONGC was up by 0.75%. On the flip side, ICICI Bank down by 2.74%, Axis Bank down by 2.25%, Power Grid down by 0.59%, NTPC down by 0.49% and Hero MotoCorp was down by 0.38% were the top losers.

Meanwhile, raising concern over the H-1B visa issue, the industry body, Associated Chambers of Commerce and Industry of India (Assocham) in its latest report has said that tightening H-1B visa regime in the United States will force IT giants to create fundamental changes to their strategies in terms of hiring, salaries and jobs, which could impact employees in India too. It further stated that as the cost pressure would increase, aggravated by rising rupee leading to lower realizations, Indian IT companies may be forced to displace workforce and added that in that case, the chances of layoffs are real.

As per the Assocham report, nearly 86% of the H-1B visas issued for workers in the computer space go to Indians and this figure is now sure to be scaled down to about 60% or even less. Cautioning against a huge decline in remittances from US, Assocham said that the US move could disturb remittances by 8-10 percent. As per the World Bank data the US was the second largest source of remittance for India in 2015, behind Saudi Arabia, and about $10.96 billion, nearly 16% of the total inflows, were sent to India.

The industry body further said that with Britain already hiking the minimum wage requirement to euro 35,000 for tier II visa immigrants, this latest move by the US will act as a definitive dampener to the Indian outsourcing industry. As per its report, the alternate solutions for the Indian outsourcing industry are investing near shore centres - facilities close to the US, focus on local hiring in America, and to work virtually, which is becoming easier with the wider adoption of cloud services and greater digitisation.

The CNX Nifty is currently trading at 9114.95, up by 11.45 points or 0.13% after trading in a range of 9102.65 and 9126.50. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 4.36%, Grasim Industries up by 3.16%, Adani Ports up by 1.95%, HDFC up by 1.46% and Kotak Mahindra Bank was up by 1.38%. On the flip side, Yes Bank down by 4.08%, ICICI Bank down by 2.51%, Axis Bank down by 2.05%, Tata Power down by 0.88% and Aurobindo Pharma was down by 0.77% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI rose 1.8 points or 0.1% to 1,740.75, KOSPI Index gained 8.49 points or 0.4% to 2,146.89, Nikkei 225 increased 55.32 points or 0.3% to 18,487.52 and Hang Seng was up by 95.51 points or 0.4% to 23,921.39.

On the flip side, Taiwan Weighted decreased 13.53 points or 0.14% to 9,626.41, Shanghai Composite slipped 2.16 points or 0.07% to 3,168.53 and Jakarta Composite was down by 1.19 points or 0.02% to 5,605.33.