Benchmarks pare gains to trade red in early deals

Erasing all their initial gains, Indian equity benchmarks have entered into red terrain as traders remained on sidelines ahead of the two-day policy review by RBI’s monetary policy committee (MPC) starting today. Meanwhile, Prime Minister Narendra Modi has reviewed preparations for the rollout of the goods and services tax (GST) regime from July 1, and said it would be 'a turning point' for the economy. He has asserted that the implementation of GST is the culmination of the concerted efforts of all stakeholders, including political parties, trade and industry bodies. However, traders were taking some sense of relief with a private report that India has surpassed China to secure the top position among 30 developing countries on ease of doing business.

On the global front, Asian markets trading mostly in red at this point of time tailing the US counterparts, with investors opting for a note of caution following a seven-week surge for global stocks. Japanese market too was lower, as the yen rose to the highest level in more than a month. The US markets snapped their gaining streak and ended modestly lower in last session after a lackluster trade.

Back home, the market breadth indicating the overall health of the market was weak, with 784 shares gaining and 1,127 shares declining, while a total of 88 shares were unchanged. In scrip specific developments, SBI edged higher by around a percent after the country’s largest lender launched share sales through private placement to raise about Rs 11,000 crore to shore up its capital adequacy ratio. Cadila Healthcare advanced around two percent on receiving Establishment Inspection Report (EIR) from United States Food and Drug Administration (USFDA) for Baddi facility.

The BSE Sensex is currently trading at 31306.84, down by 2.65 points or 0.01% after trading in a range of 31251.90 and 31430.32. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index shed 0.19%, while Small cap index was down by 0.11%.

The few gaining sectoral indices on the BSE were IT up by 2.42%, TECK up by 1.79% and PSU was up by 0.10%, while FMCG down by 1.29%, Realty down by 0.84%, Telecom down by 0.61%, Power down by 0.56% and Consumer Durables down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.42%, Infosys up by 2.36%, GAIL India up by 1.31%, SBI up by 0.99% and HDFC up by 0.87%. On the flip side, ITC down by 2.11%, ONGC down by 1.45%, Cipla down by 1.20%, Lupin down by 1.00% and Asian Paints down by 0.99% were the top losers.

Meanwhile, citing India’s rapidly expanding economy, relaxation of foreign direct investment (FDI) rules and a consumption boom as the key drivers, the 2017 Global Retail Development Index (GRDI), titled ‘The Age of Focus’, ranked India at top position among 30 developing countries on ease of doing business. India has surpassed China to secure the top position, as last year India was at second position behind China.

The management consulting firm A T Kearney’s index stated that India’s retail sector has been growing at an annual rate of 20 percent. Total sales surpassed the $1 trillion-mark last year and the sector is expected to double in size by 2020. Rapid urbanisation and a growing middle class with higher income levels are driving up consumption across the country. It also noted that the government’s continued support to relax FDI regulations in key areas of the retail sector have provided further boost to its growth.

As per the report, Indian government’s effort to boost cashless payments (witnessed in the recent nationwide demonetisation exercise) and reform indirect taxation with a nationwide goods and services tax (GST) are also expected to accelerate adoption of formal retail. It also stated that India’s top ranking is a clear vote of confidence in its retail market and vast growth potential.

GRDI, in its 16th edition, ranked the top 30 developing countries for retail investment worldwide and analysed 25 macroeconomic and retail-specific variables. GRDI ranked China in second place. Despite its slower overall economic growth, the market’s size and the continued evolution of retail still make China one of the most attractive markets for retail investment.

The CNX Nifty is currently trading at 9662.85, down by 12.25 points or 0.13% after trading in a range of 9652.55 and 9709.30. There were 10 stocks advancing against 40 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were TCS up by 3.36%, HCL Tech up by 3.02%, Infosys up by 2.02%, Tech Mahindra up by 1.75% and GAIL India up by 1.21%. On the flip side, ITC down by 2.21%, ONGC down by 1.62%, Indiabulls Housing down by 1.53%, Cipla down by 1.46% and Asian Paints down by 1.34% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 137.6 points or 0.68% to 20,033.22, Taiwan Weighted shed 26.44 points or 0.26% to 10,200.40, Jakarta Composite dropped 18.51 points or 0.32% to 5,729.73 and Shanghai Composite was down by 6.7 points or 0.22% to 3,084.95.

On the flip side, FTSE Bursa Malaysia KLCI gained 1.17 points or 0.07% to 1,789.12 and Hang Seng was up by 90 points or 0.35% to 25,952.99.