Markets continue lackluster trade; Nifty hovers near 9650 mark

Mirroring weak European markets, Indian equity benchmarks continued their lackluster trade in late afternoon session with the Sensex falling more than 100 points and the Nifty breaching 9650 level. Profit-booking after two consecutive sessions of touching new highs pulled the markets lower. Besides, caution ahead of the Reserve Bank of India's Monetary Policy Committee (MPC) meet, coupled with heavy selling pressure in Consumer Durables, Realty and Power stocks, eroded the investors' risk-taking appetite.  Traders paid no heed towards NITI Aayog CEO Amitabh Kant’s statement that the Goods and Services Tax, to be rolled out next month as the biggest tax reform since independence, will help India achieve 9 per cent growth rate. He further said that GST will simplify India's taxation system and help deal with tax evasion. Meanwhile, the government is considering further relaxing foreign direct investment norms in the defence sector with a view to attract more overseas inflows.

On the global front, European markets were trading in red amid a political rift between Qatar and several other Arab countries and as investors take a cautious approach ahead of a general election in the UK and a European Central Bank (ECB) meeting. Asian markets were also trading in red. Back home, in scrip specific development, Hindustan Petroleum Corporation (HPCL) edged higher on the plan to raise Rs 27000 crore in debt for its 9 million tonnes per annum (mtpa) Rajasthan refinery.

The BSE Sensex is currently trading at 31207.27, down by 102.22 points or 0.33% after trading in a range of 31186.53 and 31430.32. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.64%, while Small cap index was down by 0.74%.

The only gaining sectoral indices on the BSE were IT up by 2.48% and TECK up by 1.76%, while Consumer Durables down by 1.87%, Realty down by 1.54%, Power down by 1.40%, FMCG down by 1.31% and Industrials down by 1.31% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.57%, Infosys up by 2.07%, Wipro up by 1.51%, Adani Ports & SEZ up by 1.07% and Dr. Reddy’s Lab up by 0.85%. On the flip side, Tata Motors down by 3.85%, ONGC down by 2.19%, ITC down by 2.08%, NTPC down by 1.78% and Larsen & Toubro down by 1.53% were the top losers.

Meanwhile, in order to attract more overseas inflows, the government is now considering further relaxing foreign direct investment (FDI) norms in the defence sector. In a meeting attended by industry chambers including CII and FICCI, the ministry asked the stakeholders suggestions for changes in FDI policy to attract foreign investors.

In India presently FDI up to 49 per cent is permitted in the sector through automatic route and beyond that up to 100 per cent via government nod is permitted. Government is the only procurer of defence equipment in the country, besides, the export of defence products from India is also very regulated. At the meeting industry experts stated that foreign investors seek assured orders before setting up manufacturing unit in any country.

The government had recently cleared the Strategic Partnership (SP) policy to create a vibrant defence manufacturing ecosystem in the country through involvement of both the major Indian corporates as well as the MSME sector. The policy is also likely to reduce current dependence on imports and gradually ensure greater self-reliance & dependability of supplies essential to meet national security objectives.

The CNX Nifty is currently trading at 9646.70, down by 28.40 points or 0.29% after trading in a range of 9634.75 and 9709.30. There were 15 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 3.73%, TCS up by 3.51%, Infosys up by 2.24%, Tech Mahindra up by 2.20% and Wipro up by 1.46%. On the flip side, Tata Motors down by 3.92%, Tata Motors - DVR down by 3.26%, ONGC down by 2.36%, Bank of Baroda down by 2.27% and Indiabulls Housing Finance down by 2.09% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 190.92 points or 0.95% to 19,979.90, Jakarta Composite decreased 37.94 points or 0.66% to 5,710.29, Taiwan Weighted decreased 20.66 points or 0.2% to 10,206.18 and KOSPI Index decreased 3.1 points or 0.13% to 2,368.62. On the flip side, FTSE Bursa Malaysia KLCI increased 3.02 points or 0.17% to 1,790.97, Shanghai Composite increased 10.47 points or 0.34% to 3,102.13 and Hang Seng increased 134.15 points or 0.52% to 25,997.14.

All the European markets were trading in red; Germany’s DAX decreased 60.27 points or 0.47% to 12,762.67, France’s CAC decreased 32.32 points or 0.61% to 5,275.57 and UK’s FTSE 100 decreased 21.13 points or 0.28% to 7,504.63.