Indian benchmarks settle with moderate losses; Nifty ends below 9650 mark

It turned out to be a lethargic performance from Indian benchmark indices on Thursday, as they failed to snap the session in the green territory and settled marginally below the neutral line. Today’s session largely remained characterized by choppiness, as the aimless indices moved only sideways in a tight band for most part of the day, as investors and foreign funds were adopting a cautious approach, ahead of key political and economic events in the U.S. and Europe. Sentiments remained subdued after Reserve Bank of India (RBI) raised concerns over the possibility of fiscal slippages due to the farm loan waivers. RBI Governor Urjit Patel said unless that state governments' budgets allow that fiscal space to go in for a loan waiver, it would be risky to tread on that path.  RBI also cut the economic growth projection to 7.3% for the current fiscal from 7.4% earlier. The central bank, however, used a less hawkish tone and reduced the Statutory Liquidity Ratio (SLR) in its second bi-monthly monetary policy for financial year 2017-18.

Traders turned anxious after chief economic adviser Arvind Subramanian expressed his unhappiness over the Reserve Bank's inflexibility on interest rates. He warned that real policy rates are becoming tighter and rising at a time of low inflation and slowing growth. However, losses remained capped with UNCTAD’s latest report that India would be the top prospective foreign direct investment (FDI) destination globally after the US and China. It also said that an improved economic outlook in major Asian economies such as India, China is likely to lift investor confidence and help boost FDI inflows by about 15 percent in 2017.

On the global front, Asian equity markets made a mixed closing on Thursday,  as investors braced for any surprises from the UK elections, the European Central Bank's policy meeting and congressional testimony from ex-FBI director James Comey who was fired by President Donald Trump last month. The British pound held firm at $1.2957, near its highest levels in two weeks, supported in part by polls showing Prime Minister Theresa May is on course to increase her majority in parliament. Japanese shares ended lower as the yen edged higher in late Asian deals on a report that the Bank of Japan was re-calibrating its communications to acknowledge it is thinking about how to handle a withdrawal from its monetary stimulus. However, Chinese shares ended higher after Chinese exports and imports data topped expectations. Exports advanced 8.7% year-on-year in dollar terms in May, while Imports climbed 14.8%.

Back home, many liquor stocks gained traction after Karnataka state government decided to send a proposal to the union government seeking to denotify the national highways (NH) pass through urban local bodies in Karnataka as local roads. Likewise, shares of steel companies were trading higher in an otherwise subdued market on the expectations of a revival in consumption during the current financial year 2017-18. The market breadth remained pessimistic, as there were 1328 shares on the gaining side against 1351 shares on the losing side, while 177 shares remained unchanged.

Finally, the BSE Sensex declined 57.92 points or 0.19 % to 31213.36, while the CNX Nifty was down by 16.65 points or 0.17% to 9,647.25. 

The BSE Sensex touched a high and a low of 31354.51 and 31193.77, respectively and there were 13 stocks on gainers side as against 17 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.23%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.64%, Metal up by 0.72%, Basic Materials up by 0.38%, Power up by 0.25% and Industrials up by 0.01%, while Oil & Gas down by 1.38%, IT down by 1.33%, TECK down by 1.19%, Energy down by 0.91% and Telecom down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.79%, Sun Pharma up by 3.38%, HDFC up by 2.28%, Cipla up by 1.77% and Tata Steel up by 1.61%. On the flip side, TCS down by 3.59%, GAIL India down by 3.44%, Asian Paints down by 1.61%, Hero MotoCorp down by 1.55% and ICICI Bank down by 1.42% were the top losers.

Meanwhile, giving an overview of his three-year-old government, Prime Minister Narendra Modi has said that there has been a record jump in Foreign Direct Investment (FDI) from $34,487 billion to $61,724 billion since 2013. Terming India a bright spot in the cloudy global economy, he said that doing business here has been made easier and the tax regime is more predictable and stable. He pointed out that the goods and services tax (GST) regime is also going to have long standing benefits for the nation.

Talking about his 'guiding tenet-reform to transform', Modi said that the reform agenda of government is comprehensive and inclusive, covering all sections of society, all regions of India and all aspects needing attention. He also said that it was a matter of immense happiness that a friendly spirit of competition has developed among the states for accelerating reforms and getting more investment.

On matters related to next-gen infrastructure for a new India, PM said that they are giving the added push to infrastructure projects with a special emphasis on timely completion. Adding further, he said that the government’s goal is a new India, powered by the skills and talent of the youth. He also said that substantial ground has been covered in the last three years and India is poised to scale newer heights of progress.

The CNX Nifty traded in a range of 9,688.70 and 9,641.50. There were 23 stocks in green as against 28 stocks in red on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.67%, Sun Pharma up by 3.41%, HDFC up by 1.98%, Cipla up by 1.66% and Aurobindo Pharma up by 1.55%. On the flip side, GAIL India down by 4.31%, TCS down by 3.64%, IOC down by 2.13%, HCL Tech down by 1.65% and Hero MotoCorp down by 1.54% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 0.34 points to 7,478.96, Germany’s DAX increased 38.49 points or 0.3% to 12,710.98 and France’s CAC increased 9.82 points or 0.19% to 5,275.35.

Asian equity markets made a mixed closing on Thursday as investors awaited directional cues from three big upcoming events today and next week's Federal Reserve meeting. The European Central Bank (ECB) will announce its latest interest rate decision later today, with traders on the lookout for any hints of policy changes on rate and stimulus outlook. Polls have opened in the UK with the latest polls predicting a narrow victory for Theresa May's party over the main opposition Labour Party. Former FBI Director James Comey's testimony before the Senate Intelligence Committee also remained in the spotlight after he confirmed media reports that President Donald Trump demanded his loyalty and asked him to drop at least part of the bureau's investigation of former National Security Adviser Mike Flyn. Japanese shares ended lower as the yen edged higher in late Asian deals on a report that the Bank of Japan was re-calibrating its communications to acknowledge it is thinking about how to handle a withdrawal from its monetary stimulus. Meanwhile, Chinese shares ended higher after Chinese exports and imports data topped expectations. Exports advanced 8.7 percent year-on-year in dollar terms in May, faster than the 7.2 percent increase economists had forecast. Imports climbed 14.8 percent, much above expectations for 8.3 percent growth.