Sensex, Nifty recoup losses to trade flat

Indian equity benchmarks despite recouping most of the losses, traded on a mildly negative note in late afternoon session ahead of a slew of global events including the UK elections, European Central Bank's policy meet and testimony from ex-FBI director James Comey.  However, the broader markets showed some fervor and traded with notable gains, performing better than their larger peers. Investors remained cautious with Chief Economic Adviser Arvind Subramanian expressing concern over growing protectionism in global markets and felt that India needs open markets to grow at 8-10%. Some concerns also came with the RBI Governor Urjit Patel statements that rush for such actions may harm the country’s fiscal health and may have inflationary spillovers. He said that past episodes have shown when there are significant fiscal slippages they do permeate through inflation sooner or later. However, the markets pared losses taking support from UNCTAD’s latest report that India would be the top prospective foreign direct investment (FDI) destination globally after the U.S. 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. Meanwhile, the commerce and industry ministry will soon come out with the standard operating procedure (SOP) for clearance of foreign investments proposals as the government has abolished the FIPB.

On the sectoral front, stocks of steel companies were trading higher with BMI Research’s report that India is seen as a bright spot for the global steel production growth on account of the government's push to augment capacity and demand from the construction, automotive and infra sectors. It further said that the firms like SAIL and Tata Steel are expected to drive the steel output growth.

On the global front, European markets were trading in green as politics and monetary policy took center stage. Asian markets were also trading in green. Back home, in scrip specific development, Kushal Tradelink traded higher after the company incorporated a Wholly Owned LLP in the name of ‘Kushal Integrated Industrial Park LLP’ in the state of Gujarat on June 7, 2017 under the Limited Liability Partnership Act, 2008.

The BSE Sensex is currently trading at 31264.86, down by 6.42 points or 0.02% after trading in a range of 31211.01 and 31354.51. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.42%, while Small cap index was up by 0.42%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.82%, Metal up by 1.29%, Basic Materials up by 0.76%, Realty up by 0.40% and Bankex up by 0.27%, while IT down by 1.45%, TECK down by 1.23%, Oil & Gas down by 1.12%, Energy down by 0.69% and Telecom down by 0.64% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.90%, Sun Pharma up by 3.54%, Tata Steel up by 2.67%, HDFC up by 1.90% and Cipla up by 1.86%. On the flip side, TCS down by 3.36%, GAIL India down by 2.87%, Hero MotoCorp down by 1.27%, Asian Paints down by 1.23% and Infosys down by 1.09% were the top losers.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD), in its latest report ‘World Investment Report 2017’ has said that India would be the top prospective foreign direct investment (FDI) destination globally after the U.S. and China. The report however noted that although new liberalization efforts continue to improve the investment climate in India, tax-related concerns remain a deterrent for some foreign investors.

UNCTAD report 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 per cent in 2017. Besides, it has said that the country’s renewed policy efforts to attract FDI may also contribute to higher inflows in 2017, adding that foreign multinational enterprises (MNEs) are increasingly relying on cross-border M&As (mergers and acquisitions) to penetrate the rapidly growing Indian market.

It said that in major recipients such as China, India and Indonesia, renewed policy efforts to attract FDI could contribute to an increase of inflows in 2017. However, the report found that FDI in India remained almost flat in year 2016 at about $44 billion, up only 1 per cent from 2015. At the same time India's outward FDI declined by about third from $7.572 billion in 2015 to $5.12 billion in 2016. UNCTAD has also reported that FDI inflows to developing Asia shrank by 15 per cent to $443 billion in 2016, the first decline since 2012.

The CNX Nifty is currently trading at 9664.75, up by 0.85 points or 0.01% after trading in a range of 9643.05 and 9688.70. There were 22 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.97%, Sun Pharma up by 3.57%, Tata Motors - DVR up by 2.73%, Tata Steel up by 2.71% and Cipla up by 1.87%. On the flip side, TCS down by 3.39%, GAIL India down by 2.81%, Indian Oil Corp. down by 1.60%, HCL Tech down by 1.31% and Hero MotoCorp down by 1.21% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 3.43 points or 0.15% to 2,363.57, Shanghai Composite increased 10.01 points or 0.32% to 3,150.33, Taiwan Weighted increased 15.79 points or 0.15% to 10,225.78 and Hang Seng increased 88.9 points or 0.34% to 26,063.06. on the flip side, Nikkei 225 decreased 75.36 points or 0.38% to 19,909.26, Jakarta Composite decreased 3.36 points or 0.06% to 5,713.97 and FTSE Bursa Malaysia KLCI decreased 0.3 points or 0.02% to 1,785.62.

European Markets were trading mostly in green; France’s CAC increased 5.19 points or 0.1% to 5,270.72, Germany’s DAX increased 31.34 points or 0.25% to 12,703.83 and UK’s FTSE 100 decreased 0.99 points or 0.01% to 7,477.63.