Weakness persist in markets; Nifty below 9,600 mark

Maintaining their subdued stance, Indian benchmark indices continued to trade in red in noon session as funds and retail investors engaged in reducing positions ahead of US Federal Reserve's policy outcome. Fed may provide more clues on how it plans to reduce its holdings of more than $4 trillion in Treasuries and mortgage-backed securities. Sentiments remained downbeat with a private report stating that  Indian employers expect steady hiring outlook for next three months, but their confidence have dipped to the least optimistic level since 2005 amid uncertainties in global markets. Further, traders turned jittery over the private report indicating that over 65% of the total Rs 9.50 lakh crore of agri debt may potentially get written-off. Maharashtra followed Uttar Pradesh in announcing a debt waiver for the farmers, which is expected to drill a Rs 30,000 crore hole for the state exchequer. However, losses remained capped with reports that the government is working on a new industrial policy with a view to promoting and developing frontier technologies, innovation and enhancing competitiveness of domestic products. Meanwhile, many PSU Banks gained traction after the Reserve Bank of India announced steps to speed up NPA resolution process by identifying 12 accounts that can be immediately taken up under the Insolvency and Bankruptcy Code (IBC). The gross bad debt of the Indian banking system as of March was at Rs 7.11 lakh crore, which means the 12 accounts would be responsible for about Rs 1.78 lakh crore.

On the global front, Asian markets were trading mixed on Wednesday, as investors everywhere awaited clarity on Fed's future path for US policy after a likely rate rise later in the day. The Fed is widely expected to raise its benchmark interest rate this week due to a tightening labour market and may also provide more details on its plans to shrink the mammoth bond portfolio it amassed to nurse the economic recovery. Adding the pessimism among traders, Economic data out of China showed retail sales and industrial output topped forecasts in May, but a miss in urban investment reinforced views the world's second-largest economy will soon start to lose some momentum as lending costs rise and the property market cools. Meanwhile, Wall Street had been in a more confident mood overnight notching record closing peaks for all the major indices.

Back home, stocks from Energy, Oil & Gas and Realty counters were supporting the markets, while those from Metal, FMCG and Basic Materials counters were adding to the underlying cautious undertone. In scrip specific development, Emkay Global Financial Services surged after the company entered into an exclusive pact with DBS Bank arm DBS Vickers Securities (Singapore) for sharing knowledge, co-branding and distribution of equity research to the latter's global clients. Furthermore, Greaves Cotton gained after the company entered into a technology partnership with Pinnacle Engines Inc. US, for launch of a revolutionary Opposed Piston Petrol/CNG lean burn BSVI-compliant engine for 3-wheelers in India.

The market breadth remained pessimistic, as there were 954 shares on the gaining side against 1377 shares on the losing side, while 124 shares remained unchanged.

The BSE Sensex is currently trading at 31070.76, down by 32.73 points or 0.11% after trading in a range of 31054.94 and 31183.11. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.53%, while Small cap index down by 0.14%.

The top gaining sectoral indices on the BSE were Energy up by 1.24%, Oil & Gas up by 0.53%, Realty up by 0.26% and Capital Goods up by 0.05%, while Metal down by 0.85%, FMCG down by 0.76%, Basic Materials down by 0.69%, Power down by 0.43% and Utilities down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.73%, Dr. Reddy’s Lab up by 2.01%, Power Grid up by 0.88%, Hero MotoCorp up by 0.82% and TCS up by 0.67%. On the flip side, Wipro down by 2.31%, Cipla down by 1.76%, Asian Paints down by 1.64%, ITC down by 1.21% and HDFC down by 1.17% were the top losers.

Meanwhile, after changing the base year for the calculation of the Index of Industrial Production (IIP) as well as the Wholesale Price Index (WPI), the Central Statistics Office (CSO) is once again planning to change the gross domestic product (GDP) base year to 2017-18 from 2011-12. The government has said that change of base year to calculate GDP is done in line with the global exercise to capture economic information accurately.

The preparatory work for this huge exercise has been started and the statistics department is expected to bring this change after completion of the household consumer expenditure survey and labour force data by the end of 2018 as these are critical inputs into the base revision.

The union minister for Statistics and Programme Implementation D.V. Sadananda Gowda has said that the exercise or revision in base year is done as per the internationally accepted practice to capture the changing structure of the economy, adding that the CSO is also planning to develop a portal for collecting data with an aim to reduce the time lag in release of the monthly index from the current 42 days. Besides, he said that a factsheet on Indian economy is also in the pipeline which will facilitate decision-making at the senior levels of the government.

The CSO had last updated base year for GDP calculation to 2011-12 from January 2015, replacing the old series base year of 2004-05, while recently, it had changed the base year of IIP and WPI to 2011-12 from 2004-05.

The CNX Nifty is currently trading at 9585.85, down by 21.05 points or 0.22% after trading in a range of 9580.45 and 9627.40. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.62%, Dr. Reddys Lab up by 2.14%, Bank of Baroda up by 0.91%, Hero MotoCorp up by 0.87% and Power Grid up by 0.81%. On the flip side, Wipro down by 2.26%, Cipla down by 1.99%, Yes Bank down by 1.89%, ACC down by 1.79% and Asian Paints down by 1.75% were the top losers.

Asian markets were trading mixed; Hang Seng decreased 0.76%, Taiwan Weighted declined 0.55%, Shanghai Composite shed 0.76% and KOSPI Index was down by 0.18%. On the flip side, FTSE Bursa Malaysia KLCI increased 0.33%, Nikkei 225 gained 0.13% and Jakarta Composite was up by 0.48%.