Indian equities continue to trade in red in noon session

In an extremely range-bound session of trade, Indian equity benchmarks continued to trade in red in noon session on absence of positive triggers, which could take the markets higher. Sentiments remained subdued with the report that asset quality pain for banks is expected to continue in fiscal year ended March 2018 due to restructuring by banks, weakness in some large corporate accounts and events like waiver of farm loans. It expects gross non-performing assets (GNPAs) of Indian banks to increase to 9.9% to 10.2% by March 2018 from 9.5% in March 2017 with fresh slippages of loans expected at 3% to 4% in the fiscal. Adding cautiousness among investors, Union Urban Development Minister Venkaiah Naidu said loan waiver has become fashion now and should be waived in extreme situations only. However, losses remained capped with Reserve Bank Governor Urjit Patel’s statement that he is not 'overly pessimistic' about employment scenario in the IT sector, pointing out that mushrooming startups can compensate for job losses. He also highlighted that the soon-to-be implemented goods and services tax (GST) will not only create a national market but will also broaden the tax base which in turn will lower the overall taxes in the long-term.

On the global front, Asian markets are exhibiting mixed trend on Friday, with China in focus after the country's banking regulator sought more information on credit risks linked to loans to major companies that bought major assets abroad. Meanwhile, the Japanese market is little changed following the mixed cues from Wall Street and as crude oil prices advanced overnight from ten-month lows. Crude oil futures pulled further away from this week's lows, though market sentiments remained fragile amid a global crude glut that has persisted despite OPEC-led output cuts.

Back home, stocks from IT and TECK counters were supporting the markets, while those from Realty, Industrials and Basic Materials counters were adding to the underlying cautious undertone. In scrip specific development, Shriram EPC rallied after the company won multiple orders under its water management business amounting to Rs 165 crore. Furthermore, Deep Industries gained after the company bagged contract from ONGC. The contract is for securing the services of 30 Tons Workover Rig to be deployed in ONGC CBM Asset, Bokaro.

The market breadth remained pessimistic, as there were 447 shares on the gaining side against 1863 shares on the losing side, while 108 shares remained unchanged.

The BSE Sensex is currently trading at 31172.60, down by 118.14 points or 0.38% after trading in a range of 31162.20 and 31365.39. There were 10 stocks advancing against 20 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in red; the BSE Mid cap index was down by 1.51%, while Small cap index down by 1.74%.

The only gaining sectoral indices on the BSE were IT up by 0.13% and TECK up by 0.03%, while Realty down by 2.60%, Industrials down by 1.47%, PSU down by 1.46%, Basic Materials down by 1.42% and Consumer Durables down by 1.26% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.31%, Wipro up by 0.98%, NTPC up by 0.76%, Infosys up by 0.33% and Reliance Industries up by 0.31%. On the flip side, Tata Motors down by 1.88%, SBI down by 1.87%, Tata Steel down by 1.77%, ONGC down by 1.71% and Adani Ports down by 1.52% were the top losers.

Meanwhile, amidst growing concern of protectionism, industry body National Association of Software and Services Companies (NASSCOM) has projected that India's Information and Technology (IT) industry is expected to grow at the slowest pace in nearly a decade, as clients defer spending in the face of geopolitical uncertainties. Software export growth in financial year 2017-18 is projected at 7-8% in constant currency terms, down from 8.6% in the fiscal 2016-17, in line with its forecast of 8-10%. In terms of the domestic market the body has said that there will be 10-11% growth from $24 bn in FY17 to $26-26.5 bn in FY18.

Noting that digital solutions and niche segments would be the key growth drivers, the industry’s representative body said the revenue projection was based on improvements in financial services and high potential in digital business. It also said that the fiscal year will see growth driven by the modernisation of operations for client firms and the adoption of new technologies such as SaaS (Software As A Service) applications, cloud platforms, BI (Business Intelligence), cognitive and embedded analytics as enterprise customers scale digital projects.

Though, allaying fears of slowdown and job losses, NASSCOM Chairman Raman Roy said that the industry was expected to add 1.3-1.5 lakh jobs during the fiscal as it continued to be a net hirer with the demand for skilled professionals growing across its segments. In a diversion from over dependence on US market, the industry body said that they are planning outreach activities in Japan, middle East, Africa and China with focus on digital solutions. The industry association, however, admitted that it was imperative for new and existing talent to reskill to prepare for emerging job roles which required new skillsets.

The CNX Nifty is currently trading at 9581.55, down by 48.45 points or 0.50% after trading in a range of 9575.90 and 9647.65. There were 14 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 1.21%, NTPC up by 0.91%, Wipro up by 0.76%, Reliance Industries up by 0.38% and Infosys up by 0.36%. On the flip side, Indiabulls Housing down by 3.88%, IOC down by 2.99%, GAIL India down by 2.11%, Bank Of Baroda down by 2.06% and Bosch down by 1.89% were the top losers.

Asian markets were trading mixed; KOSPI Index rose 0.26%, Hang Seng advanced 0.04% and Nikkei 225 was up by 0.13%. On the flip side, Shanghai Composite decreased 0.43%, Taiwan Weighted shed 0.21% and FTSE Bursa Malaysia KLCI was down by 0.01%.