Markets trade in tight band with negative bias

Indian equity benchmarks traded in a tight band with a negative bias in early noon session amid a lackluster overseas trend. Stocks of FMCG, IT and Consumer Durables remained subdued and rising tensions in the Korean peninsula were also adding some pressure on the markets. Some concerns also came with the report that India slipped by one spot to become the fourth-largest foreign investor into the UK. India set up 127 new projects in Britain last year and safeguarded 7,645 existing jobs as a result and created 3,999 new jobs in 2016-17. The markets paid no heed towards Prime Minister Narendra Modi’s statement that that GST is by far the biggest business and economic reform of India and that the country is moving towards the modern tax regime, which is transparent, stable and predictable. Furthermore, shares of telecom companies gained after reports suggesting that the government is considering extending the tenure for payment of fee for auctioned airwaves and lowering the universal services obligation (USO) levy among other measures to alleviate the financial stress in the debt-laden sector.

On the global front, Asian markets were trading in red as investors fretted over the European Central Bank plan to unwind stimulus programs and a disappointing U.S. jobs report. Back home, in scrip specific development, Lupin traded higher after the company launched its Moxifloxacin Hydrochloride Ophthalmic solution USP, 0.5% (base) having received an approval from the United States Food and Drug Administration (USFDA) earlier.

The BSE Sensex is currently trading at 31307.85, down by 61.49 points or 0.20% after trading in a range of 31286.62 and 31394.16. There were 14 stocks advancing against 16 stocks declining on the index, while 1 stock remained unchanged.

The top gaining sectoral indices on the BSE were Healthcare up by 1.37%, Realty up by 1.12%, Capital Goods up by 0.35%, Industrials up by 0.19% and Basic Materials up by 0.19%, while Consumer Durables down by 0.31%, FMCG down by 0.29%, IT down by 0.28%, Bankex down by 0.26% and Auto down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 4.19%, Dr. Reddy’s Lab up by 1.89%, Mahindra & Mahindra up by 1.34%, Hindustan Unilever up by 1.30% and Cipla up by 1.21%. On the flip side, HDFC down by 1.21%, Bajaj Auto down by 1.05%, ICICI Bank down by 0.89%, Asian Paints down by 0.87% and Hero MotoCorp down by 0.84% were the top losers.

Meanwhile, Union Labour and Employment Minister Bandaru Dattatreya has said that the retirement fund body Employees Provident Fund Organisation’s (EPFO) investment in stocks via exchange traded funds (ETFs) is expected to cross the Rs 45,000 crore mark by the end of fiscal year 2017-18.

The minister has stated that the trustees of EPFO have raised ETF investment limit to 15% of investible deposits in 2017-18, from the current 10%. With this, he observed that the total investment may go up to Rs 45,000 crore. He noted that the rate of return last year was 13.3 per cent from ETFs. Adding further, he said “the markets are good and let's see the situation, but it is an encouraging one.”

Further, Dattatreya has said that his ministry is in the process of consolidating 44 laws into four codes covering industrial relations, wages, social security and safety issues, in order to simplify them. Besides, he also said that the government is planning to create 65 million jobs in the auto sector alone by 2026. Meanwhile, as of April 21 this year, an investment stood at Rs 21,559 crore. The EPFO invested Rs 6,577 crore in 2015-16 and Rs 14,982 crore in 2016-17.

The CNX Nifty is currently trading at 9650.95, down by 23.60 points or 0.24% after trading in a range of 9642.65 and 9672.70. There were 19 stocks advancing against 31 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Lupin up by 4.14%, Dr. Reddy’s Lab up by 1.98%, Aurobindo Pharma up by 1.35%, Cipla up by 1.32% and Hindustan Unilever up by 1.31%. On the flip side, Bharti Infratel down by 1.66%, HDFC down by 1.57%, Asian Paints down by 1.14%, Bajaj Auto down by 1.02% and ICICI Bank down by 0.99% were the top losers.

All the Asian markets were trading in red; Hang Seng decreased 90.21 points or 0.35% to 25,375.01, Nikkei 225 decreased 76.11 points or 0.38% to 19,917.95, Taiwan Weighted decreased 56.98 points or 0.55% to 10,311.22, KOSPI Index decreased 12.85 points or 0.54% to 2,374.96, FTSE Bursa Malaysia KLCI decreased 8.97 points or 0.51% to 1,761.56, Shanghai Composite decreased 4.95 points or 0.15% to 3,207.50 and Jakarta Composite decreased 0.33 points or 0.01% to 5,849.25.