Benchmarks end mixed on last hour selloff

Selling in last hour of trade forced markets to end mixed on Wednesday, as traders remained on sidelines ahead of Wholesale Price Index (WPI) data slated to be released tomorrow. Though, markets traded in fine fettle for most part of the day’s trade with traders getting support from report that Index of Industrial Production (IIP) or factory output for the month of July 2017 stood at 1.2% compared to negative 0.1% in June 2017 and 5.2% in the similar month of the previous year. Markets extended gains to hit intraday high in noon deals with Sensex extending its gains to surpass its crucial 32,300 level with investors taking note of the joint report by ASSOCHAM-EY, which highlighted that if India has to maintain a sustained gross domestic product (GDP) growth of 9-10 per cent per annum, it is crucial that the manufacturing sector grows steadily at 14-15 per cent per annum over the next three decades.

However, markets took U-turn from that levels and ended mixed, as traders opted to book profit at higher levels amid report that India Inc’s foreign direct investment (FDI) dropped 14.82 per cent to $1339.26 million during August 2017 from $1572.23 million in the same month of last year. Investors also maintained a cautious approach with the report that the Consumer Price Index (CPI)-based inflation surged to five-month high in August, mainly due to an increase in foods prices and higher services costs, indicating Goods and Services Tax’s (GST’s) inflationary impact. Separately, a private report based on the latest annual earnings, showed that India’s corporate debt rose to a seven-year high at the end of March. More than a fifth of large companies did not earn enough to pay interest on their loans and the pace of new loans fell to the lowest in more than six decades.

On the global front, European counters were trading mostly in green. The jobless rate in the UK unexpectedly fell in July, while wage inflation registered a weaker-than-expected increase. The Office for National Statistics said that the rate of unemployment unexpectedly dropped to 4.3% in July, from the previous month’s reading of 4.4%. Asian markets closed mostly in red. Japanese wholesale prices rose at the fastest annual pace in nearly nine years in August as robust Chinese demand boosted commodity prices.

Back home, public sector banks edged higher on reports that the government is exploring the sale of capitalization bonds to meet the burgeoning capital requirements of state-run lenders, mostly the weaker ones that are finding it difficult to raise resources from the market. Telecom stocks displayed mixed reactions on report that the Telecom Commission (TC) has asked the inter-ministerial panel looking into the health of the telecom sector to consider ways for giving greater and immediate relief to telcos, which are facing high debt levels and falling revenues.

However, oil marketing companies like Indian Oil Corporation, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) slumped on report that the government is unlikely to pass on further rise in fuel prices to the consumers due to higher inflation. The report also highlighted that Finance Ministry is unlikely to roll back fuel excise tax hike due to fiscal constraints.

Finally, the BSE Sensex gained 27.75 points or 0.09% to 32,186.41, however the CNX Nifty was down by 13.75 points or 0.14% to 10,079.30.

The BSE Sensex touched a high and a low of 32,348.30 and 32,126.77, respectively and there were 12 stocks on gaining side as against 19 stocks on losing side on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.69%, while Small cap index was down by 0.59%.

The few gaining sectoral indices on the BSE were Healthcare up by 1.15%, Energy up by 0.24% and Bankex was up by 0.17%, while Oil & Gas down by 1.70%, PSU down by 1.28%, Metal down by 1.12%, Realty down by 1.06% and FMCG was down by 1.03% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.02%, Reliance Industries up by 3.13%, Dr. Reddys Lab up by 2.09%, Lupin up by 1.10% and Tata Motors was up by 0.67%. On the flip side, ITC down by 2.18%, HDFC down by 1.12%, Bharti Airtel down by 0.96%, Cipla down by 0.91% and Wipro down was by 0.74% were the top losers.

Meanwhile, Minister of State for Commerce and Industry CR Chaudhary has said that the government has extended tax benefits to around 67 innovative startups so far with a view to promoting budding entrepreneurs and supporting struggling startups in India. He noted that 3,576 startups have been recognised as on September 7. He also emphasized on the need to ensure that the benefits of Startup India programme should percolate down to entrepreneurs in tier-2/tier-3 cities.   

As part of the Startup India Initiative, Chaudhary said that Prime Minister Narendra Modi had unveiled a slew of incentives to boost start-up enterprises like offering a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000-crore corpus to fund them. The minister also assured full support and facilitation from both the centre and state governments. The minister asked young entrepreneurs to work in areas like agriculture, health, biotechnology and animal husbandry.

Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek has said that 15 states have brought out their startup policies and through that they are facilitating the young businesses. He also said that startups need support in funding, marketing and infrastructure. He informed that Rs 1,587 crore funds were given to startups so far besides intellectual property related benefits were extended to 639.

The CNX Nifty traded in a range of 10,131.95 and 10,063.15. There were 19 stocks in green as against 32 stocks in red on the index.

The top gainers on Nifty were Sun Pharma up by 5.40%, Tata Power up by 5.00%, Reliance Industries up by 3.60%, Dr. Reddys Lab up by 2.69% and Bank of Baroda up by 1.48%. On the flip side, BPCL down by 6.45%, Indian Oil Corporation down by 4.81%, ITC down by 2.18%, Indiabulls Housing down by 1.96% and Eicher Motors down by 1.46% were the top losers.

European markets were trading mostly in green; France’s CAC rose 4.2 points or 0.08% to 5,213.21, Germany’s DAX was up by 10.38 points or 0.08% to 12,535.15, while UK’s FTSE 100 was down by 12.87 points or 0.17% to 7,387.82.

Asian equity markets ended mostly lower on Wednesday, despite US stocks hitting record highs overnight on expectations that a tax reform plan will get passed this year. Japanese shares ended higher as the dollar extended its sharp rally against the yen on easing concerns over North Korea and US hurricanes. Chinese shares posted modest gains to finish near 20-month highs after a survey showed investors were optimistic about economic conditions in August.