Benchmarks make cautious start ahead of Fed meet

Indian equity benchmarks have made a cautious start and are trading slightly in red in early deals, as traders opted to book profit ahead of the U.S. Federal Reserve and Bank of Japan’s meetings later this week. Traders also remained on sidelines ahead of meeting of Prime Minister Narendra Modi with Finance Minister Arun Jaitley and other top officials to take stock of the situation and the discussion for remedial measures to bolster growth. PM will analyse the economic situation with Jaitley and secretaries of the finance ministry and explore options to stimulate the economy. Some concern also crept in the market on report that the Centre could be forced to cut infrastructure spending, as GST glitches have hit revenue. Lower-than-expected tax collections and sluggish growth have upset the government`s budget calculations.

On the global front, Asian markets were trading mostly in red at this point of time, as traders looking ahead to the U.S. Federal Reserve and Bank of Japan's meetings later this week for clues on the direction of monetary policy. The US markets extended their rally mood and major bourses surged to fresh record highs, amid hopes the worst of the North Korea crisis is over.

Back home, broader markets however outperforming benchmarks in early deals. Oil sector stocks remained buzzing as the Oil Minister Dharmendra Pradhan has said that he has requested the Ministry of Finance to bring petroleum products under the ambit of Goods and Services Tax (GST) in the interest of consumers. Meanwhile, the market breadth indicating the overall health of the market was strong, with 1064 shares gaining and 866 shares declining, while a total of 86 shares were unchanged.

The BSE Sensex is currently trading at 32410.44, down by 13.32 points or 0.04% after trading in a range of 32396.79 and 32524.11. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Auto up by 0.58%, Healthcare up by 0.45%, Industrials up by 0.38%, IT up by 0.25% and Utilities was up by 0.24%, while Energy down by 0.53%, Capital Goods down by 0.40%, Power down by 0.38%, PSU down by 0.32% and Metal down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 4.17%, Tata Motors - DVR up by 1.74%, Sun Pharma up by 0.84%, Wipro up by 0.69% and Lupin up by 0.55%. On the flip side, Coal India down by 1.49%, ONGC down by 0.82%, Larsen & Toubro down by 0.76%, Power Grid down by 0.65% and Reliance Industries down by 0.64% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has expressed hope that with government initiatives and technology advancement, the digital payment will pick up momentum again and said that compulsion of going digital post note ban has become a habit of people. He also said that high denomination currency circulation has come down in terms of volume after demonetisation of Rs 500 and Rs 1,000 notes that came into effect from November 9, 2016.

Jaitley noted that in the month of November 2016, December 2016 and January 2017, a lot of people went in for digitisation in terms of mode of payment more out of compulsion rather than finding it a more convenient method to transact, but that compulsion created a habit for many. He has said that after the demonetization, digital payments have reached a peak figure and then it marginally slipped, and is now bound to pick up again. He also said that in addition to Unified Payments Interface (UPI) and other measures, there will be a major advancement in the shift to a cashless economy, and will also reflect upon the spending habit of people.

On the benefits of demonetisation, the Minister said that the high denomination currency in circulation has come down. He said ‘High denomination currency has squeezed. The squeeze process is going to happen in the natural course of the economy. Second important test is as a consequence of this how much we are able to expand the number of assessees and the tax base, both direct and indirect.’

The CNX Nifty is currently trading at 10145.65, down by 7.45 points or 0.07% after trading in a range of 10141.70 and 10178.95. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 4.10%, GAIL India up by 3.45%, Tata Motors - DVR up by 1.46%, Sun Pharma up by 0.98% and Aurobindo Pharma up by 0.75%. On the flip side, Coal India down by 1.51%, Bank of Baroda down by 0.93%, Larsen & Toubro down by 0.87%, Power Grid Corporation down by 0.77% and Tata Power down by 0.72% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 26.57 points or 0.25% to 10,605.00, Hang Seng slipped 17.21 points or 0.06% to 28,142.56, Shanghai Composite shed 9.82 points or 0.29% to 3,353.04, Jakarta Composite dipped 5.8 points or 0.1% to 5,878.81, KOSPI Index dropped 2.3 points or 0.1% to 2,415.91 and FTSE Bursa Malaysia KLCI was down by 1.9 points or 0.11% to 1,781.76.

On the flip side, Nikkei 225 was up by 299.54 points or 1.5% to 20,209.04.