Benchmarks trades slightly lower in early deals on sluggish global cues

Indian equity benchmarks have made a cautious and are trading slightly in red in early deals on Tuesday amid sluggish global cues. Traders remained cautious with a report from domestic rating agency Care Ratings, which said that employment generation has not kept pace with GDP expansion and termed it as a ‘major concern’. However, losses remained capped on report that hoping to make compliance easier for businesses under the Goods and Services Tax regime, the government has extended the last dates of filing GSTR-2 and GSTR-3. The last date for filing of GSTR-2 for the month of July, 2017 is 31st October, 2017, while the last date for filing of GSTR-3 for the month of July, 2017 stands extended to 11th December, 2017. Investors also get some solace with few foreign investment banks, who have started revising upwards their targets for the benchmark indices on the back of bank recapitalisation programme, infrastructure push and continued inflow of domestic savings into equities and said that best is yet to come for Sensex and Nifty.

On the global front, Asian markets were exhibiting mixed trend at this point of time, with investors assessing developments on US tax reform. Japanese market was down ahead of key monetary policy decision. The US markets ended modestly lower in the last session and the tech-heavy Nasdaq after reaching a record intraday high in early trading pulled back to end the day slightly lower.

Back home, India is expecting a significant improvement in ranking in the World Bank's ease of doing business index on the back of several steps taken by the government like bankruptcy law and host of other reforms. Meanwhile, Mahindra & Mahindra’s subsidiary Mahindra Logistics (MLL), which will open its initial public offering on October 31, with a price band of Rs 425-429 per share, will be the first logistics firm to hit the market after the rollout of GST. The offer will close for subscription on November 2, 2017.

The BSE Sensex is currently trading at 33243.14, down by 23.02 points or 0.07% after trading in a range of 33199.17 and 33294.30. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.31%, while Small cap index was up by 0.51%.

The top gaining sectoral indices on the BSE were Power up by 0.69%, Consumer Durables up by 0.64%, Realty up by 0.59%, Basic Materials up by 0.30% and Utilities up by 0.26%, while Metal down by 0.47%, Telecom down by 0.44%, Oil & Gas down by 0.40%, Energy down by 0.33% and TECK was down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.99%, Power Grid Corporation up by 1.22%, Cipla up by 1.09%, HDFC up by 0.88% and Wipro up by 0.73%. On the flip side, Infosys down by 1.56%, Coal India down by 1.44%, Tata Motors down by 1.20%, Dr. Reddy’s Lab down by 1.19% and Mahindra & Mahindra down by 1.09% were the top losers.

Meanwhile, in the wake of increase in several macroeconomic indicators like trade, transport and communication, SBI Research in its latest report has accessed that Indian economy is likely to improve to 6 percent in the second quarter of the current fiscal year 2017-18, as against 5.7 percent growth in the first quarter of FY18. It also said that Q2 growth might be in the lower end of 6-6.5 percent band with an upward bias.

As per the report, index of industrial production (IIP) growth for September may be over 5 percent as mining and electricity growth is likely to be significantly better as state electricity boards had purchasing power because of festive demand. It noted that most of the lead indicators -- foreign tourist arrivals, international passenger and air freight traffic, railway traffic and telephone subscribers have shown an uptick in recent months.

SBI Research also said that consumption facing sectors are currently witnessing an increase in investment opportunities which ‘bodes well for the investment cycle going forward’. However, it observed that growth rate in agriculture sector is a point of concern. Agriculture growth may be muted as rainfall in the first three months of monsoon was hugely deficit in key foodgrain producing states like Uttar Pradesh, Punjab, Haryana, and Madhya Pradesh.

The CNX Nifty is currently trading at 10353.20, down by 10.45 points or 0.10% after trading in a range of 10341.05 and 10367.70. There were 19 stocks advancing against 30 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were Axis Bank up by 4.10%, HCL Tech up by 1.64%, Power Grid Corporation up by 1.44%, Ambuja Cement up by 1.41% and Cipla up by 1.24%. On the flip side, HPCL down by 1.98%, Bharti Infratel down by 1.93%, GAIL India down by 1.56%, Infosys down by 1.49% and Coal India down by 1.35% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI rose 1.34 points or 0.08% to 1,749.69, KOSPI Index surged 17.29 points or 0.69% to 2,519.22, Jakarta Composite increased 30.74 points or 0.51% to 6,004.82 and Taiwan Weighted was up by 45.22 points or 0.42% to 10,802.09.

On the flip side, Nikkei 225 decreased 46.3 points or 0.21% to 21,965.37, Hang Seng declined 21.92 points or 0.08% to 28,314.27 and Shanghai Composite was down by 8.56 points or 0.25% to 3,381.78.