Benchmarks trade cautiously in early deals

Indian equity benchmarks have made a cautious start and are trading tad below their neutral lines amid weak global cues. Traders overlooked report that net direct tax collections rose by 15.2 per cent to Rs 4.39 lakh crore between April and October this fiscal. This amounts to 44.8 per cent of the total Budget estimate of direct taxes of Rs 9.8 lakh crore for 2017-18. Arvind Panagariya’s statement that the country as a place for business is a lot more attractive than its ranking suggests, too failed to boost investors’ confidence. However, losses remained capped, as traders took some solace with report that private equity (PE) and venture capital (VC) investments in India touched a new high of $21.8 billion in 2017 till date (January-October), surpassing the previous record of $19.6 billion in 2015.

Global cues remained sluggish with most of the Asian counters trading in red at this point of time amid concern about the progress of U.S. tax reforms, after a report that Senate Republican leaders are considering a delay in the implementation of a corporate-tax cut. The US markets made a mixed closing in the last session after a lackluster day of trade.

Back home, telecom stocks edged lower, despite the Department of Telecommunications (DoT) planning to finalise the new telecom policy by February 2018. Talking about BharatNet, the flagship project of the government to provide broadband services in rural and remote areas, the government said telecom service providers (TSP) have come forward for utilising the BharatNet connectivity.

The BSE Sensex is currently trading at 33361.29, down by 9.47 points or 0.03% after trading in a range of 33356.33 and 33484.70. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.20%, while Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.16%, IT up by 0.51%, FMCG up by 0.26%, Auto up by 0.22% and Utilities was up by 0.19%, while Telecom down by 1.75%, Oil & Gas down by 0.93%, Energy down by 0.91%, PSU down by 0.51% and Metal was down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 3.85%, Axis Bank up by 2.35%, Sun Pharma up by 2.08%, Lupin up by 1.39% and Bajaj Auto up by 1.39%. On the flip side, Bharti Airtel down by 4.93%, Reliance Industries down by 1.06%, SBI down by 0.85%, ONGC down by 0.70% and ICICI Bank down by 0.64% were the top losers.

Meanwhile, highlighting the ongoing economic reforms and improvements in the business environment to continue to support India’s economic growth, the Fitch group company, BMI Research in its latest report has said that India will remain one of the fastest growing emerging markets, with real Gross Domestic Product (GDP) growth set to average 6.5 percent over the next five fiscal years. As per the report, insolvency regulation is a positive step in cleaning up the financial system in the country and tax reforms will help strengthen India's fiscal revenues. But it also said that significant bureaucratic inefficiencies are likely to cap the country's growth potential further.

According to the report, India's improvement in the ease of doing business ranking masks the fact that bureaucratic inefficiencies remain rife, as indicated by the stalling of the 2015 Land Acquisition Bill in Parliament and a massive backlog of unresolved cases in courts. BMI Research said that these issues are likely to continue to cap India's growth potential below the 7 percent level over the coming years, and the country is likely to continue facing challenges in completing large-scale infrastructure projects and establishing a strong manufacturing base.

The report further stated that there has been a surge in foreign investment, which is likely to continue at a steady pace as global firms look to tap into India's vast market potential and that pro-business and pro-investor policies are likely to encourage investment. It said a more favourable business environment is likely to encourage a pick-up in private investment growth, which has been lacklustre due to poor business environment, as well as heavily leveraged businesses that were unable and unwilling to increase capital investments, particularly large industrial corporates such as steel and coal, which were hit hard by weaker commodity prices.

The CNX Nifty is currently trading at 10348.00, down by 2.15 points or 0.02% after trading in a range of 10344.85 and 10384.25. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Cipla up by 4.04%, Tech Mahindra up by 2.72%, Axis Bank up by 2.37%, Sun Pharma up by 2.06% and Bharti Infratel up by 1.98%. On the flip side, Bharti Airtel down by 4.77%, HPCL down by 1.96%, Indian Oil Corporation down by 1.50%, Yes Bank down by 1.38% and BPCL down by 1.33% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 60.37 points or 0.26% to 22,877.23, Taiwan Weighted slipped 28.2 points or 0.26% to 10,812.14, Jakarta Composite shed 18.43 points or 0.3% to 6,042.02 and FTSE Bursa Malaysia KLCI was down by 1.54 points or 0.09% to 1,749.40.

On the flip side, KOSPI Index rose 1.71 points or 0.07% to 2,547.15, Shanghai Composite increased 18.4 points or 0.54% to 3,431.98 and Hang Seng was up by 85.58 points or 0.3% to 29,079.92.