Benchmarks erase losses to trade above neutral line

Indian equity benchmarks erased their losses and were trading in green in morning session on account of buying in frontline counters. The rupee opened lower against dollar on account of fresh demand of American currency from importers amid political upheaval in Saudi Arabia. Foreign Portfolio Investors bought shares worth Rs 738.10 crore on Tuesday with gross purchases and gross sales at Rs 5,141.15 crore and Rs 4,403.05 crore, respectively. The sentiments were upbeat as the net direct tax collections, which are made up of personal and corporate taxes, was up by 15.2 percent to Rs 4.39 lakh crore in the first seven months (April to October) of the financial year 2018. According to the Ministry of Finance, the collection up to October 2017 indicates that 44.8 percent of the annual budget target of direct taxes (Rs 9.8 lakh crore) had been achieved. Separately, Arvind Panagariya has said that observing the recent increase in India’s ease of doing business ranking by the World Bank was long overdue. He added that the country as a place for business was a lot more attractive than its ranking suggests.

Separately, the street took note 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. Select real estate sector stocks were under pressure on private report that post demonetization and structural reforms, business sentiment in the real estate sector has hit the lowest levels of optimism, especially in the northern and western markets of the country and the next 12 to 18 months are likely to be the ‘under observation’ period for the sector.

Traders were seen piling up position in Healthcare, IT and Industrials stocks, while selling was witnessed in Telecom, Energy and Oil & Gas sector stocks. Fitch report enlightened that India’s financially stressed telecom industry is likely to see mid-single-digit percentage revenue growth in 2018, helped by increased data consumption and higher blended tariffs after the slump in 2017. The telecom industry, weighed down by nearly Rs 5 lakh-crore of debt, had for the first time registered a de-growth of 2% in FY17, as it has been battling fierce price competition triggered by the entry of Reliance Jio just over a year back. In scrip specific development, Indian Overseas Bank was trading in red as the public sector bank reported widening of its net loss by nearly 60 percent at Rs 1,222.50 crore for second quarter ended September. The bank had a net loss of Rs 765.13 crore in the July- September quarter of 2016-17.

On the global front, Asian markets were trading mostly in red. China reported a trade balance surplus of $26.62 billion for October, well narrower the $39.50 billion expected, while exports rose 6.9% and imports jumped 17.2%. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,400 and 10,350 levels respectively. The market breadth on BSE was positive in the ratio of 1328:981, while 97 scrips remained unchanged.

The BSE Sensex is currently trading at 33411.11, up by 40.35 points or 0.12% after trading in a range of 33331.80 and 33484.70. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.32%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.26%, IT up by 0.79%, Industrials up by 0.37%, Capital Goods up by 0.32% and FMCG up by 0.31%, while Telecom down by 1.87%, Energy down by 0.82%, Oil & Gas down by 0.73%, Consumer Durables down by 0.67% and PSU down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Cipla up by 3.85%, Sun Pharma up by 2.27%, Asian Paints up by 2.11%, Axis Bank up by 1.74% and Lupin up by 1.62%.

On the flip side, Bharti Airtel down by 5.20%, SBI down by 0.98%, Reliance Industries down by 0.93%, ICICI Bank down by 0.61% and Tata Motors down by 0.42% were the top losers.

Meanwhile, Niti Aayog's former vice-chairman Arvind Panagariya welcoming the India's impressive 30-point jump in ease of doing business ranking said that this was overdue. He said, the government had made a large number of improvements that did not get included last year. I am delighted this has been rectified in the 2018 rankings. He further added that the country as a place for business is a lot more attractive than its ranking suggests. “I have often said that India as a place to do business is a lot more attractive than the World Bank ranking suggests. This is because the bank collects its data in Delhi and Mumbai, not in the states with the best business environment such as Andhra Pradesh and Gujarat.”

He added that the single most important factor, for this increase in ranking, has been the focused effort by the Department of Industrial Policy and Promotion (DIPP) to “cajole' the relevant entities into making improvements to the ease of doing business in areas covered by the World Bank survey. Panagariya also said he has known for some time that the processes were undergoing improvement continuously after the present government came to office. But the recognition of this fact by a major international financial institution sends a very important signal. Panagariya also pointed that there are several areas where there is considerable scope for improvement. Prominent among them being registration of properties, enforcement of contracts, starting a business, construction permits and trading across borders.

Panagaryia also brushed aside concerns about growth and said India's macros are stable. He said that today we are macro economically very stable; inflation is low, current account deficit is low, our exchange rate has been stable, foreign exchange reserves are in good shape, so macro economically we are in a very good spot, fiscal deficit is also very much under control.

The CNX Nifty is currently trading at 10358.70, up by 8.55 points or 0.08% after trading in a range of 10331.95 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%, Bharti Infratel up by 2.75%, Tech Mahindra up by 2.50%, Sun Pharma up by 2.39% and Asian Paints up by 2.33%.

On the flip side, Bharti Airtel down by 5.06%, HPCL down by 2.24%, Yes Bank down by 1.33%, BPCL down by 1.21% and Zee Entertainment down by 1.18% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 55.18 points or 0.24% to 22,882.42, Jakarta Composite decreased 23.99 points or 0.4% to 6,036.46, Taiwan Weighted decreased 22.7 points or 0.21% to 10,817.64 and FTSE Bursa Malaysia KLCI decreased 1.9 points or 0.11% to 1,749.04.

On the other hand, KOSPI Index increased 1.14 points or 0.04% to 2,546.58, Shanghai Composite increased 15.16 points or 0.44% to 3,428.74 and Hang Seng increased 94.06 points or 0.32% to 29,088.40.