Weak trade prevails in morning session

Indian equity benchmarks continued their weak trade in morning session on account of selling in frontline blue chip counters. Weak Asian cues too weighed on sentiment. Oil is in focus ahead of a major meeting among oil producers on November 30. The rupee was trading lower against dollar in the early trade due to fresh demand of the US currency. Foreign Portfolio Investors stood net buyers in domestic equity markets on Friday and bought shares worth Rs 1,376.76 crore with gross purchases and gross sales stood at Rs 5,676.89 crore and Rs 4,300.13 crore, respectively. Sentiments remained dampened with Standard & Poor’s decision of retaining its sovereign rating for India at ‘BBB-’ with a stable outlook, dashing hopes of another upgrade after rival Moody’s lifted its rating by a notch after a gap of nearly 14 years. S&P last raised India credit ratings to investment grade, ‘BBB-’ with a stable outlook, from ‘BB+’ in January 2007. Separately, industry body ASSOCHAM enlightened that inflation would remain a key concern for the RBI and the government, dimming hopes of a cut in interest rates. The chamber observed that as uncertainty and apprehension loom over crude oil prices and vegetables, mainly on the back of rising retail prices of onion and tomatoes, it is disrupting household budgets. It pointed out that to that extent, the macro picture may pose a challenge even as corporate India hopes for growth revival, which may now have to depend on factors other than cost of borrowing.

Meanwhile, investors took note that a senior member of the committee on bankruptcy law and one of its architects has voiced his criticism of the Ordinance that bars ousted promoters of an insolvent company from regaining control. Umarji said that the Ordinance is obsessed with large borrowers, can adversely affect the fortunes of struggling small and mid-sized companies looking for a second chance, and can make defaulting companies vulnerable to predators. Such a predator can buy some loan or debt instruments and invoke the bankruptcy code to kill competition and gain market share while the promoter remains a mute spectator. However, real estate stocks were buzzing in today’s trade on private report that the number of unsold housing units in the seven major cities stood at 6.85 lakh units at the end of September quarter, a fall of 9% from the year-ago period.

Traders were seen piling up position in Consumer Durables, Realty and Capital Goods stocks, while selling was witnessed in IT, PSU and Oil & Gas sector stocks. In scrip specific development, Bharati Defence and Infrastructure was locked at upper circuit limit on report that Mahindra Defence and Shapoorji Pallonji Group may independently bid for the company (formerly Bharati Shipyard) in the first such bankruptcy resolution attempt in the security industry. Cupid was trading in green on receiving new order from United National Population Fund (UNFPA) to supply female condoms for the first time to Malawi, Africa worth Rs 1.36 crore.

On the global front, Asian markets were trading in red. Chinese markets traded lower as investors kept an eye on developments in the bond market while South Korea’s Kospi slid on weakness in tech names. Japan’s government is set to compile an extra budget worth around 2.7-2.9 trillion yen ($24-26 billion) for the fiscal year to March 2018, with additional bond issuance of around 1 trillion yen to help fund the spending. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 33,700 and 10,400 levels respectively. The market breadth on BSE was positive in the ratio of 1405:865, while 132 scrips remained unchanged.

The BSE Sensex is currently trading at 33621.99, down by 57.25 points or 0.17% after trading in a range of 33563.33 and 33661.33. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.75%, Realty up by 0.63%, Capital Goods up by 0.55%, Consumer Disc up by 0.30% and Industrials up by 0.30%, while IT down by 0.44%, PSU down by 0.41%, Oil & Gas down by 0.36%, TECK down by 0.34% and FMCG down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.07%, ONGC up by 1.38%, NTPC up by 1.00%, Sun Pharma up by 0.74% and Larsen & Toubro up by 0.73%.

On the flip side, Adani Ports & Special Economic Zone down by 1.32%, Hindustan Unilever down by 1.15%, Tata Motors - DVR down by 1.08%, Infosys down by 1.06% and Power Grid down by 0.90% were the top losers.

Meanwhile, Finance Secretary, Ministry of Finance, Hasmukh Adhia has requested companies to pass on the benefits of GST rate cut to the consumers. He said that the companies should paste stickers of the revised rate of MRP on their products. He said that it is mandatory for the bigger companies to pass on the benefits of the reduced taxes of goods to the end consumers, adding that 'We have now reduced taxes of bigger items. If we see any anomaly we will not get hold of the small retailers, we will catch the bigger companies.'

Adhia further said that a decision regarding the formation of a National Anti profiteering Authority would be announced soon. The GST Council had brought down the tax charged on restaurant bills to a uniform 5% from 12% and 18% that was charged earlier depending upon AC or non-AC restaurants. On issue of overcharging of restaurants, Adhia said that the government has no control over the rates of small restaurants. But he stated that the government will ask big restaurants chains about their rates and if input tax credit mismatches with prices raised anti-profiteering action will be taken against them.

The Finance Secretary also opined that GST should be simple and number of slabs should be reduced. The GST Council at its 23rd meeting held on November 10, 2017 in Guwahati, had recommended the reduction of the GST rate from 28 to 18 percent on goods falling under 178 headings.

The CNX Nifty is currently trading at 10363.95, down by 25.75 points or 0.25% after trading in a range of 10348.05 and 10369.25. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 1.99%, UPL up by 1.76%, ONGC up by 1.22%, NTPC up by 1.19% and Aurobindo Pharma up by 0.54%.

On the flip side, HPCL down by 1.87%, BPCL down by 1.51%, Adani Ports & Special Economic Zone down by 1.29%, Indian Oil Corporation down by 1.28% and Hindustan Unilever down by 1.10% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 128.87 points or 0.43% to 29,737.45, Nikkei 225 decreased 117.05 points or 0.52% to 22,433.80, Taiwan Weighted decreased 98.23 points or 0.91% to 10,755.86, KOSPI Index decreased 33.52 points or 1.32% to 2,510.81, Shanghai Composite decreased 27 points or 0.81% to 3,326.82, Jakarta Composite decreased 8.67 points or 0.14% to 6,058.47 and FTSE Bursa Malaysia KLCI decreased 3.74 points or 0.22% to 1,713.49.