Benchmarks trade in red; Nifty below 10,400 mark

Indian equity benchmarks continued their weak trade in morning session on account of selling in frontline blue chip counters. The rupee opened lower against dollar on account of buying of American currency by banks and importers. Foreign Portfolio Investors stood net buyers in domestic equity markets on Monday and bought shares worth Rs 107.55 crore with gross purchases and gross sales of Rs 4,564.89 crore and Rs 4,457.34 crore, respectively, according to data available with NSDL. The sentiments were dampened on report that India’s goods and services tax (GST) collections fell to Rs 83,346 crore in October, from more than Rs 90,000 crore in each of the first three months after the new tax regime was rolled out on July 1. The Finance Ministry said that total collection stood at Rs 83,346 crore till November 27 for the month of October and 50.1 lakh returns were filed for the month. Separately, rating agency CRISIL enlightened that India’s competitiveness in the labour intensive export sectors has been on a declining path in the last decade and needs significant structural reforms that need to be addressed. The agency analyzed the competitiveness of the labour intensive export sectors namely, gems & jewellery, leather & leather products and readymade garments which showed that these are become less competitive over the last decade.

The downside was, however, capped on ICRA report that the success in divestments and encouraging GST collections will help government reduce pressure on the fiscal math. The report said successful subscription of Bharat 22 exchange traded fund launched last week has helped government move closer to its FY18 divestment target of Rs 72,500 crore and it has raised Rs 52,300 crore by the end of November. Separately, the Industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest Economic Outlook Survey has forecasted India's GDP growth to improve to 6.2 percent in Q2FY18 and rise further to 6.7 percent in Q3FY18.

Meanwhile, banking stocks were under pressure on ICRA’s report that banks credit provisions are likely to surge to Rs 2.4-2.6 trillion in fiscal 2018 compared to Rs 2 trillion last year due to provisioning for IBC accounts and ageing of NPAs. The report highlighted that the increase in provisioning will result in higher losses for state-run banks during the year. Select telecom stocks were under pressure as the Telecom Regulatory Authority of India (TRAI) will issue recommendations on net neutrality, likely setting the stage for another acrimonious war of words between providers of content, or apps, and mobile-phone operators.

Traders were seen piling up position in Basic Materials, Metal and Healthcare stocks, while selling was witnessed in Energy, PSU and Telecom sector stocks. In scrip specific development, Reliance Communication (RCom) was trading in red after China Development Bank (CDB) filed an application with National Company Law Tribunal (NCLT), to recover dues that could be worth $1.78 billion. Bharati Defence and Infrastructure was locked at upper circuit limit after NCLT granted 90-day one-time extension for corporate insolvency resolution process.

On the global front, Asian markets were trading mostly in red, as Chinese stocks stumbled for a second straight session. Investor confidence in China has been dented by rising bond yields as Beijing steps up its crackdown on shadow banking and other risky forms of financing. Higher borrowing costs threaten to squeeze corporate profits. 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 1406:861, while 107 scrips remained unchanged.

The BSE Sensex is currently trading at 33694.54, down by 29.90 points or 0.09% after trading in a range of 33639.32 and 33742.04. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37%, while Small cap index was up by 0.55%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.59%, Metal up by 0.52%, Healthcare up by 0.41%, Realty up by 0.38% and Consumer Disc up by 0.27%, while Energy down by 0.49%, PSU down by 0.46%, Telecom down by 0.45%, Oil & Gas down by 0.42% and Power down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.06%, Maruti Suzuki up by 0.91%, Tata Steel up by 0.82%, Axis Bank up by 0.76% and Lupin up by 0.75%.

On the flip side, Power Grid down by 1.55%, ONGC down by 1.34%, NTPC down by 1.07%, ICICI Bank down by 0.93% and ITC down by 0.73% were the top losers.

Meanwhile, Commerce and Industry Minister Suresh Prabhu has said that the government is in the process of setting up a new organisation to promote exports in different geographies of the world, developing global linkages. The minister also made a case for treating support measures to promote exports as investment and not subsidies, arguing that outbound shipments contribute in a big way to boosting growth.

Prabhu said that for the first time, the government is working on creating a new organisation to promote India’s exports globally. We will have offices at least in 10 different geographies, with market research back-up and promotional activity. With a completely different approach, we will work with the private sector on this, so that we can penetrate global markets effectively. He added that “We want to create support system ... by creating brand equity for India globally. Linkage with global market is necessary for promoting Indian products and we will do that”.

The minister emphasised that exports can benefit the economy in a much shorter term than any other economic activity. He further said that exports have both domestic and global benefits, adding that on the external front, the outbound shipments create an economic footprint globally, which has its own geo-political advantages.

The CNX Nifty is currently trading at 10393.80, down by 5.75 points or 0.06% after trading in a range of 10372.25 and 10401.25. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were IndusInd Bank up by 1.66%, UPL up by 1.52%, Tata Steel up by 1.30%, HDFC up by 1.20% and Zee Entertainment up by 1.16%.

On the flip side, ONGC down by 1.77%, Power Grid down by 1.50%, BPCL down by 1.21%, NTPC down by 1.21% and HPCL down by 1.05% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 323.79 points or 1.09% to 29,362.40, Taiwan Weighted decreased 52.08 points or 0.48% to 10,698.85, Jakarta Composite decreased 45.95 points or 0.76% to 6,018.63, Nikkei 225 decreased 20.99 points or 0.09% to 22,475.00, Shanghai Composite decreased 17.61 points or 0.53% to 3,304.62 and FTSE Bursa Malaysia KLCI decreased 4.65 points or 0.27% to 1,715.21.

On the other hand, KOSPI Index increased 7.49 points or 0.3% to 2,515.30.