Benchmarks trade in green in morning session

Indian equity benchmarks continued their trade in green in morning session, shrugging off North Korea’s latest missile launch and tracking positive Wall Street close. 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 Tuesday and bought shares worth Rs 3,003.88 crore with gross purchases and gross sales of Rs 7,524.88 crore and Rs 4,518 crore, respectively. Traders were taking some encouragement with Prime Minister Narendra Modi’s statement who called upon entrepreneurs from across the globe to make India their base for the world. He said that India has emerged as one of the fastest-growing economies and a happening place with immense opportunities in a number of areas. Separately, as per a report, impatient for faster economic growth, India’s government is lobbying for a reduction in official interest rates in coming months as it expects inflation to stay close to a 4 percent target. Additionally, a private poll enlightened that Indian economic growth likely rebounded in the July-September quarter from the slowest growth in three years, with demand picking up modestly as the effects from a shock ban on high-value currency notes eased.

The upside was, however, capped with a private report stating that both Goods and Services Tax (GST) collections as well as its compliance in the first four months since the rollout of the new tax regime remain well be below the target, and the situation is unlikely to improve in the near- term. Separately, a foreign brokerage firm lowered India’s GDP growth forecast for current fiscal to 6.6 percent from the previous 6.8 percent, citing that businesses were still adjusting to the new GST regime and there was limited room for fiscal support. Inflation is expected to edge up on higher commodity prices and stronger demand momentum, whilst the current account and fiscal deficits run the risk of re-widening.

Traders were seen piling up position in Realty, Capital Goods and Consumer Durables stocks, while selling was witnessed in Bankex sector stocks. In scrip specific development, South Indian Bank was trading in green after the bank raised Tier 2 capital aggregating Rs 490 crore by allotting 49,000 non-convertible, redeemable, unsecured, Basel III compliant bonds at 9.50 per cent per annum interest payable half yearly for a period of 126 months. Mixed reactions were displayed in shares of tea companies on the back of an increase in tea prices because of production shortages in Assam and West Bengal, the largest tea-producing states.

On the global front, Asian markets were trading mostly in red. China’s economy is still facing relatively large downward risks that may become apparent by early 2018. The head of the China Banking Regulatory Commission’s regulatory board said that the country’s economic stimulus measures have been overly strong, resulting in asset bubbles. Annual Japanese retail sales fell for the first time in a year last month, government data showed, as poor weather including two typhoons kept consumers away from stores and restaurants. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,600 and 10,350 levels respectively. The market breadth on BSE was positive in the ratio of 1391:894, while 121 scrips remained unchanged.

The BSE Sensex is currently trading at 33655.69, up by 37.10 points or 0.11% after trading in a range of 33612.34 and 33690.92. There were 24 stocks advancing against 7 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 0.60%.

The top gaining sectoral indices on the BSE were Realty up by 1.70%, Capital Goods up by 0.62%, Consumer Durables up by 0.62%, Industrials up by 0.59% and Healthcare up by 0.58%, while Bankex down by 0.13% was the sole losing index on BSE.

The top gainers on the Sensex were Coal India up by 1.67%, Dr. Reddy’s Lab up by 1.05%, Hindustan Unilever up by 0.72%, Tata Motors up by 0.69% and Tata Motors - DVR up by 0.68%.

On the flip side, Axis Bank down by 1.23%, HDFC down by 1.13%, Mahindra & Mahindra down by 0.29%, Asian Paints down by 0.28% and Maruti Suzuki down by 0.17% were the top losers.

Meanwhile, Telecom Regulatory Authority of India (Trai) has upheld net neutrality in its recommendations in a consultaion paper for over-the-top service. The guidelines issued by India’s telecom regulator state that no internet access service provider shall resort to any form of discrimination, restriction or interference in the treatment of content, including practices like blocking, degrading, slowing down or granting preferential speeds.

Trai Chairman R S Sharma called for Internet, an important platform for India, being kept open and free, and not cannibalised. 'No one owns Internet... so, it should be open and accessible to everyone,' Sharma said, suggesting that service providers should not indulge in gate-keeping of this important platform. Sharma said Internet is an important platform for the country, especially in the context of innovation, startups, online transactions, various government applications, and the Digital India programme. 'So, it is important that the platform is kept open and free and not cannibalized.

After considering the views expressed by stakeholders, review of the relevant literature and international experience, the Authority recommended that the principle of non-discriminatory treatment by TSPs should not be interpreted or applied in a manner that could deter future innovations or the development of new categories of services. Trai recommended that CDNs should not be included within the scope of any restrictions on nondiscriminatory treatment, which are designed specifically to cover the providers of Internet Access Services.

In its other recommendations, it said that discriminatory treatment of content is prohibited. Internet of Things (IoT), as a class of services, is not excluded from the scope of the restriction on non-discriminatory treatment. Trai has also recommended a watchdog along the lines of BARC India for enforcing Net Neutrality. Though, International treaties, court orders, government order on blocking certain sites is exempt from these guidelines. In 2016, Department of Telecommunications had sought TRAI's recommendations on net neutrality.

The CNX Nifty is currently trading at 10378.60, up by 8.35 points or 0.08% after trading in a range of 10364.10 and 10391.90. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Bosch up by 2.20%, Coal India up by 1.75%, GAIL India up by 1.15%, Aurobindo Pharma up by 1.10% and ONGC up by 0.83%.

On the flip side, Axis Bank down by 1.40%, HDFC down by 1.11%, UPL down by 0.88%, Tech Mahindra down by 0.85% and Yes Bank down by 0.60% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 106.03 points or 0.36% to 29,574.82, Jakarta Composite decreased 22.24 points or 0.37% to 6,048.47, Shanghai Composite decreased 16.19 points or 0.49% to 3,317.47, Taiwan Weighted decreased 5.24 points or 0.05% to 10,701.83 and KOSPI Index decreased 0.84 points or 0.03% to 2,513.35.

On the other hand, FTSE Bursa Malaysia KLCI increased 2.94 points or 0.17% to 1,717.36 and Nikkei 225 increased 76.57 points or 0.34% to 22,562.81.