Benchmarks make sluggish start ahead of GDP data

Pressurized by feeble global cues, Indian equity benchmarks started the F&O series expiry session on a pessimistic note and are trading with a cut of over half a percent in early deals, breaching their crucial 33,500 (Sensex) and 10,300 (Nifty) levels. Traders remained on sidelines ahead of September quarter GDP data that will be announced later in the day, though it is expected that economic growth pace is likely to pick up in the three months ending in September, halting a five-quarter slide as businesses started to overcome teething troubles after the bumpy launch of a national sales tax. Traders shrugged off Minister of State for Finance, Shiv Pratap Shukla’s statement that by March 2018, GST will become so simple that people will have no issues.

Global cues too remained somber with Asian markets trading mostly in red led by the Hong Kong market which is down by around a percent on slide in tech stocks, following the overnight slump in US tech stocks. The US markets made a mixed closing in the last session and while the Dow climbed to a new record closing high, the tech-heavy Nasdaq declined sharply, as traders cashed in on recent strength among tech stocks.

Back home, steel stocks remained buzzing with a report from Moody’s Investors Services which has said that profitability of Indian steel companies is likely to improve next year despite an increase in raw material prices. The rating agency said that among major steel-producing Asian countries, operating conditions will be most supportive in India because of robust domestic demand and protectionist measures, and despite an increase in raw material prices and new capacity. Export oriented stocks too remained in focus as the Finance Ministry has asked exporters to file GSTR 3B and table 6A of GSTR 1 on the GSTN portal and Shipping Bill(s) on the Customs EDI System, which are pre-requisites for sanction of payment.

The BSE Sensex is currently trading at 33411.75, down by 191.01 points or 0.57% after trading in a range of 33411.33 and 33576.20. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.31%, while Small cap index was down by 0.21%.

The lone gaining sectoral index on the BSE was Realty up by 0.52%, while Energy down by 0.98%, Oil & Gas down by 0.88%, PSU down by 0.73%, Bankex down by 0.71% and Power was down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 0.80%, Dr. Reddys Lab up by 0.62%, Hero MotoCorp up by 0.51% and Infosys up by 0.18%. On the flip side, Kotak Mahindra Bank down by 1.52%, Cipla down by 1.23%, Power Grid Corporation down by 1.10%, SBI down by 1.08% and Coal India down by 1.07% were the top losers.

Meanwhile, terming India’s chemical sector as the driving engine of manufacturing sector, Department of Chemicals and Petrochemicals secretary Rajeev Kapoor has said that Indian chemical sector is likely to double its size at $300 billion by 2025 from current $150-155 billion, clocking an annual growth rate of 8-10 percent. In order to meet this objective, the Centre has also announced plans to bring a new policy to promote the domestic industry and curb imports.

The secretary highlighted that the sub-sectors like speciality chemicals and agro- chemicals are growing at a higher pace. He also said the department is working on a draft chemical policy which would focus on meeting the rising demand of chemicals from domestic industry and reduce dependence on imports. But he did not give any deadline by when this draft would be unveiled.

On the challenges faced by the industry, Kapoor said that there is a lot of negativity about plastic and petro- chemicals and stressed on the need to create awareness among consumers that ‘plastic is not devil’. He asked the industry to focus on research activities to come out with new innovative products based on the feedback of user industries like automobiles. He pointed out that the use of plastics in Indian automobiles sector is lower than the global average.

Kapoor said the industry should also focus on assuring feedstock supply and even suggested that the domestic players should together place order to buy such from global markets at cheaper price. He also emphasized on the need to rework the current Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) policy to make them more effective and encourage additional investments. He added that the department has taken up the issues related with FTAs (free trade agreements) in the chemical sector with the commerce ministry.

The CNX Nifty is currently trading at 10291.00, down by 70.30 points or 0.68% after trading in a range of 10286.30 and 10332.70. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 0.91%, Indiabulls Housing up by 0.64%, Dr. Reddys Lab up by 0.60%, Hero MotoCorp up by 0.46% and Bharti Infratel up by 0.34%. On the flip side, Ultratech Cement down by 1.70%, Tech Mahindra down by 1.35%, Kotak Mahindra Bank down by 1.33%, ONGC down by 1.29% and Adani Ports down by 1.28% were the top losers.

Asian markets were trading mostly in red; Hang Seng dropped 377.92 points or 1.29% to 29,245.91, Taiwan Weighted fell 107.59 points or 1.01% to 10,605.96, KOSPI shed 17.90 points or 0.72% to 2,495.00, Jakarta Composite slipped 14.93 points or 0.25% to 6,046.44 and Shanghai Composite was down by 8.77 points or 0.26% to 3,329.09.

On the flip side, Nikkei 225 was up by 18.90 points or 0.08% to 22,616.10.