Markets remain in grip of bears; Nifty falls below 10,100 mark

Key Indian benchmarks remained in grip of bears in late morning session, with Nifty falling below 10,100 mark, amid weak Asian cues and heavy selling appeared in Metal, Basic Materials and PSU stocks. Besides, investors remained on sidelines ahead of the Reserve Bank of India's monetary policy outcome due later in the day during market hours. Sentiments were also pessimistic with the National Council of Applied Economic Research’s (NCAER) latest report stating that India Inc’s confidence dived due to goods and services tax (GST) trouble in the second quarter (July-September) of the current financial year. Its Business Confidence Index (BCI) fell 12.9 per cent from the earlier quarter. Adding to the concerns, India's total public debt (excluding liabilities under the public account) increased to Rs 65.65 lakh crore in the July-September quarter (Q2FY18), up by 2.53 percent over the previous quarter. Traders paid no heed towards the mid-term review of the FTP which has brought in additional relief for the labour-intensive and micro, small and medium enterprises (MSME) sectors. The government has increased the incentives under the Merchandise Exports from India Scheme (MEIS) increased by 2 percent to 4 percent, while under the Services Export from India Scheme (SEIS), incentives have been increased by 2 percent.
 
On the global front, Asian markets were trading in mostly in red, tracking the weak cues overnight from Wall Street amid concerns about the outlook for the Republican tax reform bill. Mining stocks fell following the plunge in copper prices, while crude oil prices also declined in Asian trades. Back home, in scrip specific development, Reliance Infrastructure (RInfra) moved up after the company won two prestigious EPC contracts in Bangladesh together valued at Rs 5,000 crore.

The BSE Sensex is currently trading at 32735.90, down by 66.54 points or 0.20% after trading in a range of 32693.20 and 32804.75. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.06%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Energy up by 0.60%, Realty up by 0.37%, IT up by 0.34%, Consumer Durables up by 0.32% and TECK up by 0.24%, while Metal down by 1.73%, Basic Materials down by 0.63%, PSU down by 0.41%, Bankex down by 0.39% and Auto down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.37%, Infosys up by 0.52%, Cipla up by 0.39%, Kotak Mahindra Bank up by 0.33% and Coal India up by 0.30%. On the flip side, Tata Steel down by 1.90%, SBI down by 1.32%, Bajaj Auto down by 0.93%, ITC down by 0.85% and ICICI Bank down by 0.79% were the top losers.

Meanwhile, India's total public debt (excluding liabilities under the public account) increased to Rs 65.65 lakh crore in the July-September quarter (Q2FY18), up by 2.53 percent over the previous quarter. The debt of the government was Rs 64.03 lakh crore as of June–end 2017. Internal debt constituted 93 percent of public debt as of September 2017, while marketable securities accounted for 82.6 percent. According to the report on debt management released by the finance ministry, about 27.8 percent of outstanding stock has a residual maturity of up to five years at end September 2017, which implies that over the next five years, on an average, around 5.56 percent of outstanding stock needs to be repaid every year. Therefore, it noted that rollover risk in the debt portfolio continues to be low.

The report indicated that during the second quarter, the government issued dated securities worth Rs 1.89 lakh crore, higher than Rs 1.68 lakh crore in the first quarter, taking gross borrowings during the first half of 2017-18 to Rs 3.57 lakh crore, or 61.68 per cent of Budget Estimate (BE), vis-a-vis 56.8 percent of BE in the first half of 2016-17. Adding further, it pointed out that the liquidity in the economy during the quarter remained in surplus mode, due to demonetization move. However, it observed that the cash position of the government was somewhat stressed during Q2 of FY18 and the Centre was required to resort to Ways and Means Advances (WMA) from the Reserve Bank of India on a few occasions.

As per the report, through cash management guidelines, attempt was made to time expenditure as per receipt trends. It also said that based on the assessment of prevailing and evolving liquidity conditions, RBI conducted sale of government securities under open market operations for an aggregate amount of Rs 600 billion, during the quarter. Besides, it stated that G-Sec yields showed a falling trend till August 3, 2017 but an increasing trend was seen thereafter. It added that the trading volume of government securities on an outright basis during the second quarter of the current fiscal surged by 10.20 percent over the previous quarter.

The CNX Nifty is currently trading at 10086.05, down by 32.20 points or 0.32% after trading in a range of 10074.45 and 10104.20. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 1.15%, Tech Mahindra up by 1.01%, Infosys up by 0.54%, Cipla up by 0.53% and HCL Tech up by 0.48%. On the flip side, Hindalco down by 2.83%, Vedanta down by 2.55%, Tata Steel down by 1.84%, SBI down by 1.21% and Bajaj Auto down by 1.18% were the top losers.

Asian markets were trading in mostly in red; Hang Seng decreased 495.86 points or 1.72% to 28,346.94, Nikkei 225 decreased 419.43 points or 1.85% to 22,202.95, Taiwan Weighted decreased 172.93 points or 1.64% to 10,393.92, KOSPI Index decreased 28.63 points or 1.14% to 2,481.49, Shanghai Composite decreased 27.63 points or 0.84% to 3,276.04 and FTSE Bursa Malaysia KLCI decreased 5.03 points or 0.29% to 1,719.81.

On the flip side, Jakarta Composite increased 39.6 points or 0.66% to 6,040.07.