Markets hover near day’s low; Sensex falls over 130 points

Key Indian benchmarks hovered near their intraday low in late morning session, with Sensex falling more than 130 points, amid weak trend in Asian markets. Heavy selling in Telecom, Power and FMCG stocks weighed on the sentiments.  Some concerns also came with the report that India’s retail inflation likely breached the central bank’s 4.0 percent medium-term target in November after unseasonably heavy rains sent food prices soaring. Besides, in line with larger peers, the broader indices too showed lackluster trade. Traders failed to get any sense of relief with UN report stating that the growth rate of India's economy is projected to accelerate from this year's 6.7 percent to 7.2 percent next year and 7.4 percent in 2019 making it again the world's fastest-growing major economy, overcoming the slowdown from demonetization.

On the global front, Asian markets were trading mostly in red, despite the positive cues overnight from Wall Street and higher crude oil prices. Investors were cautious as they look ahead to monetary policy decisions from central banks later in the week. The US Federal Reserve's monetary policy decision is scheduled for Wednesday. Back home, in scrip specific development, Alembic Pharmaceuticals was trading higher after the company received approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Darifenacin Extended-Release Tablets, 7.5 mg and 15 mg.

The BSE Sensex is currently trading at 33317.94, down by 137.85 points or 0.41% after trading in a range of 33306.72 and 33458.41. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.43%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Metal up by 0.91%, Consumer Durables up by 0.41%, Energy up by 0.21%, Basic Materials up by 0.16% and Healthcare up by 0.15%, while Telecom down by 1.31%, Power down by 0.94%, Bankex down by 0.93%, FMCG down by 0.86% and Realty down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 3.49%, ONGC up by 1.40%, Reliance Industries up by 1.02%, Lupin up by 0.69% and Adani Ports & SEZ up by 0.69%. On the flip side, ITC down by 1.81%, ICICI Bank down by 1.43%, Asian Paints down by 1.35%, TCS down by 1.31% and Bharti Airtel down by 1.05% were the top losers.

Meanwhile, describing the outlook for India as largely favourable, the United Nations in its ‘World Economic Situation Prospects’ report, has expressed hopes that the country’s Gross Domestic Product (GDP) will grow at 7.2 percent in the year 2018 and go up further to 7.4 percent in the following year. Despite the slowdown witnessed in early 2017 and the lingering impact of demonetization policy, it has projected positive outlook for India, on the back of robust private consumption, public investment as well as ongoing structural reforms.

However, the report warned that the anaemic performance of private investment remains a key macroeconomic concern for India. Besides, it showed that growth in gross fixed capital formation, which is a proxy for investment demand in the economy, has dropped to 30 percent in 2017, from 40 percent in 2010, amid subdued credit growth, low capacity utilisation in some industrial sectors and balance sheet problems in the banking and corporate sectors. It also explained that in this environment, vigorous public investment in infrastructure has been critical in propping up overall investment growth.

As per the report, there was some degree of uncertainty over the monetary policy stance in India. It noted that subdued inflation, together with a good monsoon season, offers scope for additional monetary easing. It also said that the country’s fiscal deficit has declined visibly, and it is expected to narrow further to 3.2 percent of GDP in 2018. It added that an upturn in the global economy now growing by about 3 percent paves the way to reorient policy towards longer-term issues such as addressing climate change, tackling existing inequalities and removing institutional obstacles to development.

The CNX Nifty is currently trading at 10274.40, down by 47.85 points or 0.46% after trading in a range of 10264.40 and 10326.10. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 3.44%, GAIL India up by 2.41%, Vedanta up by 2.28%, ONGC up by 1.37% and Hindalco up by 1.34%. On the flip side, HPCL down by 3.18%, Indian Oil Corporation down by 2.30%, BPCL down by 2.27%, Bharti Infratel down by 2.23% and Eicher Motors down by 1.99% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 91.5 points or 0.32% to 28,873.79, Nikkei 225 decreased 66.62 points or 0.29% to 22,872.11, Taiwan Weighted decreased 29.81 points or 0.28% to 10,443.28, Shanghai Composite decreased 22.32 points or 0.67% to 3,299.88 and KOSPI Index decreased 11.97 points or 0.48% to 2,459.52.

On the flip side, Jakarta Composite increased 0.83 points or 0.01% to 6,027.46 and FTSE Bursa Malaysia KLCI increased 1.58 points or 0.09% to 1,721.05.