Benchmarks trade flat with positive bias

Indian equity benchmarks continued their flat trade with positive bias in morning session. Investors eagerly awaited exit polls results later today after the end of second phase of Gujarat Assembly elections. The rate hike by Federal Reserve, which was on expected lines, was largely priced in by market. Traders will be eyeing Wholesale Price Index (WPI) data to be released later in the day. The rupee opened higher against dollar even as the Federal Reserve raised interest rates by a quarter percentage point. Foreign Portfolio Investors stood net buyers in the secondary markets on Wednesday and bought shares worth Rs 860.56 crore with gross purchases and gross sales stood at Rs 6,888.76 crore and Rs 6,025.20 crore, respectively. The street remained concerned with the Reserve Bank of India (RBI) data showing that India’s current account deficit (CAD) widened to 1.2 percent of GDP or $ 7.2 billion in July-September, from 0.6 percent of GDP or $ 3.4 billion reported in the same period a year ago. Meanwhile, the trade deficit widened to $32.8 billion in the previous quarter from $25.6 billion a year ago.

Investors took note that with RBI deadline ending on December 13, to resolve the 28 large stressed accounts that the regulator had identified in its second list, banks are set to refer as many as 23 of them for insolvency proceedings. In August, the Reserve Bank had asked banks to either resolve 28 more large stressed accounts by December 13 or refer them to the National Company Law Tribunal (NCLT) by December 31. These 28 accounts together account for 40% of the system wide bad loans or worth around Rs 4 trillion. Select paper stocks remained in focus on report that paper and paperboard imports touched an all-time of 10.5 lakh tonnes in the first half of this fiscal, up 60 percent from 6.5 lakh tonnes logged in the same period last year.

Traders were seen piling up position in Oil & Gas, Energy and Telecom stocks, while selling was witnessed in Utilities, Power and IT sector stocks. In scrip specific development, Manpasand Beverages was trading firm as RBI allowed the FII to raise stake in the company. RBI has increased the FII investment limit in the company to 49 percent from earlier 24 percent. Corporation Bank was trading in red after the RBI initiated Prompt Corrective Action (PCA) against state-run lender in view of its high non-performing assets (NPAs). Ruchi Soya Industries tumbled after IDBI Bank declared the company as a wilful defaulter.

On the global front, Asian markets were trading mostly in green. China's central bank nudged up money market rates as authorities sought to defuse financial risks without imperiling the economy, a balancing act that it has managed successfully so far this year as activity remained broadly steady. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,000 and 10,150 levels respectively. The market breadth on BSE was negative in the ratio of 946:1267, while 115 scrips remained unchanged.

The BSE Sensex is currently trading at 33059.61, up by 6.57 points or 0.02% after trading in a range of 33003.53 and 33169.74. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.04%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.37%, Energy up by 0.37%, Telecom up by 0.34%, Capital Goods up by 0.21% and Healthcare up by 0.19%, while Utilities down by 0.39%, Power down by 0.34%, IT down by 0.21%, TECK down by 0.14% and Consumer Durables down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 1.82%, Mahindra & Mahindra up by 1.23%, Infosys up by 0.68%, Lupin up by 0.65% and Axis Bank up by 0.59%.

On the flip side, TCS down by 2.45%, Sun Pharma down by 0.83%, Power Grid down by 0.82%, Tata Motors - DVR down by 0.76% and Hindustan Unilever down by 0.60% were the top losers.

Meanwhile, raising concern over the fiscal condition, the Reserve Bank of India’s (RBI) latest data has showed that India’s current account deficit (CAD) doubled to 1.2 percent of gross domestic product (GDP) or $ 7.2 billion in July-September, from 0.6 percent of GDP or $ 3.4 billion reported in the same period a year ago. However, as per the RBI data,the CAD at $ 7.2 billion in Q2 of 2017-18 narrowed sharply from $ 15.0 billion or 2.5 per cent of GDP in the preceding quarter. On a cumulative basis, the CAD increased to 1.8 per cent of GDP in H1 of 2017-18 from 0.4 per cent in H1 of 2016-17.

The RBI further in its release said that the widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit brought about by a larger increase in merchandise imports relative to exports. India’s trade deficit increased to $ 74.8 billion in H1 of 2017-18 from $ 49.4 billion in H1 of 2016-17.

However, despite a wider current account deficit, India`s balance of payments posted a surplus of $ 9.5 billion in July-September compared with $ 8.5 billion a year ago, supported by a stronger capital account. The capital account surplus, which includes foreign direct investment and portfolio inflows, was at $6.9 billion in the September quarter compared with $4.3 billion a year ago.

Private transfers largely comprising remittances by Indians employed overseas, amounted to $ 17.4 billion, up 14.7% per cent from $15.2 billion a year ago. Net invisible receipts were higher in H1 of 2017-18 mainly due to increase in net services earnings and private transfer receipts, while net FDI inflows during H1 of 2017-18 moderated by 6.3 per cent over the level during the corresponding period of the previous year.

The CNX Nifty is currently trading at 10197.95, up by 5.00 points or 0.05% after trading in a range of 10181.25 and 10230.65. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.97%, Dr. Reddy’s Lab up by 1.78%, HPCL up by 1.56%, HCL Tech up by 1.29% and Mahindra & Mahindra up by 1.25%.

On the flip side, TCS down by 2.68%, Bajaj Finance down by 1.11%, GAIL India down by 1.01%, Sun Pharma down by 0.67% and Power Grid down by 0.67% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 15.67 points or 0.9% to 1,753.33, Jakarta Composite increased 16.83 points or 0.28% to 6,071.43, KOSPI Index increased 29.46 points or 1.19% to 2,510.01 and Taiwan Weighted increased 64.72 points or 0.62% to 10,535.42.

On the other hand, Nikkei 225 decreased 91.24 points or 0.4% to 22,666.83, Hang Seng decreased 53.32 points or 0.18% to 29,168.78 and Shanghai Composite decreased 8.85 points or 0.27% to 3,294.19.