Key indices continue to trade with small gains

Key benchmark indices continued to trade with small gains in early afternoon trade, amid sluggish trade in Asian stocks. Sentiments on the street remained positive with Commerce & Industry Minister Suresh Prabhu’s statement that the government is working on a strategy to boost share of services in total exports from the country. The gains at Dalal Street were mainly led by buying in Realty, Industrials and Capital Goods sector stocks.  However, gains were limited as anxiety spread among the traders after the statistics from FICCI’s quarterly survey on manufacturing suggests slightly less optimistic outlook for the manufacturing sector in the Q3 (October- December 2017-18) as the percentage of respondents reporting higher production in third quarter has fallen in comparison to the previous quarter. The broader indices were trading in green with mid cap and small cap indices were trading in the range of 0.45%-1.01%. In scrip specific development, Indian Bank moved up by half a percent after receiving an approval to raise up to Rs 7,000 crore through various means, including a follow on public offer (FPO), in the current fiscal and the following years.

On the global front, Asian markets were trading mostly in red, taking their cues from Wall Street with investor enthusiasm toward US tax changes ebbing as the long-awaited reform bill wound its way through Congress. Back home, the BSE Sensex is currently trading at 33873.48, up by 36.74 points or 0.11% after trading in a range of 33767.72 and 33956.31. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.48%, while Small cap index was up by 1.01%.

The top gaining sectoral indices on the BSE were Realty up by 2.01%, Industrials up by 0.93%, Capital Goods up by 0.88%, Consumer Disc up by 0.63% and Auto up by 0.62%, while Bankex down by 0.05%, Energy down by 0.03%, Power down by 0.03% and PSU down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.10%, Tata Motors - DVR up by 1.94%, ONGC up by 1.92%, Tata Motors up by 1.57% and Larsen & Toubro up by 1.41%. On the flip side, Dr. Reddy’s Lab down by 1.54%, Adani Ports & SEZ down by 1.06%, Tata Steel down by 1.01%, Power Grid down by 0.86% and Kotak Mahindra Bank down by 0.71% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that the operating profits of cement companies in India, which use a high proportion of pet coke, may fall by around one percent, following the government’s decision to hike the import duty on petcoke from the current 2.5 percent to 10 percent. Besides, it pointed out that the increase in import duty will also result in a rise in power and fuel cost per metric tonne to Rs 5-7 per bag.

The rating agency has noted that the hike in import duty was announced after the Supreme Court decided to lift the ban on usage of pet coke on December 13, 2017, giving some relief to the cement companies. It also noted that the Supreme Court allowed the cement industry to use petroleum coke as a feedstock which had been banned last month in a bid to clean up the air pollution. Adding further, it said that while issuing the exemption order for cement and limestone industries, the apex court asked the government to frame guidelines for the use of petcoke.

Ind-Ra further said that the cement manufacturers may resort to coal imports due to low domestic availability. It noted that cement manufacturers prefer using pet coke, as it contains high calorific value (7,500-8,500Kcal/kg), to non-coking coal (2,200-7,000Kcal/kg). Total pet coke consumption in India rose by 34 percent in October 2017 to 2 million metric tonnes as compared with the level recorded for October 2015. Of the total pet coke consumed in the country during FY17-1HFY18, about 50 percent was sourced domestically and the remaining through imports. According to its assessment, 35 percent of the total pet coke imports were consumed by the cement industry.

The CNX Nifty is currently trading at 10477.85, up by 14.65 points or 0.14% after trading in a range of 10440.75 and 10494.45. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Lupin up by 2.07%, Hero MotoCorp up by 1.97%, ONGC up by 1.97%, Tata Motors up by 1.36% and GAIL India up by 1.35%. On the flip side, Dr. Reddy’s Lab down by 1.54%, HPCL down by 1.16%, Tata Steel down by 1.08%, Adani Ports & SEZ down by 0.94% and Power Grid down by 0.79% were the top losers.

The Asian markets were trading mostly in red; Jakarta Composite decreased 66.6 points or 1.08% to 6,101.07, Hang Seng was down by 53.14 points or 0.18% to 29,200.52, Shanghai Composite shed 16.75 points or 0.51% to 3,279.79 and KOSPI Index dipped 6.16 points or 0.25% to 2,472.37.

On the flip side, FTSE Bursa Malaysia KLCI increased 12.45 points or 0.72% to 1,749.40, Nikkei 225 rose 23.72 points or 0.1% to 22,891.72 and Taiwan Weighted surged 37.18 points or 0.36% to 10,504.52.