Benchmarks trade with caution in early deals

Extending their consolidation mood, Indian equity benchmarks made a cautious start and are trading flat in early deals amid weak global cues. Traders remained concerned with the details of the minutes of the MPC meeting held on December 5 and 6 released by the RBI, where RBI Governor Urjit Patel flagged concerns over rising global oil prices and uncertainties on fiscal and external fronts. Two other members in the panel, Deputy Governor Viral Acharya and Executive Director Michael Debabrata Patra, flagged the issue of inflation in petroleum products. However, traders are getting some solace with the Union Cabinet approving the Consumer Protection Bill, 2017, paving the way for its introduction in Parliament. Once approved by Parliament, the new law will replace the current Consumer Protection Act, 1986.

Global cues too remained somber with Asian markets exhibiting mixed trend at this point of time after U.S. equities dipped in the wake of congressional passage of U.S. tax cuts, which was already priced in. The US markets continued their consolidation mood and ended modestly lower in last session, failing to sustain an initial upward move on news that Republican lawmakers managed to send a sweeping tax reform bill to President Donald Trump's desk.

Back home, textile stocks remained on buyers’ radar, as the Cabinet Committee on Economic Affairs has approved the scheme for Capacity Building in Textile Sector (SCBTS). The scheme will be applicable from 2017-2018 to 2019-2020 with an outlay of Rs 1,300 crore. In scrip specific statement, IVRCL surged on entering into Share Purchase Agreement with Cube, while HDFC rose on approving sale of 6.3% stake in CAMS for Rs 209.5 crore.

The BSE Sensex is currently trading at 33756.12, down by 21.26 points or 0.06% after trading in a range of 33753.34 and 33860.99. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.21%, while Small cap index was up by 0.48%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.05%, Capital Goods up by 0.79%, Basic Materials up by 0.54%, Industrials up by 0.48% and Metal was up by 0.41%, while Telecom down by 0.76%, Auto down by 0.70%, Realty down by 0.42%, Consumer Durables down by 0.39% and Bankex was down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.70%, Hero MotoCorp up by 1.32%, Larsen & Toubro up by 1.06%, HDFC up by 0.71% and Tata Steel up by 0.68%. On the flip side, Mahindra & Mahindra down by 3.18%, Bharti Airtel down by 1.00%, Axis Bank down by 0.95%, ICICI Bank down by 0.92% and Indusind Bank down by 0.88% were the top losers.

Meanwhile, the government is looking at further easing foreign direct investment (FDI) in the telecom services including infrastructure, by allowing 100 percent foreign equity through the automatic route which allows firms to attract foreign funds without its approval. At present, all telecom services, including telecom infrastructure providers, such as basic, cellular, unified access services, unified licence (access services), unified licence, dark fibre, right of way, duct space and tower have FDI cap/equity up to 100 percent and automatic up to 49 percent. The inflow of overseas investment beyond that requires government approval because of security reasons.

Increasing the FDI limit to 100 percent under automatic route for infrastructure providers would create transparency and abolish bureaucracy or red-tapism. The proposal is likely to be considered by the Telecom Commission, the apex decision-making body of the Department of Telecom. The panel is also likely to discuss the relief package recommended by an inter-ministerial group (IMG) for the telecom sector which is reeling under debt of around Rs 4.5 lakh crore. The panel may also consider the approval of grants for IITs to set up a lab for indigenous development and testing of 5G technologies.

Earlier, the Telecom Commission had in-principle approved the extension of time period for the payment of spectrum bought in auctions by telcos to 16 years from the current 10 years, as recommended by the IMG. It had also approved the IMG recommendation to lower the interest rate charged over penalties imposed on service providers with slight modifications.

The CNX Nifty is currently trading at 10446.85, up by 2.65 points or 0.03% after trading in a range of 10439.55 and 10473.95. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.49%, Sun Pharma up by 1.46%, HCL Tech up by 1.13%, BPCL up by 1.12% and Hero MotoCorp up by 1.03%. On the flip side, Mahindra & Mahindra down by 3.41%, Bharti Airtel down by 1.08%, Bharti Infratel down by 1.00%, ICICI Bank down by 0.92% and Infosys down by 0.88% were the top losers.

Asian markets are trading mixed; FTSE Bursa Malaysia KLCI rose 0.59 points or 0.03% to 1,747.22, Shanghai Composite increased 15.69 points or 0.48% to 3,303.29, Jakarta Composite surged 54.45 points or 0.89% to 6,163.93 and Hang Seng was up by 144.61 points or 0.49% to 29,378.70.

On the flip side, KOSPI Index declined 36.3 points or 1.47% to 2,436.07, Nikkei 225 decreased 20.74 points or 0.09% to 22,870.98 and Taiwan Weighted was down by 2.79 points or 0.03% to 10,501.73.