Benchmarks pare gains to end flat

Paring all of their early gains, Indian equity benchmarks once again ended flat on Wednesday, as traders remained on sidelines ahead of ahead of corporate results for the third quarter FY18 to be released later this month and service PMI data to be released tomorrow. However, markets made optimistic start with key gauges hitting their crucial 10,500 (Nifty) and 34,000 (Sensex) levels in morning deals with traders reacting positively to the last day’s report of manufacturing PMI rising to 54.7 in December 2017 from 52.6 in November on the back of robust improvement in the health of the sector since December 2012. Some support also came with the Rajya Sabha unanimously passing the Insolvency and Bankruptcy Code (Amendment) Bill that replaces an Ordinance that prevents unscrupulous persons from misusing or vitiating the provisions of the Insolvency and Bankruptcy Code.

Traders also took some encouragement with foreign brokerage report stating that India’s growth rate is expected to accelerate over the coming year and is likely to improve further to 7.6% by 2019-20 as key sectors would revive from disruptions related to the implementation of GST and demonetization. The report further said the recovery in India’s GDP growth will likely be relatively gradual, preventing price pressures from rebounding and allowing the Reserve Bank of India to keep rates on hold for the time being. However, really got fizzled out and markets ended lower with traders booking all of their early gains ahead of key corporate results starting next week. Investors are awaiting corporate results, including from Tata Consultancy Services and Infosys that are scheduled next week, amid signs the economy is recovering after the withdrawal of high-denomination currency bills in late 2016 and the introduction of a national goods and services tax last year. Meanwhile, the government has notified lower 1% GST rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it. The finance ministry has notified the changes decided by the GST Council, chaired by Union Finance Minister Arun Jaitley and comprising state counterparts, in November 2017.

On the global front, European markets were trading mostly in green in early deals. UK construction sector activity eased slightly in December, missing forecasts and dampening optimism over the British economy. Asian markets ended mostly in green, as optimism about global growth buoying investors’ sentiments.

Back home, telecom sector remained in focus, as the Telecom Regulatory Authority of India (Trai) released a detailed set of regulations for interconnection pacts between operators and mandated a daily penalty of Rs 1 lakh per circle for non-compliance of these norms. However, auto stocks edged lower despite rating agency ICRA forecasting domestic tractor industry to touch an all time high sales in FY-18 led by improved farm sentiments and two consecutive normal monsoon. The agency expects domestic tractor industry to record a volume growth of 12-13% during FY-18 with positive growth momentum also likely to spill over in next fiscal.

Finally, the BSE Sensex slipped 18.88 points or 0.06% to 33,793.38, while the CNX Nifty was up by 1.00 points or 0.01% to 10,443.20.

The BSE Sensex touched a high and a low of 33,998.37and 33,765.43, respectively and there were 17 stocks on gaining side as against 14 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.53%, while Small cap index was up by 0.98%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.49%, Basic Materials up by 1.48%, Metal up by 1.35%, Industrials up by 1.02% and Consumer Durables was up by 0.80%, while Auto down by 0.55%, IT down by 0.32%, Oil & Gas down by 0.26%, TECK down by 0.20% and Healthcare was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 2.78%, Larsen & Toubro up by 2.17%, ICICI Bank up by 1.88%, Yes Bank up by 1.33% and Tata Motors - DVR up by 1.03%. On the flip side, Dr. Reddy’s Lab down by 2.97%, Wipro down by 2.73%, ONGC down by 1.65%, Bajaj Auto down by 1.61% and Maruti Suzuki down by 1.35% were the top losers.

Meanwhile, India’s renewable energy installed capacity has surpassed 62 gigawatt (GW) mark as on November 30, 2017. The country's renewable energy capacity stood at 62.05 GW, which comprises 32.75 GW of wind energy, 16.61 GW of solar power, 8.29 GW of bio-power and 4.40 GW of small hydro power (up to 25 MW). The government has already up-scaled the target of renewable energy capacity to 175 GW by the year 2022 which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power.

Power and New & Renewable Energy Minister RK Singh has said that the power generated from these sources is fed into the grid and then utilised by distribution companies to provide the same to consumers. He also said that tidal energy cannot be presently harnessed on commercial basis due to high capital cost ranging from Rs 30 crore to 60 crore per megawatt (MW). He indicated that solar, wind and thermal power cost around Rs 6 crore per MW for creating new capacities as per industry information. He also pointed out that there is an estimated potential of about 8000 MW of tidal energy with 7000 MW in the Gulf of Kambhat, 1200 MW in the Gulf of Kutch in Gujarat, and about 100 MW in the Gangetic delta in Sunderbans in West Bengal.

The minister further highlighted that the peak power supply deficit in April-November 2017 was 2 percent in the country as 160.75 billion units (BU) was supplied against the peak demand of 164.06 BU. Similarly, he informed that energy deficit was recorded at 0.7 percent in April-November this fiscal as 809.49 BU was supplied against the demand of 815.34 BU. According to the Central Electricity Authority (CEA) 2017 Load Generation Balance Report, India would become power surplus nation. It said that all India power supply position indicates that the India is expecting a power surplus of 8.8 percent and peak surplus of 6.8 percent in the country during 2017-18.

The CNX Nifty traded in a range of 10,503.60 and 10,429.55. There were 28 stocks in green as against 22 stocks in red on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 2.86%, Larsen & Toubro up by 2.66%, Hindalco up by 1.69%, ICICI Bank up by 1.68% and Ambuja Cement up by 1.57%. On the flip side, Dr. Reddy’s Lab down by 2.85%, Wipro down by 2.78%, Bajaj Auto down by 1.90%, ONGC down by 1.63% and Maruti Suzuki down by 1.40% were the top losers.

European markets were trading mostly in green; France’s CAC increased 18.77 points or 0.35% to 5,307.37 and Germany’s DAX was up by 43.88 points or 0.34% to 12,915.27, while UK’s FTSE 100 was down by 2.31 points or 0.03% to 7,645.79.

Asian equity markets ended mostly in green on Wednesday, with firmer commodity prices on the back of a weaker dollar and optimism about global growth buoying investors’ sentiments. The dollar held somewhat steady in Asian trading as investors looked ahead to the minutes of the Federal Reserve's December policy meeting due later in the day. Chinese shares extended its rally, aided by strong gains in consumer and transport firms. Meanwhile, the Japanese market was closed for a holiday.