Bourses enter into red terrain in late morning session

Erasing all of their gains, key Indian benchmarks entered into red terrain in late morning session and were now hovering near their intraday low points, amid weak Asian cues. Selling in Consumer Durables, Capital Goods and Banking stocks dragged the indices down. Besides, traders got cautious with chief statistician TCA Anant’s statement that lower-than-expected inflation is estimated to pull down nominal GDP growth to 9.5% in FY18, against the budgeted 11-11.5%. He further added that this will impact the final projection of the FY18 fiscal deficit (expressed as a percentage of nominal GDP). Some concerns also came with rating agency ICRA’s latest report stating that credit growth of Infrastructure finance firms will remain subdued over the short term. Along with the larger peers, the broader indices too fell in late morning deals and traders also remained on sidelines ahead of the outcome of meeting organised by government think tank NITI Aayog, and attended by a host of ministers including Finance Minister Arun Jaitley, NITI Aayog functionaries and leading economists.

On the global front, Asian markets were trading mostly in red, despite the positive cues overnight from Wall Street amid optimism about the upcoming corporate earnings season. Investors kept an eye on bond yields after the yield on the benchmark ten-year US Treasuries rose to a nearly ten-month closing high. Back home, in scrip specific development, Bharti Airtel was trading in green after it launched VoLTE services in Coimbatore.

The BSE Sensex is currently trading at 34371.13, down by 72.06 points or 0.21% after trading in a range of 34368.42 and 34565.63. 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 0.17%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Realty up by 1.15%, Oil & Gas up by 0.57%, Energy up by 0.43%, Telecom up by 0.40% and FMCG up by 0.25%, while Consumer Durables down by 0.66%, Capital Goods down by 0.40%, Bankex down by 0.39%, Basic Materials down by 0.23% and Auto down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 1.48%, Coal India up by 1.28%, Wipro up by 1.23%, ONGC up by 0.63% and ITC up by 0.37%. On the flip side, Asian Paints down by 1.25%, Yes Bank down by 1.17%, Tata Steel down by 1.05%, Dr. Reddy’s Lab down by 0.92% and Tata Motors - DVR down by 0.84% were the top losers.

Meanwhile, the World Bank in its ‘2018 Global Economics Prospect’ report, has expressed hopes that India’s Gross Domestic Product (GDP) will grow at 7.3 percent in the year 2018 and rise further to 7.5 percent in the following two years. It also observed that the country’s economy has enormous growth potential if compared to other emerging economies of the world, as it benefits from government’s comprehensive reforms. Despite initial setbacks from demonetisation and Goods & Services Tax (GST), it has projected the country’s GDP to have grown at 6.7 percent in 2017.

According to the report, to materialise its potential, India needs to take steps to boost investment prospects. It also noted that there are measures underway to do in terms of nonperforming loans and productivity. It also pointed out that on the productivity side, India has enormous potential with respect to secondary education completion rate. It added that all in all, improved labor market reforms, education and health reforms as well as relaxing investment bottleneck will help improve India's prospects.

The report further asserted that reducing youth unemployment is critical, and pushing for private investment, where problems are already well-known like bank assets quality issues and if these are done, India can reach its potential easily and exceed. It also said that India's growth potential would be around 7 percent for the next 10 years. It also said that the Indian government is very serious with GST being a major turning point and banking recapitalisation programme is really important. It added that the Indian government has already recognised some of these problems and undertaking measures and willing to see the outcomes of these measures.

The CNX Nifty is currently trading at 10599.85, down by 37.15 points or 0.35% after trading in a range of 10599.20 and 10655.50. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were HPCL up by 1.89%, Tech Mahindra up by 1.34%, Coal India up by 1.33%, Wipro up by 1.12% and Adani Ports & SEZ up by 1.07%. On the flip side, Asian Paints down by 1.51%, Indiabulls Housing Finance down by 1.45%, Yes Bank down by 1.33%, Eicher Motors down by 1.27% and Bajaj Finance down by 1.09% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 83.8 points or 0.77% to 10,831.09, Nikkei 225 decreased 48.93 points or 0.21% to 23,801.06, KOSPI Index decreased 8.62 points or 0.34% to 2,501.61, Shanghai Composite decreased 8.46 points or 0.25% to 3,405.44 and FTSE Bursa Malaysia KLCI decreased 1.05 points or 0.06% to 1,825.90.

On the flip side, Jakarta Composite increased 14.68 points or 0.23% to 6,387.83 and Hang Seng increased 77.37 points or 0.25% to 31,088.78.