Benchmarks continue weak trade in morning session

Indian equity benchmarks traded below neutral line in morning session as investors await December quarter earnings. The street is eyeing official start of the third quarter earnings season with quarterly earnings from TCS and IndusInd Bank due later in the day. The rupee declined against dollar in the early trade on account of buying of American currency by banks and importers. Crude oil prices were ruling at around three-year high levels, putting pressure on the rupee as India is a major oil importer. As per provisional data released by the stock exchanges, Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 572.26 crore on January 10. Domestic Institutional Investors (DIIs) bought shares worth a net Rs 600.24 crore.

The downside was however capped after Moody’s said that India and China remain the fastest growth economies in Asia Pacific region. The global rating agency had upgraded India to Baa2stable in mid November. In a report released on Wednesday, it said a favourable growth environment underpins its stable outlook for sovereign creditworthiness in Asia Pacific over 12-18 months, although high leverage remains a key credit constraint. Investors too note that in a big bang FDI reforms ahead of the budget, the government permitted foreign airlines to invest up to 49% in debt-ridden Air India, and eased norms for investment in single brand retail, construction and power exchanges. The government also relaxed Foreign Direct Investment (FDI) policy for medical devices and audit firms associated with companies receiving overseas funds.

Meanwhile, agri related stocks remained in focus, as the economists during an interactive session with Prime Minister Narendra Modi, organised by NITI Aayog suggested need to shift focus to increasing farmers’ income rather than increasing just production. Select real estate stocks were buzzing in today’s trade on private report that residential real estate market is slowly coming out of the shadow of demonetization woes as housing sales across top eight property markets for the quarter ended December have risen 28% from a year ago to 51,701 apartments. While this is an uptick compared to a lower base recorded during the demonetization quarter, the performance was also helped by the implementation of RERA and effective 10-15% price correction across key markets.

Traders were seen piling up position in Realty, Telecom and Consumer Durables & Gas stocks, while selling was witnessed in Oil & Gas, Energy and Bankex sector stocks. In scrip specific development, Visa Steel was trading in green as the company which was taken to the National Company Law Tribunal (NCLT) on January 5 by lead lender State Bank of India for defaulting on Rs 3,600 crore of loans, is pursuing a resettlement plan with its bankers. The proposal includes selling its loans to asset reconstruction companies. India Nippon Electricals was trading firm as the company has proposed to undertake sub-division of equity shares. The board will consider the proposal on January 29.

On the global front, the Asian markets were trading in red. China’s Premier Li Keqiang said the economy is expected to have grown around 6.9 percent last year, accelerating from a 26-year low the year before. Li added that in the past year, China’s economy has maintained a steady and favorable trend, with the overall situation better than expected. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 34,500 and 10,650 levels respectively. The market breadth on BSE was positive in the ratio of 1527:975, while 114 scrips remained unchanged.

The BSE Sensex is currently trading at 34419.75, down by 13.32 points or 0.04% after trading in a range of 34406.46 and 34484.85. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were Realty up by 1.68%, Telecom up by 0.46%, Consumer Durables up by 0.28%, Basic Materials up by 0.25% and IT up by 0.24%, while Oil & Gas down by 0.26%, Energy down by 0.24%, Bankex down by 0.19%, PSU down by 0.08% and Metal down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.12%, Tata Motors up by 0.90%, Kotak Mahindra Bank up by 0.83%, Infosys up by 0.70% and Hindustan Unilever up by 0.42%.

On the flip side, Wipro down by 1.18%, Axis Bank down by 1.12%, ICICI Bank down by 0.82%, Coal India down by 0.78% and Yes Bank down by 0.75% were the top losers.

Meanwhile, global rating agency Moody's, which had upgraded India to Baa2 stable in mid November, in its latest report has said that India and China remain the fastest growth economies in Asia Pacific region.  It further added that a gradual moderation in growth in China (A1 stable) and temporary slowdown in India (Baa2 stable) will be balanced by robust growth trends in other Asian economies.

Talking about Asia Pacific as on whole, the report said that a favourable growth environment underpins its stable outlook for sovereign creditworthiness in Asia Pacific over 12-18 months, although high leverage remains a key credit constraint. The agency further said that most of the economies of the region will continue to be highly leveraged in the government, corporate and household sectors, due to years of slow revenue growth and low interest rates.

For 2018, Moody’s has predicted a 6.5 percent growth for the Asia Pacific emerging markets, 5.9 percent for the frontier economies and 1.8 percent for the advanced economies. The report kept a stable outlook for 21 of the 24 economies included in the report, including Japan (A1), China (A1), and India (Baa2), while the two others got a positive outlook, including Vietnam (B1).

The CNX Nifty is currently trading at 10618.70, down by 13.50 points or 0.13% after trading in a range of 10612.35 and 10641.25. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 2.47%, Bharti Airtel up by 1.26%, Tech Mahindra up by 1.07%, Kotak Mahindra Bank up by 0.78% and Tata Motors up by 0.69%.

On the flip side, Cipla down by 1.54%, HPCL down by 1.41%, Wipro down by 1.41%, Axis Bank down by 1.20% and Coal India down by 1.04% were the top losers.

The Asian markets were trading in red; Nikkei 225 decreased 150.01 points or 0.63% to 23,638.19, Taiwan Weighted decreased 52.09 points or 0.48% to 10,779.00, Hang Seng decreased 36.5 points or 0.12% to 31,037.22, Jakarta Composite decreased 8.63 points or 0.14% to 6,362.54, FTSE Bursa Malaysia KLCI decreased 7.57 points or 0.42% to 1,815.35, KOSPI Index decreased 7.39 points or 0.3% to 2,492.36 and Shanghai Composite decreased 6.24 points or 0.18% to 3,415.60.