Sensex, Nifty back in green in late afternoon deals

The local benchmarks recovered all of their losses to come back in green terrain in late afternoon session, on account of firm opening in European markets. Among all the sectoral indices, Energy index gained the most, followed by Oil & Gas and Banking. Traders were taking support from US-India Strategic Partnership Forum’s (USISPF) report that India's decision to relax FDI norms in various sectors would make it a much more attractive destination for overseas investors. The markets also got some support with Niti Aayog Vice Chairman Rajiv Kumar’s statement that economy is expected to clock growth of 7.5 percent in 2018. He further noted that as the economy picks up, employment will pick up. However, gains were limited as traders got cautious ahead of corporate earnings and macro data (November IIP and December CPI inflation) due later today. Some concerns also came with India Ratings and Research’s latest report that private sector capital expenditure growth is expected to remain muted with slowing pace, for next two financial years on account of weak domestic consumption demand, global overcapacity and negative impact of Goods and Services Tax (GST) on working capital. The broader markets traded lower, contrasting the larger peers.

On the global front, European markets were trading in green, on signs of progress on the German political front and traders focused on fresh batch of corporate earnings reports. Asian markets were also trading in green. Back home, in scrip specific development, Kamdhenu traded jubilantly after the company joined hands with Graphenstone, Spain, a leading global paint manufacturer, to introduce first of its kind, safe, eco-friendly and green paints in India.

The BSE Sensex is currently trading at 34536.76, up by 33.27 points or 0.10% after trading in a range of 34342.16 and 34638.42. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.27%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Energy up by 0.78%, Oil & Gas up by 0.76%, Bankex up by 0.49%, Metal up by 0.23% and Auto up by 0.14%, while Realty down by 1.42%, Telecom down by 1.16%, FMCG down by 0.66%, Healthcare down by 0.43% and Power down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.57%, ONGC up by 1.44%, Maruti Suzuki up by 1.03%, Reliance Industries up by 0.99% and HDFC up by 0.82%. On the flip side, Bharti Airtel down by 1.46%, Sun Pharma down by 1.06%, ITC down by 1.04%, TCS down by 0.95% and Tata Motors - DVR down by 0.94% were the top losers.

Meanwhile, private sector capital expenditure growth is expected to remain muted with slowing pace, for next two financial years on account of weak domestic consumption demand, global overcapacity and negative impact of Goods and Services Tax (GST) on working capital. As per credit rating agency, India Ratings and Research’s (Ind-Ra) latest report, the private capex is likely to grow at a CAGR of only 5-8% over FY18-FY20 which is much lower than 13% growth rate during FY09-12, but better than the 4% annual average of FY13-17.

As per the report, during FY18-FY20, the companies will spend more on their maintenance and essential upgrades and meaningful capex recovery will happen after FY20. It further noted that the recovery will be led by 125 non-stressed companies out of total top 200 asset heavy companies, while remaining stressed companies will keep capital expenditure subdued over the next two to three years.

The report found that leveraged sectors like infrastructure, metals and mining and power could lower their capex spending over FY18-FY20 compared with oil and gas, auto and telecom sectors. Besides, within these 6 sectors, private entities will be major drivers of capex recovery as compared to the public sector undertaking (PSU). The rating agency also found that government spending declined, at growth rate of 6% only in FY17 as against 40% in FY16 and pointed that despite GST‘s augmentation to the government revenues, the overall investment cycle is unlikely to revive, owing to the limited ability of the government to scale up spending owing to fiscal rectitude.

The CNX Nifty is currently trading at 10658.80, up by 7.60 points or 0.07% after trading in a range of 10597.10 and 10690.25. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.39%, HPCL up by 1.84%, ONGC up by 1.74%, Zee Entertainment up by 1.69% and Maruti Suzuki up by 1.14%. On the flip side, Bharti Airtel down by 1.48%, Adani Ports & SEZ down by 1.14%, ITC down by 1.07%, Lupin down by 1.07% and Indiabulls Housing Finance down by 1.03% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 3.6 points or 0.1% to 3,428.94, FTSE Bursa Malaysia KLCI increased 4.24 points or 0.23% to 1,821.12, KOSPI Index increased 8.51 points or 0.34% to 2,496.42, Taiwan Weighted increased 73.9 points or 0.68% to 10,883.96 and Hang Seng increased 292.15 points or 0.94% to 31,412.54. On the flip side, Nikkei 225 decreased 56.61 points or 0.24% to 23,653.82 and Jakarta Composite decreased 18.18 points or 0.28% to 6,368.16.

All European markets were trading in green; France’s CAC increased 5.55 points or 0.1% to 5,494.10, UK’s FTSE 100 increased 9.42 points or 0.12% to 7,772.36 and Germany’s DAX increased 33.18 points or 0.25% to 13,236.08.