Benchmarks trade flat in morning session

Indian equity benchmarks erased most of the gains and were trading near neutral line in absence of any upside triggers and consolidating after positive opening. The rupee declined against the dollar in early part after December trade deficit swelled. Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 32.92 crore, showed provisional data released by the stock exchanges. Domestic Institutional Investors (DIIs) sold shares worth a net Rs 173.28 crore. The sentiments dampened after the trade deficit widened to its highest level in over three years in December to $14.9 billion, a three-year peak. Exports climbed at a healthy pace in December but imports rose faster. Exports increased 12.3% to $27 billion last month, while higher gold and crude buys lifted imports by 21.1% to $41.9 billion. Oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) were trading in red as diesel prices have touched a record high of Rs 61.74 per litre and petrol prices have crossed Rs 71 as international oil rates continue to rally. Petrol price rose to Rs 71.18 per litre in Delhi, the highest since August 2014.

Investors took note that as wholesale inflation eased to 3.58% in December, India Inc urged the Reserve Bank of India (RBI) to reduce key policy rates to augment investments and boost economic growth. Besides, GST Council will meet this Thursday, which will also be the last meeting before Budget 2018. The council is likely to revise rates for electric vehicles, farm equipment, ease compliance & modify the reverse charge mechanism. The recommendations of the law review committee are also likely to be taken up for consideration by the GST Council, comprising Centre and states. Mixed reactions were displayed in jewellery stocks on report that the Commerce Ministry has pitched for reduction in import duty on gold in the forthcoming Budget with an aim to promote gold jewellery exports. The Gems and Jewellery Export Promotion Council (GJEPC) has demanded cut in import duty on gold to 4% from the current 10%.

Traders were seen piling up position in IT, TECK and Telecom stocks, while selling was witnessed in Realty, Energy and Metal sector stocks. Shares of Information Technology (IT) stocks surged as investors reacted to a weaker rupee at the interbank foreign exchange after concerns over trade deficit ballooning to a three-year high. In scrip specific development, Delta Corp was trading in green on reporting healthy results for the December quarter. The company reported a jump of over 300 percent at Rs 44.7 crore for the quarter, while revenues grew 56 percent at Rs 162 crore.

On the global front, the Asian markets were trading mostly in green. A private poll showed that China’s economy is expected to cool this year as a government-led crackdown on debt risks and factory pollution drag on overall activity. Beijing is in the second year of a relentless campaign to wean China off its debt-heavy investment model, clamping down on everything from speculative property lending to shadow-bank financing activities as policy makers look to foster sustainable longer term growth. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 34,800 and 10,700 levels respectively. The market breadth on BSE was negative in the ratio of 692:1907, while 78 scrips remained unchanged.

The BSE Sensex is currently trading at 34856.05, up by 12.54 points or 0.04% after trading in a range of 34819.64 and 34936.03. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.54%, while Small cap index was down by 0.77%.

The top gaining sectoral indices on the BSE were IT up by 2.35%, TECK up by 1.96%, Telecom up by 0.29%, Consumer Durables up by 0.20% and Capital Goods up by 0.08%, while Realty down by 1.60%, Energy down by 1.32%, Metal down by 1.25%, Oil & Gas down by 1.03% and Power down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 3.33%, TCS up by 3.16%, Infosys up by 2.09%, Hindustan Unilever up by 1.02% and Adani Ports & Special Economic Zone up by 0.67%.

On the flip side, Coal India down by 2.05%, Reliance Industries down by 1.37%, HDFC down by 1.28%, Tata Steel down by 0.97% and Yes Bank down by 0.88% were the top losers.

Meanwhile, concerned over delayed refund under Goods and Services Tax (GST) regime, various export bodies have written to the Union Commerce Ministry seeking faster refunds. The delayed refunds, exporters say, are leading to working capital crunch, though they have expressed hope of a solution to the issue after the Budget.

Chairman of the Plastics Export Promotion Council (PLEXCONCIL), Ashok K Basak said that IGST dues (refunds) to the tune of Rs 6,500 crore are pending over the last four months, while in case of the Chemical and Allied Products Export Promotion Council the dues stand at about Rs 11,257 crore.  He said that “We have written to the Ministry to ensure faster refunds and given a number of suggestions to ensure that working capital shortfall is met”.

TK Bhattacharyya, Executive Director, CAPEXIL, said that some of the suggestions put forward include channelising refunds through nationalised banks, providing loans against the IGST dues or issuing bank guarantees and letter of undertaking against the due amounts. He added that “We are hopeful of the Ministry considering these recommendations once the Budget is over”. Total exports from PLEXCONCIL, CAPEXIL, Basic Chemicals, Cosmetics and Dyes Export Promotion Council (CHEMEXCIL), and Shellac and Forest Export Promotion Council (SHEFEXIL) accounted for $36.85 billion in FY17.

The CNX Nifty is currently trading at 10731.05, down by 10.50 points or 0.10% after trading in a range of 10724.45 and 10762.35. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Wipro up by 3.87%, HCL Tech up by 3.39%, TCS up by 3.33%, Tech Mahindra up by 3.17% and Infosys up by 2.00%.

On the flip side, HPCL down by 2.10%, Coal India down by 2.09%, BPCL down by 2.03%, Reliance Industries down by 1.61% and Hindalco down by 1.54% were the top losers.

The Asian markets were trading mostly in green; Taiwan Weighted increased 5.36 points or 0.05% to 10,961.67, Shanghai Composite increased 10.31 points or 0.3% to 3,420.80, KOSPI Index increased 11.06 points or 0.44% to 2,514.79, Jakarta Composite increased 31.45 points or 0.49% to 6,413.65, Nikkei 225 increased 183.64 points or 0.77% to 23,898.52 and Hang Seng increased 412.73 points or 1.32% to 31,751.60.

On the other hand, FTSE Bursa Malaysia KLCI decreased 4.11 points or 0.23% to 1,821.80.