Markets trade marginally lower; Realty, Metal stocks fall

Key Indian benchmarks continued their trade near neutral lines in late morning session, with marginal losses, despite firm Asian cues.  Heavy selling in Realty, Metal and Power stocks were putting some pressure on the markets. Sentiments remained downbeat, as the overall trade deficit widened to $14880.19 million during the month under review as against $10545.99 million in December 2016, the highest in more than three years. The trade deficit during April- December 2017-18, was $114857.05 million as against $78432.18 million in the same period last year. However, losses were limited as International Monetary Fund (IMF) highlighted that India is reclaiming its place as a growth leader after a short period of slowdown in the economy. Some relief also came with Prime Minister Narendra Modi promising more economic reforms to further improve the ease of doing business in India as he invited Israeli companies to invest here. PM further noted that India is the fastest growing economy with FDI inflows at all time high.

On the global front, Asian markets were trading mostly in green, but gains were modest as investors paused for breath after recent gains amid the absence of fresh catalysts. The US markets were closed overnight for a public holiday. Back home, in scrip specific development, Seamec was trading higher after the company deployed its vessel ‘Seamec Princess’ with L&T Hydrocarbon Engineering for a period of about 19 days.

The BSE Sensex is currently trading at 34836.42, down by 7.09 points or 0.02% after trading in a range of 34759.88 and 34936.03. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.00%, while Small cap index was down by 1.44%.

The only gaining sectoral indices on the BSE were IT up by 2.58% and TECK up by 2.10%, while Realty down by 2.26%, Metal down by 1.61%, Power down by 1.59%, Utilities down by 1.37% and Energy down by 1.36% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.34%, Wipro up by 3.18%, Infosys up by 2.35%, ICICI Bank up by 0.93% and Hindustan Unilever up by 0.57%. On the flip side, Coal India down by 1.82%, Tata Steel down by 1.60%, Tata Motors down by 1.52%, Tata Motors - DVR down by 1.50% and Reliance Industries down by 1.44% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings in its latest report has said that the government’s recent move to permit 100% foreign direct investment (FDI) in single-brand retail under the automatic route is expected to increase the market share of organised retail in India from 7% to 10% by financial year 2020. Before the change in rules, it had expected the market share of organised retailers to grow to 9% by fiscal 2020, based on healthy revenue growth of about 18% of organised brick and mortar (B&M) retailers.

As per the report, better operating environment for single-brand retail would also mean the pace of store additions will be faster than the annual 10-12%. It also pointed out that the effects of the government’s move will be more pronounced in apparel, luxury goods, home decor, footwear, and electronics, which make up about 45% of the organised retail revenues. It noted that global single-brand retailers facing growth headwinds in their key geographies will now be more than keen to peg a tent here and those already present can step up investments. It added that the previous sourcing norms were a bottleneck to scaling up of operations.

The ratings agency further said that while FDI approvals under the automatic route will lower the time to commence business, the relaxation of 30% local sourcing norms for the first five years by allowing inclusion of incremental sourcing for global operations will also provide sufficient time for new entrants to set up and stabilise their sourcing base. It stated that this could mean increase in competition for domestic organised brick and mortar retailers. However, more foreign retailers vending their ware will also lead to sharper focus on, and improvements in, supply chain efficiencies which will benefit the sector over the medium-term. It believes that healthy growth prospects for the sector and benefits of scale and focus on profitability, will help offset the impact of higher capital spending over the medium-term.

The CNX Nifty is currently trading at 10732.65, down by 8.90 points or 0.08% after trading in a range of 10705.20 and 10762.35. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 4.26%, Wipro up by 3.67%, TCS up by 3.21%, Tech Mahindra up by 2.91% and Infosys up by 2.43%. On the flip side, Bajaj Finance down by 2.21%, HPCL down by 1.90%, Vedanta down by 1.83%, Coal India down by 1.73% and BPCL down by 1.68% were the top losers.

Asian markets were trading mostly in green; Shanghai Composite increased 14.59 points or 0.43% to 3,425.07, KOSPI Index increased 19.49 points or 0.78% to 2,523.22, Jakarta Composite increased 28.04 points or 0.44% to 6,410.23, Taiwan Weighted increased 29.8 points or 0.27% to 10,986.11, Nikkei 225 increased 243.93 points or 1.03% to 23,958.81and Hang Seng increased 385.8 points or 1.23% to 31,724.67.

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