Benchmarks trade slightly in red in early deals

Snapping five day’s gaining streak, Indian equity benchmarks made a pessimistic start and are trading slightly in red at this point of time, as traders opted to book profit after five days of consecutive rally. Traders also opted to remain on sidelines ahead of Union Budget 2018-19, to be announced on February 1, 2018. However, losses remained capped as traders took some solace with former Niti Aayog vice chairman Arvind Panagariya’s statement that India has the potential to achieve 10 per cent growth rate, but it needs major reforms in areas in labour laws and land acquisition. He said Indian economy grew 7.5 cent in the first three years of the Narandra Modi government, but two major reforms - demonetisation and goods and services tax - brought the growth rate down a little. Traders also took note of Finance Minister Arun Jaitley’s statement where expressing confidence about the economy’s potential, he is hoping that it would become the third largest economy over the next 25 years.

On the global front, Asian markets are trading mostly in red at this point of time despite Wall Street closing higher, as investors stateside focused on earnings releases. Japanese market edged lower, as traders reacted negatively to weaker than expected Japanese trade data for the month of December. The US markets continued previous session’s northward journey and ended higher on Tuesday, as lawmakers managed to re-open the government following a brief shutdown, passing a stopgap bill funding the government until February 8.

Back home, losses also remained capped as traders took some comfort with Prime Minister Narendra Modi showcasing India’s growth story to world leaders and called out for tackling the three major challenges the world faces currently - climate change, terrorism and threat to globalisation. In scrip specific development, Biocon gained on entering into business transfer agreement with BBIL, while Dilip Buildcon advanced on bagging Rs 1,522 crore order from NHAI.

The BSE Sensex is currently trading at 36073.10, down by 66.88 points or 0.19% after trading in a range of 36036.51 and 36268.19. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.59%, while Small cap index was down by 0.83%.

The few gaining sectoral indices on the BSE were IT up by 1.26%, TECK up by 0.54% and Oil & Gas up by 0.26%, while Telecom down by 2.68%, Metal down by 1.21%, Consumer Durables down by 1.07%, Basic Materials down by 1.04% and Industrials down by 0.98% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.50%, HDFC up by 1.46%, TCS up by 1.31%, Infosys up by 1.17% and Wipro up by 0.76%. On the flip side, Bharti Airtel down by 4.26%, ICICI Bank down by 2.47%, Tata Motors down by 2.16%, Adani Ports down by 1.83% and Reliance Industries down by 1.77% were the top losers.

Meanwhile, Niti Aayog’s former vice chairman Arvind Panagariya has said that India is headed to become the world’s fifth largest economy and it has the potential to achieve 10% growth rate. He added that for India to achieve the double-digit growth, it needs major reforms in labour and land acquisition laws. It also needs significant privatization and a major reform of civil service, which is quite not sufficient to handle the large economy that India is now.

Panagariya, who is also the professor of economics at the prestigious Columbia University, has said that Indian economy grew 7.5% in the last three years, but two major reforms that are demonetisation and goods and services tax brought the growth rate down a little. He added that in the current fiscal India will end up at 6.5%, which is also a pretty good growth rate. He also said “By all accounts, I have no doubt that India will get back to 8% plus growth rate. India really today is probably the only game in the town”. He further said that India will sustain its high growth rate for the next two decades at least with the current trajectory of reforms, unless it starts making mistakes again.

Talking about the budget, former vice chairman of Niti Aayog said that the next budget is unlikely to be different from the previous budgets. He also said that “It would be reform-oriented budget in my view. I think there is a lot of talk about reaching the fiscal consolidation plan”. Adding that the agriculture sector could see more emphasis in the upcoming budget, he expects that the budget will give clear indication of reforms. Refuted the notion that there was a large-scale unemployment in India, he said unemployment in India is not very high. Jobs are being created, but as the way policies were being adopted in India, in the end it gives very little incentive to employers to employ people in the formal sector.

The CNX Nifty is currently trading at 11069.80, down by 13.90 points or 0.13% after trading in a range of 11046.15 and 11110.10. There were 21 stocks advancing against 28 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were HCL Tech up by 3.53%, GAIL India up by 3.50%, TCS up by 2.79%, ONGC up by 1.45% and HDFC up by 1.38%. On the flip side, Bharti Airtel down by 4.45%, ICICI Bank down by 2.37%, Tata Motors down by 1.90%, Hindalco down by 1.83% and Reliance Industries down by 1.61% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 decreased 145.34 points or 0.6% to 23,978.81, Taiwan Weighted declined 116.24 points or 1.03% to 11,136.87, Hang Seng shed 92.9 points or 0.28% to 32,837.80, Jakarta Composite dropped 22.14 points or 0.33% to 6,613.19 and FTSE Bursa Malaysia KLCI was down by 1.74 points or 0.09% to 1,836.30.

On the flip side, KOSPI Index increased 0.1 points to 2,536.70 and Shanghai Composite was up by 5.08 points or 0.14% to 3,551.59.