Benchmarks erase losses to trade flat

Indian equity benchmarks added strength to trade above neutral line in morning session on account of buying in front line blue chip counters. Traders remained on sidelines ahead of Union Budget 2018-19, to be announced on February 1, 2018. The rupee was trading nearly higher against dollar in early trade on Wednesday, on rising global profile of India at the WEF in Davos. Foreign Portfolio Investors purchased shares worth a net Rs 1,229.35 crore on Tuesday, as per provisional data of the stock exchanges. Domestic Institutional Investors (DIIs) bought shares worth a net Rs 169.03 crore yesterday. The sentiments got some support with Niti Aayog’s former vice chairman Arvind Panagariya's statement 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.

Some support also came with Finance Minister Arun Jaitley expressing confidence about the Indian economy’s potential, he said that India will be one of the three largest economies in the world over the next 25 years. Investors shrugged off the S&P Global Ratings report which enlightened that the Indian economy is shaking off its post-GST implementation woes but risks from higher oil prices have reappeared. International oil prices have been rising which has also led to increased prices of petrol and diesel. A majority of India’s import bill stem from crude oil purchases.

Traders were seen piling up position in IT, TECK and Oil & Gas stocks, while selling was witnessed in Telecom, Consumer Durables and Basic Materials sector stocks. In scrip specific development, United Spirits was trading under pressure after the country’s largest liquor firm reported a 9 per cent decline year-on-year in its net profit for the quarter ended December at Rs 135 crore, mainly due to higher marketing spends and exceptional items. The maker of McDowell’s whiskey said underlying net sales declined 2 per cent in the third quarter.

On the global front, the Asian markets were trading mostly in red. Japan’s exports to China and Asia hit record levels as shipments rose for a 13th straight month in December and manufacturing growth hit a four-year high in January, pointing to an economy that powered through the fourth quarter and into 2018. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 36,100 and 11,050 levels respectively. The market breadth on BSE was negative in the ratio of 794:1697, while 106 scrips remained unchanged.

The BSE Sensex is currently trading at 36155.15, up by 15.17 points or 0.04% after trading in a range of 36036.51 and 36268.19. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.48%, while Small cap index was down by 0.59%.

The only gaining sectoral indices on the BSE were IT up by 3.37%, TECK up by 2.01% and Oil & Gas up by 0.20%, while Telecom down by 3.14%, Consumer Durables down by 1.23%, Basic Materials down by 0.76%, Industrials down by 0.73% and Metal down by 0.64% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 4.31%, Infosys up by 2.93%, Wipro up by 2.03%, ONGC up by 1.13% and Yes Bank up by 0.92%.

On the flip side, Bharti Airtel down by 5.73%, Tata Motors down by 2.22%, ICICI Bank down by 2.17%, Asian Paints down by 1.51% and Hindustan Unilever down by 1.41% were the top losers.

Meanwhile, expressing confidence about growth potential in Indian economy, Finance Minister Arun Jaitley has said that the country may be among the top three largest economies in the world over the period of next 25 years as it had already shown its capacity to grow even in adverse conditions. He also said that India stood as an exception in a world where most countries had started to increasingly look inwards.

The minister has stated that the growth story of Asean countries was quite similar to the Indian story as growth eluded both these regions when the Western world was growing at a fast pace. He also pointed out that when the Western world was growing faster, when the industrial revolution was paying dividends to that part of the world, these were the countries which were still struggling. He noted that Indian economic growth and development was somewhat a latter prospect. Adding further, he said that Indian story was also somewhat similar as from a very modest growth rate in the previous 25 years, the country had picked up and had now reached a point where it had become one of the fastest growing economies.

Jaitley further said that trade with Asean countries was of great importance to India as Look East Policy was one of the essential pillars of Indian foreign policy. He also noted that India and the Asean nations represent an aspirational world and this aspirational world is what houses two billion people and trade has the capacity to give that necessary impetus to the economy. He also believed that expanding the trade relations between Asean countries and India would lead to mutual benefits for both regions.

The CNX Nifty is currently trading at 11085.00, up by 1.30 points or 0.01% after trading in a range of 11046.15 and 11110.10. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were TCS up by 4.61%, HCL Tech up by 3.98%, Tech Mahindra up by 3.55%, GAIL India up by 3.23% and Infosys up by 2.88%.

On the flip side, Bharti Airtel down by 6.05%, Tata Motors down by 2.28%, ICICI Bank down by 2.24%, Asian Paints down by 1.70% and Hindustan Unilever down by 1.58% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 192.91 points or 0.8% to 23,931.24, Taiwan Weighted decreased 117.66 points or 1.05% to 11,135.45, Hang Seng decreased 92.9 points or 0.28% to 32,837.80, Jakarta Composite decreased 20.81 points or 0.31% to 6,614.52, FTSE Bursa Malaysia KLCI decreased 0.91 points or 0.05% to 1,837.13 and KOSPI Index decreased 0.2 points or 0.01% to 2,536.40.

On the other hand, Shanghai Composite increased 5.08 points or 0.14% to 3,551.59.