Benchmarks continue weak trade in morning session

Indian equity benchmarks continued their weak trade in morning session on account of selling in front line blue chip counters. The rupee made a positive opening against the dollar after trade protectionism cast its shadow on the US currency. As per provisional data released by the stock exchanges, foreign Portfolio Investors (FPIs) bought shares worth a net Rs 776.42 crore on Wednesday. Domestic Institutional Investors (DIIs) net offloaded shares worth Rs 193.87 crore. The market could remain volatile as traders may roll over positions in the Futures & Options (F&O) segment to February 2018 series. The January derivatives contract expires today. Investors took note that a day after PM spoke about Climate Change at Davos, a biennial report by Yale and Columbia Universities has ranked India among the bottom five countries on the Environmental Performance Index 2018, plummeting 36 points from 141 in 2016. The street took note that petrol and diesel prices have touched new highs in Delhi NCR and other metros on Wednesday. Petrol was sold at Rs 72.43 per litre in Delhi, the highest in three years. In Kolkata, Mumbai and Chennai, petrol was sold at Rs 75.13, Rs 80.30 and Rs 75.12 per litre respectively, also at over three-year high levels.

However, the downside was limited on private report which enlightened that waning effects from the Goods and Services Tax (GST) impact will help push the Indian GDP growth to 7% in FY19. The report added that the growth has slid from previous year’s 7.1% to 6.5% in FY18 due to the implementation of the GST. But as some of the short-run disruptions caused by GST got ironed out, the firm expects growth to rise in the next couple of years. Separately, the Department of Industrial Policy and Promotion (DIPP) notified easing of FDI rules for several sectors, including single brand retail, non- banking financial companies and construction. On January 10, in big bang reforms ahead of the BJP government’s last full Budget, the Union Cabinet had allowed 100% Foreign Direct Investment (FDI) in single brand retail and construction development under the automatic route.

Traders were seen piling up position in Metal, Capital Goods and Basic Materials stocks, while selling was witnessed in IT, TECK and PSU sector stocks. In scrip specific development, Pfizer was trading in green on reporting a 39.9% rise in its net profit at Rs 87.2 crore for the quarter ended December 2017, mainly on account of lower expenses. The company had posted a net profit of Rs 62.4 crore during the same period of the previous fiscal. Revenue from operations for the third quarter stood at Rs 456.5 crore. Mphasis was trading in green on reporting a net profit of Rs 214 crore for the third quarter ended December, an 8.7% increase from the previous three-month period and 7.3% growth from a year earlier.

On the global front, the Asian markets were trading mostly in red. South Korea’s economy unexpectedly shrank in the last quarter as struggling car exporters and industrial production failed to keep up the previous quarter’s dashing pace, posting its worst performance since 2008. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 36,000 and 11,050 levels respectively. The market breadth on BSE was positive in the ratio of 1273:1083, while 138 scrips remained unchanged.

The BSE Sensex is currently trading at 36088.93, down by 72.71 points or 0.20% after trading in a range of 36050.44 and 36247.02. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were Metal up by 1.35%, Capital Goods up by 0.89%, Basic Materials up by 0.75%, Industrials up by 0.54% and Utilities up by 0.37%, while IT down by 0.96%, TECK down by 0.79%, PSU down by 0.54%, FMCG down by 0.22% and Energy down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.45%, Larsen & Toubro up by 1.26%, Coal India up by 0.90%, NTPC up by 0.72% and Sun Pharma up by 0.67%.

On the flip side, SBI down by 2.78%, Infosys down by 1.32%, Yes Bank down by 1.32%, TCS down by 1.31% and Adani Ports & Special Economic Zone down by 0.76% were the top losers.

Meanwhile, the Department of Industrial Policy and Promotion (DIPP) has notified relaxation of foreign direct investment (FDI) norms in several sectors, including single brand retail, non-banking financial companies and construction. Recently, the Union government had allowed overseas investors to make 100 percent FDI in single-brand retail trading and construction development under the automatic route. Besides, it also approved changes in FDI norms to allow foreign airlines to own 49 percent in Air India under the automatic route. 

The DIPP, under the commerce and industry ministry, has stated that allowing 100 percent FDI in single brand retail is aimed at attracting investments in production and marketing, improving the availability of such goods for the consumer, encouraging increased sourcing of goods from India. Besides, it clarified that real estate broking service does not amount to real estate business thus addressing issues faced by such firms. It is therefore eligible for 100 percent FDI under the automatic route. It also noted that foreign investing companies registered as non-banking financial companies (NBFC) with the RBI, being overall regulated, would be under 100 percent automatic route.  However, it said that investment by Core Investing Companies (CIC) will have to follow government approval route besides taking permission from the banking sector regulator RBI.

The DIPP has also notified the liberalization of the policy in power exchanges, an online platform where electricity is traded. Previously, the policy provided for 49 percent FDI under automatic route in power exchanges. However, foreign investors’ purchases were restricted to the secondary market only. It has now been decided to do away with this restriction, thereby allowing FIIs/FPIs to invest in power exchanges through primary market as well.

The CNX Nifty is currently trading at 11072.35, down by 13.65 points or 0.12% after trading in a range of 11059.90 and 11095.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.59%, Hindalco up by 1.64%, Bharti Infratel up by 1.43%, Cipla up by 1.41% and ICICI Bank up by 1.40%.

On the flip side, SBI down by 2.86%, HCL Tech down by 1.51%, UPL down by 1.40%, Infosys down by 1.37% and TCS down by 1.28% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 267.1 points or 1.12% to 23,673.68, Hang Seng decreased 102.69 points or 0.31% to 32,856.00, Jakarta Composite decreased 15.64 points or 0.24% to 6,599.85, Taiwan Weighted decreased 6.36 points or 0.06% to 11,145.80 and Shanghai Composite decreased 5.07 points or 0.14% to 3,554.40.

On the other hand, FTSE Bursa Malaysia KLCI increased 3.61 points or 0.2% to 1,840.65 and KOSPI Index increased 18.9 points or 0.74% to 2,556.90.