Lackluster trade persists on Dalal Street

Key Indian benchmarks continued to trade on a lackluster note in late morning session, with Sensex losing almost 100 points, on the back of selling in PSU, IT and TECK stocks. Market participants lacked buying confidence amid mixed trading on Asian bourses. Sentiments remained concerned ahead of January F&O expiry later today. Some concerns also came with the report that India is among the bottom five countries on the Environmental Performance Index (EPI) 2018, plummeting 36 places from 141 in 2016. Adding some anxiety, the country’s gems and jewellery exports contracted by 4.65 per cent to about $25 billion during April-December this fiscal owing to demand slowdown in major markets, including the US. Besides, in line with larger peers, the broader indices were too trading on a lackluster note. However, the downside remained capped with Niti Aayog CEO Amitabh Kant’s statement that some states have improved in terms of ease of doing business after they were ranked very low on an index, as he credited the change to ‘name and shame’.  Separately, the private report stated that waning effects from the GST impact will help push the Indian GDP growth to 7 per cent in FY19.

On the global front, Asian markets were trading mixed, amid concerns over trade wars, while the US dollar fell following Treasury Secretary Steven Mnuchin's comments that a weaker greenback would be good for US trade. Meanwhile, higher commodity prices lifted resources stocks. Back home, in scrip specific development, Orient Green Power Company traded higher after the company received an approval to issue Equity Shares on a preferential basis to SREI Infrastructure Finance, the entity belonging to the Non-Promoter category for an amount not exceeding Rs 13.71 crore on such price as determined in accordance with the provisions of Chapter VII of SEBI ICDR Regulations.

The BSE Sensex is currently trading at 36065.14, down by 96.50 points or 0.27% after trading in a range of 36017.48 and 36247.02. 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 0.18%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Metal up by 0.82%, Capital Goods up by 0.62%, Basic Materials up by 0.35%, Industrials up by 0.28% and Power up by 0.14%, while PSU down by 1.10%, IT down by 0.79%, TECK down by 0.75%, Telecom down by 0.46% and Energy down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.23%, NTPC up by 0.81%, Axis Bank up by 0.80%, Kotak Mahindra Bank up by 0.80% and Larsen & Toubro up by 0.77%. On the flip side, SBI down by 4.10%, Yes Bank down by 1.29%, Bharti Airtel down by 1.26%, Infosys down by 1.22% and TCS down by 1.05% were the top losers.

Meanwhile, the Finance Ministry has said that the additional expenditure of Rs 80,000 crore towards recapitalisation of public sector banks (PSBs) through bonds, as part of Rs 2.11 trillion capital support over two years, will not have an impact on fiscal deficit as they will be cash neutral. Besides, Economic Affairs Secretary S C Garg has noted that these bonds will have 10-15 year tenure and will not have statutory liquidity ratio (SLR) status.

Garg has stated that there is no fiscal impact of bond issuance to banks. He also said that these will be swap deals and cash neutral, and there is not going to be a public issue. He also pointed out that the additional expenditure of Rs 80,000 crore towards bank recapitalisation through issue of government securities will be matched by additional receipts on issues of securities to the banks and will not entail any cash outgo. Talking about the pricing, he said that it would be three months average price of government securities plus the spread.

Earlier, in October, Finance Minister Arun Jaitley had announced an unprecedented Rs 2.11 lakh crore, 2-year road map to strengthen PSBs, reeling under high non-performing assets (NPAs) or bad loans. Their NPAs have increased from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017. The plan included floating re-capitalisation bonds of Rs 1.35 lakh crore and raising Rs 58,000 crore from the market by diluting government's stake. He had also announced that there would be front loading of re-capitalisation bonds.

The CNX Nifty is currently trading at 11063.80, down by 22.20 points or 0.20% after trading in a range of 11047.60 and 11095.60. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 2.91%, Vedanta up by 1.87%, Bharti Infratel up by 1.64%, Coal India up by 1.29% and Ultratech Cement up by 1.17%. On the flip side, SBI down by 4.15%, HCL Tech. down by 2.02%, UPL down by 1.64%, Bharti Airtel down by 1.29% and Yes Bank down by 1.27% were the top losers.

Asian markets were trading mixed; Nikkei 225 decreased 253.37 points or 1.06% to 23,687.41, Hang Seng decreased 53.58 points or 0.16% to 32,905.11 and Jakarta Composite decreased 15.48 points or 0.23% to 6,600.01.

On the flip side, Shanghai Composite increased 1.4 points or 0.04% to 3,560.86, FTSE Bursa Malaysia KLCI increased 3.61 points or 0.2% to 1,840.65, Taiwan Weighted increased 13.79 points or 0.12% to 11,165.95 and KOSPI Index increased 24.26 points or 0.96% to 2,562.26.