Lackluster trade continues on Dalal Street

Key Indian benchmarks continued their lackluster trade in late morning session, tracking weak trend of other Asian markets. Lower broader markets along with heavy selling in Capital Goods, Consumer Disc and IT stocks, also weighed on the sentiments. Some anxiety spread among the investors with NITI Aayog Vice Chairman Rajiv Kumar’s statement that the government may settle for slightly higher fiscal deficit in 2018-19 as well. The government aims to restrain the fiscal deficit for 2017-18 to 3.2 per cent of the GDP and 3 per cent in 2018-19. The market participants remained on sidelines ahead of upcoming Union Budget 2018-19, to be announced on February 1, 2018. Traders failed to take any relief with the Chairman of the Economic Advisory Council Dr Bibek Debroy’s statement that the Economic Survey reflects the government's commitment to both growth and development. He further noted that the emphasis on women's empowerment is a welcome step.

On the global front, Asian markets were trading in red, following the weak cues overnight from Wall Street, while the dollar held onto overnight gains as US bond yields rose to its highest levels in nearly four years amid concerns over higher inflation. Back home, in scrip specific development, GAIL (India) traded higher after the company commenced construction of pipeline work in West Bengal on fast track basis.

The BSE Sensex is currently trading at 36090.52, down by 192.73 points or 0.53% after trading in a range of 36034.40 and 36291.82. 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 0.29%, while Small cap index was down by 0.78%.

The top gaining sectoral indices on the BSE were Telecom up by 0.94%, Oil & Gas up by 0.84%, PSU up by 0.77%, Utilities up by 0.46% and Power up by 0.40%, while Capital Goods down by 0.74%, Consumer Disc down by 0.71%, IT down by 0.68%, Basic Materials down by 0.67% and Industrials down by 0.61% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.80%, SBI up by 1.67%, ONGC up by 0.63%, Hero MotoCorp up by 0.63% and Tata Motors up by 0.63%. On the flip side, Asian Paints down by 2.40%, Wipro down by 1.94%, Kotak Mahindra Bank down by 1.57%, Axis Bank down by 1.56% and Dr. Reddy’s Lab down by 1.39% were the top losers.

Meanwhile, as the government has done well on disinvestment and non-tax revenue collections, the NITI Aayog Vice Chairman Rajiv Kumar has said that the fiscal deficit target for 2017-18 may see only a slight slippage. He also said that the glide path to reduce fiscal deficit could change and government may settle for slightly higher fiscal deficit in 2018-19 as well. Besides, the government is aiming to restrain the fiscal deficit for 2017-18 to 3.2% of the Gross Domestic Product (GDP), and 3% in 2018-19.

Kumar said “There could be a fiscal deficit slippage in 2017-18 but not much, I can’t see it slipping very much because government has done lot on disinvestment front and on non tax revenue front”. He added that the glide path could change. Therefore, they might expect slightly higher fiscal deficit target for 2018-19 as well.

NITI Aayog Vice Chairman further said that going forward, tax revenue will be optimistic. Talking about the oil prices, he said “I am afraid, we will have to take the pain. Listing of a very large oil company may be one of the reasons of high oil prices. Also, government is working to reduce our dependence on petroleum product”.

The CNX Nifty is currently trading at 11063.45, down by 66.95 points or 0.60% after trading in a range of 11042.10 and 11121.10. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.18%, HPCL up by 1.96%, Bharti Airtel up by 1.74%, GAIL India up by 1.51% and SBI up by 1.38%. On the flip side, Asian Paints down by 2.17%, Eicher Motors down by 2.14%, Kotak Mahindra Bank down by 2.11%, Bharti Infratel down by 1.81% and HDFC down by 1.68% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 347.92 points or 1.06% to 32,618.97, Nikkei 225 decreased 345.27 points or 1.46% to 23,284.07, Taiwan Weighted decreased 145.03 points or 1.29% to 11,076.78, Jakarta Composite decreased 106.2 points or 1.59% to 6,574.42, KOSPI Index decreased 27.82 points or 1.07% to 2,570.37, Shanghai Composite decreased 21 points or 0.6% to 3,502.00 and FTSE Bursa Malaysia KLCI decreased 2.84 points or 0.15% to 1,867.68.