Bears tighten grip on Dalal street; Sensex down by around 180 points

Bears tightened their grip on the Dalal Street in late afternoon session, with Sensex and Nifty falling by around 180 and 70 points, respectively, amid weak opening in European markets. Major industry losers such as Dr. Reddy’s Lab, Kotak Mahindra Bank and Asian Paints contributed to the losses, while Consumer Durables declined the most among other sectoral indices, with losses of more than a percent. In line with the larger peers, the broader markets also remained under pressure in late noon deals, tracking lackluster cues from other Asian markets. Traders booked profit in recent outperformers ahead of the Union Budget which is to be unveiled on Thursday. Sentiments remained downbeat 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 percent of the GDP and 3 percent in 2018-19. The market participants took note of Chief Economic Adviser Arvind Subramanian’s statement that elevated stock prices are a matter of concern and could correct sharply if they are not backed by growth, requiring ‘heightened vigilance’.

On the global front, European markets were trading in red, as investors monitored the release of fresh economic data and corporate earnings. Asian markets were also trading in red. Back home, in scrip specific development, KPIT Technologies traded jubilantly after the company received its board’s approval for amalgamation of Birlasoft with itself, while engineering business of the company will be demerged.

The BSE Sensex is currently trading at 36103.86, down by 179.39 points or 0.49% after trading in a range of 36014.32 and 36291.82. There were 9 stocks advancing against 21 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.60%, while Small cap index was down by 0.95%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.46%, Utilities up by 0.36%, PSU up by 0.36%, Power up by 0.30% and Telecom up by 0.09%, while Consumer Durables down by 1.26%, Basic Materials down by 1.11%, Metal down by 0.96%, IT down by 0.89% and TECK down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.12%, Bharti Airtel up by 0.87%, SBI up by 0.82%, Sun Pharma up by 0.78% and Power Grid Corporation up by 0.52%. On the flip side, Dr. Reddy’s Lab down by 2.32%, Kotak Mahindra Bank down by 2.11%, Asian Paints down by 2.07%, Wipro down by 1.84% and Axis Bank down by 1.72% were the top losers.

Meanwhile, endorsing the optimistic GDP growth outlook highlighted in the economic survey, Bibek Debroy chairman of the Economic Advisory Council to the Prime Minister (EAC-PM) has said that the survey is a reflection of government's commitment to growth and development. He also praised the government’s emphasis on women's empowerment, terming it as a ‘welcome step’.

As per the economic survey estimates, FY18 GDP growth will be at 6.75% and FY19 GDP growth will be between 7 and 7.5%, but Debroy expects that the real GDP growth will be close to 7.5% in FY19 rather than 7%. Besides, he said that the government is committed to fiscal consolidation and prudent public expenditure and suggested that public expenditure can also financed through off-Budget instruments. He noted that it is rightly mentioned that growth drivers will have to fundamentally emerge through exports, private investments and consumption.

He further said that the survey is also optimistic in its tone, due to government's commitment to carry forward structural reforms like Goods and Services Tax (GST), deregulation measures, bank re-capitalization and resolution through the Insolvency and Bankruptcy Code (IBC) process. He also said the survey has highlighted that demonetisation was only a blip that did not last beyond mid-2017.

The CNX Nifty is currently trading at 11060.95, down by 69.45 points or 0.62% after trading in a range of 11036.05 and 11121.10. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.06%, GAIL India up by 1.60%, HPCL up by 1.44%, Hero MotoCorp up by 0.97% and Bharti Airtel up by 0.94%. On the flip side, Eicher Motors down by 2.78%, Dr. Reddy’s Lab down by 2.55%, Bharti Infratel down by 2.32%, Kotak Mahindra Bank down by 2.30% and Asian Paints down by 1.93% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 359.6 points or 1.09% to 32,607.29, Nikkei 225 decreased 337.37 points or 1.43% to 23,291.97, Taiwan Weighted decreased 145.03 points or 1.29% to 11,076.78, Jakarta Composite decreased 106.02 points or 1.59% to 6,574.60, Shanghai Composite decreased 34.99 points or 0.99% to 3,488.01, KOSPI Index decreased 30.45 points or 1.17% to 2,567.74 and FTSE Bursa Malaysia KLCI decreased 2.9 points or 0.16% to 1,867.62.

All European markets were trading in red; Germany’s DAX decreased 62.98 points or 0.47% to 13,261.50, UK’s FTSE 100 decreased 26.11 points or 0.34% to 7,645.42 and France’s CAC decreased 15.41 points or 0.28% to 5,506.18.