Key indices continue to trade lower in afternoon deals

Indian equity benchmarks continued their weak trade in early afternoon session, as traders taking cautious bet ahead of the Union budget, which is to be presented on 1 February. Investors overlooked Moody’s statement that the recently introduced goods and services tax (GST) mechanism is still a work in progress that will ultimately result in formalisation of economy. Besides, mixed trend at other Asian bourses and cautions ahead of earnings from some more blue-chip companies also influenced the sentiments. Sentiments also remained downbeat with 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’. In scrip specific development, Suven Life Sciences was up by over half a percent after securing one product patent from Aripo and one product patent from South Korea corresponding to the New Chemical Entities (NCEs).

On the global front, Asian markets were trading mixed, after Wall Street recorded its biggest decline since August. Back home, the BSE Sensex is currently trading at 35907.34, down by 126.39 points or 0.35% after trading in a range of 35889.92 and 36047.67. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.03%, while Small cap index was down by 0.43%.

The top gaining sectoral indices on the BSE were Realty up by 0.85%, Telecom up by 0.62%, Energy up by 0.40% and Oil & Gas up by 0.13%, while Healthcare down by 1.29%, Consumer Durables down by 1.25%, Metal down by 0.99%, Capital Goods down by 0.90% and Basic Materials down by 0.64% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.52%, Reliance Industries up by 1.13%, Bharti Airtel up by 0.89%, Asian Paints up by 0.76% and Hero MotoCorp up by 0.67%. On the flip side, Dr. Reddy’s Lab down by 3.85%, Tata Steel down by 3.03%, Sun Pharma down by 2.25%, Coal India down by 2.21% and ICICI Bank down by 2.13% were the top losers.

Meanwhile, the Chief Economic Adviser (CEA) Arvind Subramanian has argued that the forecasted India’s Gross Domestic Product (GDP) growth rate of 7 to 7.5 percent for the next fiscal year starting April 1, 2018, in the Economic Survey report 2017-18 is based on certain assumptions made with regards to crude oil prices . He noted that the growth forecasts could fluctuate in either direction, based on oil prices during the year.

Subramanian has stated that this year, oil prices went up significantly and affected consumption and government finances and also held back real economic activity. He pointed out that if this continues, economic growth will drop, and inflation will spike in the coming quarters. Adding further, he claimed that the current story of the Indian economy is one of ‘revival and risks’, and noted that market trading was symbolic of this. He also mentioned that major achievements this year gone are the launch of the Goods and Services Tax (GST) regime, decisive tackling of Twin Balance Sheet (TBS) challenge and validation of achievements and recognition of medium-term prospects.

Talking about the growing gender gap in the country, CEA said that there is a necessity for a mindset change regarding the preference of male over female children. He noted that their research showed that even if there is no selective sex abortion taking place, there still lies a deep preference for male children, which is the result of an age-old mindset. He added that the government has been promoting several schemes such as the 'Beti Bachao, Beti Padhao' scheme.

The CNX Nifty is currently trading at 11017.80, down by 31.85 points or 0.29% after trading in a range of 11010.35 and 11058.50. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.45%, Hindalco up by 2.01%, Kotak Mahindra Bank up by 1.74%, HCL Tech. up by 1.05% and Reliance Industries up by 1.03%. On the flip side, Dr. Reddy’s Lab down by 3.52%, Tata Steel down by 3.05%, Coal India down by 2.32%, Sun Pharma down by 2.26% and UPL down by 2.19% were the top losers.

Asian markets were trading mixed; Taiwan Weighted increased 27.01 points or 0.24% to 11,103.79, Jakarta Composite was up by 47.11 points or 0.72% to 6,622.61 and Hang Seng added 53.52 points or 0.16% to 32,660.81. On the flip side, Nikkei 225 decreased 193.68 points or 0.83% to 23,098.29, Shanghai Composite dipped 14.74 points or 0.42% to 3,473.26 and KOSPI Index was down by 1.28 points or 0.05% to 2,566.46.