Bourses remain under pressure; Consumer Durables stocks fall most

The local equity benchmarks remained under pressure in late afternoon session, with Sensex declining by almost 200 points, despite higher opening in European markets. The lackluster sectoral indices like Consumer Durables, Healthcare and FMCG along with major industry losers such as Dr. Reddy’s Lab, Tata Steel and Sun Pharma, weighed on the sentiments. The markets continued their southward journey in late noon deals, tracking subdued cues from other Asian equity markets and due to a further fall in the broader indices. Investors remained cautious ahead of the Union Budget, to be presented tomorrow. Besides, 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’, also weighed on the sentiments. Meanwhile, Commerce and Industry Minister Suresh Prabhu will hold consultations with industry representatives next month on the proposed industrial policy. The first meeting is scheduled on February 2 in Guwahati and the second on February 9.

On the global front, European markets were trading mostly in green, as investors awaited the release of euro zone inflation data due later in the day, amid fresh corporate earnings reports. However, Asian markets were trading mixed. Back home, in scrip specific development, Suzlon Energy traded higher after the company signed Share Purchase Agreement (SPA) with Shruti Power Projects (wholly owned subsidiary of ReNew Power Ventures (ReNew Power)) for sale of its stake in Rajat Renewables and Kanak Renewables (collectively referred to as the SPVs), subsidiaries of the company.

The BSE Sensex is currently trading at 35838.67, down by 195.06 points or 0.54% after trading in a range of 35818.41 and 36047.67. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.67%, while Small cap index was down by 1.14%.

The few gaining sectoral indices on the BSE were Energy up by 0.38%, Telecom up by 0.14% and Oil & Gas up by 0.07%, while Consumer Durables down by 1.75%, Healthcare down by 1.72%, FMCG down by 1.28%, Metal down by 1.27% and Consumer Disc down by 1.26% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.10%, Indusind Bank up by 0.90%, Kotak Mahindra Bank up by 0.88%, Tata Motors up by 0.86% and HDFC up by 0.67%. On the flip side, Dr. Reddy’s Lab down by 4.13%, Tata Steel down by 4.04%, Sun Pharma down by 2.09%, Coal India down by 1.86% and ITC down by 1.71% were the top losers.

Meanwhile, expressing optimism over the governments’ significant move of Goods and Services tax (GST)  implementation in the country, global credit rating agency, Moody's Investors Service’s Vice-President (Sovereign Risk Group) William Foster has said that recently introduced new tax regime is still a work in progress and expected to stabilise in the next few quarters. Foster noted that this move will help in formalisation of Indian economy.

Moody's Vice-President also praised the Centre’s move to recapitalise public sector banks and expressed need of more such reforms in the country. He further noted that recapitalization was a necessary step to help banks and the government has provided necessary capital to the public sector banks to take the write down. On the upcoming union budget, he said that the government’s focus on spending towards capital formation will help strengthen the credit growth in economy.

Besides, the ratings agency is eyeing government’s intended use of funds and expecting that the borrowing will pay off if funds are allocated to the infrastructure spending. William Foster, however, pointed that targeting expenses on anticipated revenue is difficult. Besides, the rating agency said that oil prices will hover in range of $40-60 bbl in medium term as high oil production in US will put down prices.

The CNX Nifty is currently trading at 10991.10, down by 58.55 points or 0.53% after trading in a range of 10979.30 and 11058.50. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.05%, Eicher Motors up by 1.98%, Hindalco up by 1.32%, Kotak Mahindra Bank up by 1.11% and Reliance Industries up by 1.10%. On the flip side, Tata Steel down by 4.12%, Dr. Reddy’s Lab down by 3.92%, UPL down by 2.48%, Cipla down by 2.29% and Sun Pharma down by 2.23% were the top losers.

Asian markets were trading mixed; Taiwan Weighted increased 27.01 points or 0.24% to 11,103.79, Jakarta Composite increased 45.25 points or 0.69% to 6,620.74 and Hang Seng increased 279.98 points or 0.86% to 32,887.27. On the flip side, Nikkei 225 decreased 193.68 points or 0.83% to 23,098.29, Shanghai Composite decreased 7.18 points or 0.21% to 3,480.83 and KOSPI Index decreased 1.28 points or 0.05% to 2,566.46.

European markets were trading mostly in green; France’s CAC increased 17.27 points or 0.32% to 5,491.05 and Germany’s DAX increased 46.29 points or 0.35% to 13,244.00. On the flip side, UK’s FTSE 100 decreased 0.13 points to 7,587.85.