Benchmarks trade in green; FM presents Budget 2018-19

Indian equity benchmarks continued their firm trade in morning session on account of buying in front line blue chip counters. The rupee opened down against the dollar. Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 136.63 crore yesterday. Domestic Institutional Investors (DIIs) bought equities worth a net Rs 1,294.66 crore. To keep investors’ confidence, Modi’s government will need to be seen containing the fiscal deficit, while also increasing spending in key areas of the slowing economy. The street will focus on how much India widens its fiscal deficit beyond the 3 percent of gross domestic product projected for 2018/19. However, the imposition of long-term capital gain tax (LTCG) would depress sentiment on the Indian market.

The sentiments remained upbeat after the Central Statistics Office revised the Gross Domestic Product (GDP) growth rate for 2015-16 to 8.2% from the earlier estimates of 8% and kept the 2016-17 growth unchanged at 7.1%. The real GDP or GDP at constant (2011-12) prices for the years 2016-17 and 2015-16 stands at Rs 121.96 lakh crore and Rs 113.86 lakh crore respectively, showing growth of 7.1% during 2016-17 and 8.2% during 2015-16. The street shrugged off report that growth in India’s infrastructure sector slowed to a five-month low of 4% in December on the back of declining steel and crude oil output. Core sector growth was 7.4% in November and 5.6% in December 2016. Investors took note that consumers are continuing to hold back on discretionary spending with categories such as television, home appliances, fashion, lifestyle and apparel posting poor sales in the October-December quarter, with no recovery in sight in January as well, despite almost all brands and retailers running end-of-season and Republic Day sales.

Traders were seen piling up position in Capital Goods, Industrials and Auto stocks, while selling was witnessed in Metal, Consumer Durables and Telecom sector stocks. In scrip specific development, Larsen & Toubro was trading in green after the fiscal third-quarter earnings reflected the revival of growth across the broader economy, with robust home demand helping India’s biggest engineering company offset the impact of muted overseas business and post 53 per cent gain in net income.

On the global front, the Asian markets were trading mostly in green. Growth in China’s manufacturing sector remained elevated in January, as new business led factories to raise output at the start of the year. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 36,100 and 11,050 levels respectively. The market breadth on BSE was positive in the ratio of 1433:880, while 105 scrips remained unchanged.

The BSE Sensex is currently trading at 36120.76, up by 155.74 points or 0.43% after trading in a range of 36021.88 and 36226.97. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.23%, while Small cap index was up by 0.52%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.98%, Industrials up by 1.05%, Auto up by 0.60%, IT up by 0.57% and Realty up by 0.50%, while Metal down by 1.23%, Consumer Durables down by 1.07%, Telecom down by 0.66%, Healthcare down by 0.37% and Utilities down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 3.03%, Mahindra & Mahindra up by 2.02%, TCS up by 1.84%, IndusInd Bank up by 1.29% and Kotak Mahindra Bank up by 1.02%.

On the flip side, Dr. Reddy’s Lab down by 2.16%, Tata Steel down by 1.89%, Coal India down by 1.51%, NTPC down by 1.09% and Sun Pharma down by 1.02% were the top losers.

Meanwhile, India’s core sector output grew at a slower pace of 4.0% in December 2017, from 7.4% in November 2017, on the back of declining coal and crude oil output. According to the data released by the ministry of Commerce and Industry showed the combined Index of eight core industries stood at 129.1 in December, 2017, which was 4.0% higher compared to the index of December, 2016. Its cumulative growth during April to December, 2017-18 was 4.0%. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Among eight core sectors, Coal production having 10.33% weight fell 0.1% in December, 2017 over December, 2016, while its cumulative index increased by 1.3% during April to December, 2017-18 over corresponding period of the previous year. Petroleum Refinery production having 28.04% weight jumped 6.6% in December, 2017 over December, 2016 and its cumulative index increased by 3.9% during April to December, 2017-18 over the corresponding period of previous year. Electricity generation having 19.85% weight surged 3.3% in December, 2017 over December, 2016 and its cumulative index rose by 4.9% during April to December, 2017-18 over the corresponding period of previous year.

The Natural Gas production having 6.88% weight advanced 1.0% in December, 2017 over December, 2016 and its cumulative index was up by 4.0% during April to December, 2017-18 over the corresponding period of previous year. Steel production having 17.92% weight rose by 2.6% in December, 2017 over December, 2016 and its cumulative index jumped by 6.7% during April to December, 2017-18 over the corresponding period of previous year.

Crude Oil production having 8.98% weight declined by 2.1% in December, 2017 over December, 2016, and its cumulative index fell by 0.4% during April to December, 2017-18 over the corresponding period of previous year.  Fertilizer production having 2.63% weight increased by 3.0% in December, 2017 over December, 2016, while its cumulative index declined 0.6% during April to December, 2017-18 over the corresponding period of previous year. On the other hand, Cement production having 5.37% weight was up by 19.6% in December, 2017 over December, 2016 and its cumulative index increased by 2.7% during April to December, 2017-18 over the corresponding period of previous year.

The CNX Nifty is currently trading at 11065.05, up by 37.35 points or 0.34% after trading in a range of 11039.50 and 11100.70. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.95%, TCS up by 1.98%, Mahindra & Mahindra up by 1.96%, Eicher Motors up by 1.50% and IndusInd Bank up by 1.35%.

On the flip side, Coal India down by 2.74%, Vedanta down by 2.45%, Bharti Infratel down by 1.99%, Tata Steel down by 1.96% and Dr. Reddy’s Lab down by 1.92% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 7.06 points or 0.28% to 2,573.52, Jakarta Composite increased 38.08 points or 0.58% to 6,643.71, Taiwan Weighted increased 68.5 points or 0.62% to 11,172.29 and Nikkei 225 increased 328.14 points or 1.42% to 23,426.43.

On the other hand, Hang Seng decreased 143.48 points or 0.44% to 32,743.79 and Shanghai Composite decreased 38.63 points or 1.11% to 3,442.21.

Malaysia Stock Exchange was closed on account of National holiday.