Bourses erase losses to turn green

The local benchmarks erased all of their losses in late afternoon session to come back in green again, supported by firm opening in European markets. Traders were optimistic, as this year’s Union Budget focused more on rural and agri economy. The government allocated Rs 16,730 crore for rural sanitation, while the government is planning to set up an agricultural market fund with corpus of Rs 2,000 crore. Sentiments were taking support with the report stating that Central Statistics Office has 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%. Besides, the government announced allocation of Rs 600 crore for nutritional support to all tuberculosis patients and allocated Rs 1.38 lakh crore in FY19 for government health & education programmes. However, some anxiety remained among the investors after finance minister Arun Jaitley announced a long-term capital gains tax for investing in equities. Government levies long-term capital gains tax of 10% for over Rs 1 lakh investment.

On the sectoral front, Healthcare stocks rose after the government allocated Rs 1,200 crore for Specialised Health Wellness Centre, while Aviation stocks flew high after the government plans to expand airport capacity by 5 times to 1 billion trips a year and allocated Rs 60 crore to kick start the airport expansion. Besides, Food processing stocks surged after Finance Minister Arun Jaitley announced allocation to food processing will be doubled from Rs 715 crore last year to Rs 1400 crore in 2018-19.

On the global front, European markets were trading in green, after the Fed policy statement acknowledged stronger growth and more confidence that inflation will rise to the 2 percent target. Asian markets were also trading in green. Back home, in scrip specific development, Mahindra & Mahindra gained after the company’s auto sector has sold 52,048 vehicles in January 2018, as against 39,386 vehicles during January 2017, to register a growth of around 32%.

The BSE Sensex is currently trading at 36104.01, up by 138.99 points or 0.39% after trading in a range of 35501.74 and 36256.83. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.21%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were FMCG up by 2.03%, Capital Goods up by 1.07%, Auto up by 0.80%, Industrials up by 0.67% and Basic Materials up by 0.63%, while Consumer Durables down by 1.49%, Energy down by 1.09%, PSU down by 0.64%, Oil & Gas down by 0.60% and Healthcare down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 4.41%, Mahindra & Mahindra up by 3.20%, Indusind Bank up by 2.79%, Yes Bank up by 2.02% and Larsen & Toubro up by 1.80%. On the flip side, Dr. Reddy’s Lab down by 2.38%, Coal India down by 1.69%, ONGC down by 1.65%, Reliance Industries down by 1.37% and Sun Pharma down by 1.29% were the top losers.

Meanwhile, amid slower expansion in output and new orders, India’s manufacturing sector growth lost its momentum in the month of January, after hitting 5 year high in the previous month. As per the survey report, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance- slowed down to 52.4 in January from 54.7 in December. However, the reading signaled an expansion for the sixth consecutive month, remaining above the no-change mark of 50.0.

As per the survey report, thought the output rose to continue expansion rally to six months, rate of expansion was the weakest since October and was below the series average, in the month of January. Following the same trend, new order book volumes too increased for the third consecutive month but it also increased at slowest pace. Besides, job creation increased, owing to improved demand conditions but also at a modest pace, which was the weakest since last October. The report further said that outstanding business continued to rise during January, amid reports of delayed payments but the rate of backlog accumulation eased to a marginal pace.

On the price front, input cost inflation remained marked and broadly similar to December’s eight-month high. However, the report found that intensive competitive conditions restricted the firms to fully pass on higher cost burdens to customers, resulting in marginal output charge inflation. Further, firms increased their purchasing activity in the reported month, on the back of greater output requirements.

The CNX Nifty is currently trading at 11062.55, up by 34.85 points or 0.32% after trading in a range of 10878.80 and 11117.35. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ITC up by 4.29%, Mahindra & Mahindra up by 3.27%, Indusind Bank up by 2.96%, Eicher Motors up by 2.78% and Ambuja Cement up by 2.16%. On the flip side, Aurobindo Pharma down by 2.35%, Dr. Reddy’s Lab down by 2.34%, Lupin down by 2.27%, Coal India down by 2.02% and ONGC down by 1.72% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 2.08 points or 0.08% to 2,568.54, Jakarta Composite increased 11.35 points or 0.17% to 6,616.98, Taiwan Weighted increased 56.46 points or 0.51% to 11,160.25 and Nikkei 225 increased 387.82 points or 1.68% to 23,486.11. On the flip side, Hang Seng decreased 245.18 points or 0.75% to 32,642.09 and Shanghai Composite decreased 33.85 points or 0.97% to 3,446.98.

All European markets were trading in green; UK’s FTSE 100 increased 11.58 points or 0.15% to 7,545.13, France’s CAC increased 31.25 points or 0.57% to 5,513.18 and Germany’s DAX increased 59.99 points or 0.45% to 13,249.47.