Key indices continue lackluster trade in noon deals

Indian equity benchmarks continued their lackluster trade in early afternoon session, as investors remained on sidelines ahead of the Reserve Bank of India's sixth bi-monthly monetary policy statement for 2017-18. Sentiments remained downbeat with report that India’s fiscal deficit is expected to come in at 3.5 percent of GDP in financial year 2018-2019, as policymakers seek to promote economic growth by reducing the pace of fiscal consolidation. According to the BMI Research report, a unit of Fitch Group, there is room for fiscal slippage as the government seeks to achieve its 7.5 percent growth target. However, the losses got restricted with report that as many as 67 foreign direct investment proposals (FDI) worth Rs 117 billion were approved during the first nine months of the ongoing financial year. Meanwhile, the rupee rebounded by 13 paise to 64.12 against the US currency in early deals following sustained bouts of dollar selling by banks and exporters. In scrip specific development, Tata Power was up by over two percent with arm implementing GPS mapping technology to map its underground cables along with RFID marker installation on cable splices for speedier fault location and resolution.

On the global front, Asian markets were trading mostly in green, as investor confidence returned after the previous day’s battering, with Wall Street providing a positive lead.  Back home, the BSE Sensex is currently trading at 34105.27, down by 90.67 points or 0.27% after trading in a range of 34059.59 and 34666.33. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.49%, while Small cap index was up by 1.55%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.49%, Realty up by 1.42%, Consumer Durables up by 1.07%, Energy up by 0.99% and Industrials up by 0.73%, while Power down by 0.46%, Bankex down by 0.35%, Telecom down by 0.17%, TECK down by 0.16% and IT down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.27%, ONGC up by 1.75%, Tata Motors up by 1.59%, Tata Motors - DVR up by 1.10% and Dr. Reddy’s Lab up by 1.02%. On the flip side, NTPC down by 3.57%, Wipro down by 1.97%, Bharti Airtel down by 1.47%, HDFC Bank down by 1.45% and Larsen & Toubro down by 1.37% were the top losers.

Meanwhile, with policymakers seeking to promote economic growth by reducing the pace of fiscal consolidation, the Fitch group company, BMI Research in its latest report has revised India’s fiscal deficit forecast to 3.5 percent of gross domestic product (GDP) for the fiscal year 2018-2019 (FY19) as against its earlier estimate of 3.3 percent. It also said that there is room for fiscal slippage as the government seeks to achieve its 7.5 percent growth target.

According to the report, Union Budget for FY19 (April-March) that was presented by Finance Minister Arun Jaitley on February 01, seeks to support growth and job creation at the expense of a slower pace of fiscal consolidation as policymakers aim to achieve a $5 trillion economy by 2025. The report also stated that while the Indian government loosened its central fiscal deficit target for FY19, it did not abandon its fiscal consolidation plans completely, but instead pushed its 3 percent fiscal deficit target back by a year to FY20.

Besides, the government outlined a fiscal deficit target of 3.3 percent of GDP in FY19 as against a revised estimate of 3.5 percent in FY18, indicating some fiscal consolidation, albeit at a slower pace than that recommended under the Fiscal Responsibility and Budget Management (FRBM) framework. Moreover, the FY19 budget saw a further increase in overall expenditure, with the biggest allocation going to transport, rural development, agriculture, education, and healthcare, as the key focus is supporting long term growth.

The CNX Nifty is currently trading at 10497.15, down by 1.10 points or 0.01% after trading in a range of 10464.80 and 10614.00. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were HPCL up by 5.05%, Aurobindo Pharma up by 2.59%, Coal India up by 2.27%, ONGC up by 2.18% and Hindalco up by 2.09%. On the flip side, NTPC down by 3.33%, HCL Tech. down by 2.57%, Wipro down by 2.14%, Vedanta down by 1.63% and Bharti Airtel down by 1.45% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 25.48 points or 1.41% to 1,837.93, Nikkei 225 increased 35.13 points or 0.16% to 21,645.37, Jakarta Composite increased 71.94 points or 1.11% to 6,550.48 and Taiwan Weighted increased 147.54 points or 1.42% to 10,551.54.

On the flip side, Hang Seng decreased 165.72 points or 0.54% to 30,429.70, KOSPI Index decreased 56.75 points or 2.31% to 2,396.56 and Shanghai Composite decreased 55.9 points or 1.66% to 3,314.75.