Bourses continue sluggish trade post RBI monetary policy outcome

The local equity benchmarks continued their sluggish trade in late afternoon session, after Reserve Bank of India (RBI) kept repo rate unchanged at 6% and Reverse Repo rate was also maintained at 5.75%. Some anxiety spread among the investors, as the Central Bank revised FY18 gross value added (GVA) Growth forecast to 6.6% from 6.7%, while it sees FY19 GVA Growth at 7.2%. Traders were also concerned with BMI Research’s latest report  which has revised India’s fiscal deficit forecast to 3.5% of gross domestic product (GDP) for the fiscal year 2018-2019 (FY19) as against its earlier estimate of 3.3%. It also said that there is room for fiscal slippage as the government seeks to achieve its 7.5% growth target. Besides, continuous selling in Telecom, Banking and TECK stocks along with major industry losers like Bharti Airtel, Wipro and Larsen & Toubro, weighted on the sentiments.  However, the losses were limited with Finance Secretary Hasmukh Adhia’s statement that the import duty hike in 45 items announced in the Budget will earn about Rs 7,000 crore revenue to the government and is mainly intended to give a push to the MSMEs for domestic manufacturing. Moreover, contrasting the larger peers, the broader markets were trading higher, with the notable gains, tracking firm global cues.

On the global front, European markets were trading in green, as markets worldwide attempted to shake off the major volatility seen in recent sessions. Asian markets were also trading in green. Back home, in scrip specific development, HT Media was trading higher after the company received an approval for investment in common shares of betterU Education Corporation (betterU), a Canada-based education technology company with business in developing countries like India, China.

The BSE Sensex is currently trading at 34158.75, down by 37.19 points or 0.11% 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 0.72%, while Small cap index was up by 2.17%.

The top gaining sectoral indices on the BSE were Realty up by 1.82%, Oil & Gas up by 1.56%, Consumer Durables up by 1.44%, PSU up by 1.30% and Energy up by 1.15%, while Telecom down by 0.50%, Capital Goods down by 0.23%, TECK down by 0.13%, IT down by 0.10% and Bankex down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.40%, Coal India up by 2.32%, Dr. Reddy’s Lab up by 1.63%, Tata Motors - DVR up by 1.53% and Tata Motors up by 1.40%. On the flip side, Bharti Airtel down by 1.87%, Wipro down by 1.70%, Larsen & Toubro down by 1.45%, Hindustan Unilever down by 1.26% and HDFC Bank down by 1.18% were the top losers.

Meanwhile, days after release of Union Budget 2018, expressing optimism over the government’s decision to increase customs duty on certain items, Finance Secretary Hasmukh Adhia has said that the government will receive about Rs 7,000 crore revenue, on account of import duty hike in 45 items.

Adhia, however, clarified that import duty hike is not for collection of revenue because the import of these items are not too much and the country is not getting too much of revenue, but at the most, the country will get something like Rs 6,000-7,000 crore due to extra import duty. He also noted that the government has taken this decision to give a push to the MSMEs for domestic manufacturing, as this industry is in a position to make many of these items.

Besides, Finance Secretary mentioned about a phased manufacturing programme in electronic manufacture industry and for which increasingly they will be putting more duty on the final product, then on second level of spare part and third level of spare part. The idea is to encourage assemblers to make more and more components in India.

In the Budget 2018, Finance minister Arun Jaitley proposed an increase in customs duty on a range of products, from fruit juice to mobile phones. He proposed to increase customs duty on mobile phones from 15% to 20%, on some of their parts and accessories to 15% and on certain parts of TVs to 15%. This measure will also promote creation of more jobs in the country.

The CNX Nifty is currently trading at 10485.80, down by 12.45 points or 0.12% after trading in a range of 10464.80 and 10614.00. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were HPCL up by 5.11%, Aurobindo Pharma up by 2.92%, ONGC up by 2.51%, Coal India up by 2.34% and BPCL up by 1.84%. On the flip side, Ambuja Cement down by 2.08%, Vedanta down by 2.05%, Bharti Airtel down by 2.02%, HCL Tech. down by 1.69% and Wipro down by 1.68% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 24.24 points or 1.34% to 1,836.69, Nikkei 225 increased 35.13 points or 0.16% to 21,645.37, Jakarta Composite increased 51.82 points or 0.8% to 6,530.36 and Taiwan Weighted increased 147.54 points or 1.42% to 10,551.54. On the flip side, Hang Seng decreased 272.22 points or 0.89% to 30,323.20, Shanghai Composite decreased 61.39 points or 1.82% to 3,309.26 and KOSPI Index decreased 56.75 points or 2.31% to 2,396.56.

All European markets were trading in green; France’s CAC increased 15.08 points or 0.29% to 5,176.89, Germany’s DAX increased 38.82 points or 0.31% to 12,431.48 and UK’s FTSE 100 increased 40 points or 0.56% to 7,181.40.