Lackluster trade persists on Dalal Street

Key Indian benchmarks continued to trade on a lackluster note in late morning session, with the Sensex and the Nifty losing more than 200 points and 50 points respectively, on the back of selling in Capital Goods, Metal and PSU stocks. Traders’ sentiments were pessimistic, as a joint study by the Confederation of Indian Industry (CII) and the Indian Banks’ Association (IBA) has indicated that the India’s financial conditions index stood at 53.2 for Q4 (January-March) of 2017-18 as against 65.3 in the previous quarter, thereby registering a significant fall of 12.1 points. Some anxiety also came with Ficci survey report stating that glitches in the GSTN portal, cumbersome procedures and documentation as well as the cost of compliance are major areas of concern that need to be addressed to make the Goods and Services Tax (GST) a success. Besides, the sluggish broader indices also contributed to the downtrend. Sentiments also remained downbeat with report that in lieu of the ongoing fraudulent transaction scam involving Punjab National Bank, the ASSOCHAM demanded that the government to reduce its stake in banks to less than 50.

On the global front, Asian markets were trading in green, as sentiments improved gradually from a recent shakeout that stemmed from fears of creeping inflation and higher borrowing costs. Back home, in scrip specific development, Andhra Petrochemicals traded higher after the company resumed operations of its plant located at Visakhapatnam from February 19, 2018.

The BSE Sensex is currently trading at 33798.80, down by 211.96 points or 0.62% after trading in a range of 33789.92 and 34122.96. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.92%, while Small cap index was down by 0.79%.

The top losing sectoral indices on the BSE were Capital Goods down by 1.76%, Metal down by 1.38%, PSU down by 1.35%, Industrials down by 1.10% and Bankex down by 0.97%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Coal India up by 0.92%, Wipro up by 0.52%, Infosys up by 0.44%, NTPC up by 0.22% and Kotak Mahindra Bank up by 0.19%. On the flip side, Tata Steel down by 4.90%, SBI down by 3.07%, Larsen & Toubro down by 2.74%, Adani Ports & SEZ down by 2.06% and Indusind Bank down by 1.82% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has retained a stable outlook on the solar sector and revised wind energy sector’s outlook from negative to stable for the financial year 2018-19. The development comes in the backdrop of favourable environment for wind and solar energy sectors, as bids are being driven by central government agencies and power purchase agreements (PPAs) are becoming favourable to developers in terms of addressing grid curtailment and termination issues. However, it has maintained a negative outlook for the thermal power sector for FY19, owing to lack of visibility for tying up long-term PPAs. 

The ratings agency has stated that development of guarantee funds by states/bidders, incentives to local solar panels manufacturers and exploring of wind-solar hybrid projects and offshore wind projects show a sustaining growth momentum in renewable power. It also said that another favourable development helping the renewable sector is from the bond market. However, it noted that few obstacles such as uncertainties in solar panel costs, unpredictable behaviour of distribution companies (discoms) and operational troubles from wind turbine manufacturers need to be addressed by renewable developers.

According to the report, existing excess power tie-up of discoms and PPAs already signed with central and state sector generating companies for buying power from 40GW under construction thermal plants, prevent the need for purchasing power from private thermal plants under long-term PPAs. Also, it noted that thermal plants remain vulnerable to coal and water availability, thus certainty in these two linkages is hard to come by. For power transmission projects, Ind-Ra has maintained a stable outlook on the back of high project availability and stable receivable period of interstate transmission assets.

The CNX Nifty is currently trading at 10393.95, down by 58.35 points or 0.56% after trading in a range of 10379.05 and 10489.35. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.25%, Bharti Infratel up by 1.01%, Ambuja Cement up by 0.62%, Vedanta up by 0.58% and Ultratech Cement up by 0.42%. On the flip side, Tata Steel down by 5.27%, SBI down by 3.06%, Larsen & Toubro down by 2.66%, Adani Ports & SEZ down by 2.28% and Tech Mahindra down by 2.01% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 16.09 points or 0.88% to 1,854.37, KOSPI Index increased 18.17 points or 0.75% to 2,440.00, Jakarta Composite increased 60.47 points or 0.92% to 6,652.05 and Nikkei 225 increased 411.13 points or 1.89% to 22,131.38.

Stock markets in China, Hong Kong and Taiwan remained closed on account of National holiday.