Benchmarks pare gains to trade flat in morning deals

Indian equity benchmark have pared all of their initial gains and turned flat in early deals on Wednesday, as renewed selling by foreign investors on worries over the Rs 11,300 crore fraud case at Punjab National Bank (PNB), concerns over the government’s fiscal position and chances of another interest rate hike from the Federal Reserve in March may keep underlying sentiment cautious. However, traders getting some solace with report that the Reserve Bank of India (RBI) has set up a five-member expert panel to look into the reasons for high divergence observed in asset classification and provisioning by banks. Meanwhile, Finance minister Arun Jaitley has come down heavily on public sector banks for not safeguarding taxpayers’ money spent to keep them afloat. He warned that the government would explore all options to punish the ‘cheats’ responsible for bank frauds.

On the global front, Asian markets were trading mostly in green at this point of time, despite the softer lead stateside. The Japanese stock market recovered after a weak start and is modestly higher on Wednesday, with a weaker yen lifting exporters’ shares. The US markets ended lower on Tuesday as traders digested recent volatility and expressed some uncertainty about the near-term outlook for the markets.

Back home, software related stocks edged higher on report that India’s software services sector will see revenue growth of 7-9 percent in constant currency terms in the fiscal year to March 2019. The forecast, which was put out at the annual summit of the National Association of Software and Services Companies (NASSCOM), is in line with the 7.8 percent revenue growth it expects in the six months to the end of March 2018. In scrip specific development, IRB Infrastructure surged on commencing toll collection at Kishangarh-Gulabpura Tollway and Dilip Buildcon gained on emerging lowest bidder for project worth Rs 380.07 crore.

The BSE Sensex is currently trading at 33738.93, up by 35.34 points or 0.10% after trading in a range of 33738.73 and 33911.36. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index down by 0.17%, while Small cap index was up by 0.11%.

The top gaining sectoral index on the BSE were IT up by 1.21%, TECK up by 1.00%, FMCG up by 0.28%, Telecom up by 0.20% and Realty was up by 0.13%, while Metal down by 1.40%, Oil & Gas down by 0.64%, PSU down by 0.50%, Basic Materials down by 0.46% and Auto was down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.03%, Infosys up by 1.02%, Dr. Reddys Lab up by 1.00%, ITC up by 0.80% and HDFC was up by 0.72%. On the flip side, Coal India down by 1.53%, Sun Pharma down by 1.24%, Tata Steel down by 0.95%, Axis Bank down by 0.91% and Adani Ports was down by 0.90% were the top losers.

Meanwhile, the National Association of Software and Solutions Companies (NASSCOM) has forecasted India’s Information Technology (IT) industry will grow at 7-9 percent in the next financial year 2018-19 as against 7.8 percent in 2017-18, despite of multiple global headwinds and uncertainties in the software services space. Noting that the next year will be better for the technology industry at large, it has projected a flat growth revenue scenario for the second year in a row. According to the industry body, the export revenues will grow to $135-137 billion from the $126 billion estimated for the current year.

Nasscom president R Chandrashekhar has said that the domestic revenue may grow at slightly higher pitch of 10-12 percent, while exports may lag in FY19. He added that the industry may hire 100,000 new hands in FY19, which again 50 percent lower than what it had projected for this year. For the current fiscal, he said that the industry may register lower-than-projected 7.8 percent growth, and may touch $167 billion in revenue size during the year in terms of exports and 10 percent in domestic revenue.

Expressing optimism, Chandrashekhar said that the mood is upbeat and the trend is positive, which should translate into better business opportunities. Software services body had forecast export revenue growth of 7-8 percent in FY18, compared to 7.6 percent in FY17. In FY16, exports earnings rose just 7.6 percent, while domestic revenue was around 10-11 percent. Even on the hiring front, the outlook is dim with a 50 percent likely slip from 130,000-150,000 new jobs projected for FY18.

The CNX Nifty is currently trading at 10355.05, down by 5.35 points or 0.05% after trading in a range of 10349.60 and 10426.10. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.07%, Tech Mahindra up by 2.03%, Eicher Motors up by 1.07%, TCS up by 1.02% and Dr. Reddys Lab was up by 0.96%. On the flip side, Hindalco down by 3.34%, BPCL down by 2.37%, Bajaj Finance down by 2.11%, Vedanta down by 1.89% and Coal India was down by 1.58% were the top losers.

Asian market were trading mostly in green; KOSPI Index inched up 2.96 points or 0.12% to 2,418.08, FTSE Bursa Malaysia KLCI gained 3.37 points or 0.18% to 1,859.36, Nikkei 225 increased 85.47 points or 0.39% to 22,010.57, Taiwan Weighted soared 271.39 points or 2.6% to 10,692.48 and Hang Seng was up by 279.76 points or 0.91% to 31,153.39. On the flip side Jakarta Composite shed 17.94 points or 0.27% to 6,644.94.