Benchmarks enters into negative terrain in morning session

Indian equity benchmarks erased entire gains and entered into negative terrain in morning session on account of selling in frontline blue chip counters. The rupee edged down against the dollar at the open today in the wake of month-end demand for the greenback from banks and importers. Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 1,119.51 crore on Monday. Domestic Institutional Investors (DIIs) bought shares worth a net Rs 1,409.45 crore. The sentiments were dampened as investments in the domestic capital market through Participatory notes (P-notes) plunged to a nearly eight-and-a-half-year low of Rs 1.19 lakh crore in January-end amid stringent norms put in place by regulator SEBI to check misuse. According to SEBI data, the total value of P-note investments in Indian markets - equity, debt, and derivatives - slumped to Rs 1,19,556 crore at January-end from Rs 1,24,810 crore at the end of the preceding month.

Banking stocks witnessed fresh round of selling as there seems no end to woes. Punjab National Bank (PNB) told exchanges late on Monday that the quantum of unauthorized transactions using SWIFT could rise by $204.25 million, or Rs 1,322 crore. The bank had on February 14 disclosed that unauthorized transactions worth $1.8 billion, or Rs 11,300 crore, had been carried out from its Brady House branch. With this, the total amount lost to fraud now stands at about Rs 12,622 crore. Oriental Bank of commerce was trading under pressure as the CBI has booked Delhi-based jeweller for duping the bank to the tune of Rs 390 crore. However, the bank said that the alleged fraud of Rs 389.85 crore by Dwarka Das International will not impact its profitability as the lender has made full provisions for the defaulted amount in its books.

Meanwhile, the street shrugged off the report that India’s economic think-tank, National Council of Applied Economic Research (NCAER) has pegged India’s Gross Domestic Product (GDP) growth at 7.5 percent for the next fiscal year 2018-19 and added that in the current fiscal year (2017-18) Indian economy will grow at 6.7 percent. The figures are in line with the growth projections in current year’s Economic Survey, which said India is likely to clock 7-7.5 percent growth in 2018-19, up from 6.75 percent in the current fiscal.

Traders were seen buying in Telecom, Oil & Gas and Consumer Durables stocks, while selling was witnessed in Realty, Bankex and PSU sectors stocks. In scrip specific development, Ambuja Cements and ACC were trading under pressure after the long-due merger between the LafargeHolcim’s Indian operations, Ambuja Cements and ACC was called off due to some current constraints. Bank of Baroda (BoB) was trading in red on report that the bank has played a crucial role in allowing South Africa’s politically influential Gupta family to move hundreds of millions of dollars linked to alleged dirty deals into offshore accounts.

On the global front, Asian markets were trading mostly in green. A survey showed that though global demand for memory chips and petroleum products remained robust, South Korean exports were likely to have barely risen in February from year ago levels as the Lunar New Year holidays meant there were less working days. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 34,400 and 10,600 levels respectively. The market breadth on BSE was negative in the ratio of 1023:1245, while 114 scrips remained unchanged.

The BSE Sensex is currently trading at 34382.22, down by 63.53 points or 0.18% after trading in a range of 34328.53 and 34610.79. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.26%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Telecom up by 0.88%, Oil & Gas up by 0.67%, Consumer Durables up by 0.58%, Energy up by 0.54% and Utilities up by 0.31%, while Realty down by 1.08%, Bankex down by 0.97%, PSU down by 0.53%, Healthcare down by 0.17% and Power down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.41%, Bajaj Auto up by 1.05%, TCS up by 0.98%, ONGC up by 0.89% and Reliance Industries up by 0.85%.

On the flip side, SBI down by 2.11%, Axis Bank down by 1.41%, Kotak Mahindra Bank down by 1.33%, ICICI Bank down by 1.21% and Coal India down by 0.75% were the top losers.

Meanwhile, domestic rating agency, ICRA in its latest report has said that it expects the growth of India’s gross value added (GVA) at basic prices in year-on-year (YoY) terms to record a sequential recovery to 6.8 percent in Q3 (October-December) of FY18, on the back of improvement in the services and industrial sectors even as the expansion of agriculture, forestry and fishing is likely to display some moderation. Besides, it indicated that the country’s real GVA growth was at 6.1 percent in the second quarter of 2017-18.

According to the report, economic activity remained subdued during first half of fiscal year 2018, partly on account of the structural transition to the Goods and Services Tax (GST), however, signs of a pick-up in economic growth are starting to appear. Elaborating further, it said that higher growth in volumes in manufacturing and some of the services sub-sectors and in the government's expenditure, a favourable base effect and an improvement in corporate earnings are expected to contribute to a sequential recovery in the y-o-y growth of GVA at basic prices in Q3. Besides, it expects that growth in the services sector to record a base-effect led pick-up to nearly 8.8 percent in Q3 from 7.1 percent in Q2, reflecting the improvement recorded by indicators such as bank credit, cargo handled at major ports, passengers carried by domestic airlines and foreign tourist arrivals.

ICRA further stated that a favourable base effect would continue to support volume growth in sectors such as manufacturing, construction, trade, hotels, transport, communication and services related to broadcasting, and financial, real estate and professional services in the fourth quarter. It also expects that GDP and GVA growth to improve to around 7.5 percent in the fourth quarter. Notwithstanding an expected pick-up in H2, it expects GVA growth to ease to 6.5 percent in FY18 from 7.1 percent in FY17, while GDP growth is expected to decline to 6.7 percent in FY18 from 7.1 percent in FY17.

The CNX Nifty is currently trading at 10565.45, down by 17.15 points or 0.16% after trading in a range of 10541.00 and 10631.65. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 1.54%, Bharti Airtel up by 1.22%, ONGC up by 1.18%, TCS up by 1.02% and Reliance Industries up by 0.94%.

On the flip side, Ambuja Cement down by 4.16%, SBI down by 1.99%, Indiabulls Housing Finance down by 1.50%, Axis Bank down by 1.34% and Kotak Mahindra Bank down by 1.23% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 6.3 points or 0.26% to 2,463.95, FTSE Bursa Malaysia KLCI increased 9.79 points or 0.53% to 1,869.87, Jakarta Composite increased 11.54 points or 0.18% to 6,566.21, Taiwan Weighted increased 16.92 points or 0.16% to 10,853.62 and Nikkei 225 increased 287.18 points or 1.3% to 22,440.81.

On the other hand, Shanghai Composite decreased 33.53 points or 1.01% to 3,296.04 and Hang Seng decreased 18.16 points or 0.06% to 31,480.44.