Benchmarks trade lower ahead of GDP data

Indian equity benchmarks made a pessimistic start and are trading with a cut of over half a percent in early deals on Wednesday, as traders remained on sidelines ahead of December quarter GDP data and fiscal deficit data to be announced later in the day. Traders also decided to stay away from buying any risky assets ahead of manufacturing PMI data to be released later during the day. Sentiments also remained downbeat with report that the collection of Goods and Services Tax (GST) slipped marginally to Rs 86,318 crore in January 2018 (received in January/February up to February 25, 2018), from Rs 86,703 crore in December 2017. Investors shrugged off Finance Minister Arun Jaitley’s statement that India’s economy has the potential to achieve a growth rate of more than 7-8 per cent in view of policy changes accompanied by a supportive global environment. He also said India will continue to remain one of the fastest growing economies in the world.

Global cues too remained sluggish with Asian counters trading in red at this point of time, following a congressional testimony from the Federal Reserve's new chief. The US markets closed sharply lower on Tuesday after new Fed Chairman Jerome Powell highlighted the strengthening economy during his congressional testimony, raising concerns over the possibility of four rate increases this year.

Back home, steel related stocks lost sheen despite World Steel Association’s report that India’s crude steel production grew 2.5 per cent to 9.02 million tonne (MT) in January 2018 compared to 8.81 MT in the year-ago month. In scrip specific development, Cipla surged on entering into distribution agreement with Roche Pharma India, while Dilip Buildcon gained on emerging lowest bidder for Anandapuram-Pendurthi-Anakapalli project.

The BSE Sensex is currently trading at 34174.03, down by 172.36 points or 0.50% after trading in a range of 34076.45 and 34176.12. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.43%, while Small cap index was down by 0.38%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.36%, IT up by 0.14% and TECK was up by 0.02%, while Metal down by 1.23%, Bankex down by 1.02%, PSU down by 0.77%, Basic Materials down by 0.71% and Auto was down by 0.63% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 0.93%, Dr. Reddys Lab up by 0.91%, Bharti Airtel up by 0.37%, Reliance Industries up by 0.33% and Infosys was up by 0.32%. On the flip side, Yes Bank down by 1.59%, ICICI Bank down by 1.45%, Tata Motors - DVR down by 1.17%, SBI down by 1.16% and Mahindra & Mahindra was down by 1.10% were the top losers.

Meanwhile, in the wake of policy changes accompanied by a supportive global environment, Finance Minister Arun Jaitley stated that India has the potential to beat a growth rate of 7-8 percent and it will continue to remain one of the fastest growing economies in the world. He also said that India has demonstrated in the last few years that it has, even in a global environment of adversity, a potential to self-correct itself, to continue to take difficult decisions if necessary and maintain a high growth trajectory.

Jaitley said that most people in India believe that a 7-8 percent growth rate is an absolute normal for the country but the real potential of India is to beat that. Thus, he said that with policy changes accompanied by a supportive global environment, India perhaps has the potential to achieve a little more than that. He added that the country has been able to blend its economic decisions along with political acceptability to the extent that there is now a huge support, almost bordering on impatience, where people want India to reform and grow much faster.

On the country’s regime, Finance Minister has said that it’s a rule based decision making where governmental discretions based on individual cases have been virtually eliminated. He also said that the government has been able to unify taxes and bring about a relatively simpler tax structure and for international investors, indirect tax structures have become extremely investor friendly. Further he said that the government is consciously encouraging some sectors and also said that the manufacturing sector is an area where India still has to achieve its best, thus he believes that in the next decade or two, this is a sector which is going to expand very substantially and most policies therefore are now conducive to domestic manufacturing.

The CNX Nifty is currently trading at 10486.95, down by 67.35 points or 0.64% after trading in a range of 10461.55 and 10498.80. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.24%, UPL up by 0.73%, Dr. Reddys Lab up by 0.72%, Sun Pharma up by 0.68% and Bharti Airtel was up by 0.36%. On the flip side, HPCL down by 3.69%, ICICI Bank down by 2.64%, Yes Bank down by 1.80%, Hindalco down by 1.76% and Vedanta was down by 1.64% were the top losers.

All the Asian market are trading in red; Hang Seng declined 525.58 points or 1.68% to 30,743.08, Nikkei 225 fell 213.09 points or 0.95% to 22,176.77, Shanghai Composite dropped 41.92 points or 1.27% to 3,250.15, KOSPI Index shed 19.62 points or 0.8% to 2,436.52, Jakarta Composite dipped 17.43 points or 0.26% to 6,581.50 and FTSE Bursa Malaysia KLCI was down by 9.11 points or 0.49% to 1,862.35.