Benchmarks continue weak trade; IT, Bankex drag

Indian equity benchmarks continued their weak trade in morning session on account of selling in frontline blue chip counters. The rupee opened lower against the dollar after fiscal deficit for this fiscal overshot the target. Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 1,750.52 crore, as per provisional data. Domestic Institutional Investors (DIIs) net bought equities of Rs 1,596.89 crore. The sentiments were under pressure with Former RBI governor D Subbarao cautioning against India’s deficit challenge and said the country is no longer the sweet spot due to rising oil prices. He also said raising of import tariff in the Union Budget 2018-19 will hurt Make in India mission. Subbarao added that the country’s balance of payments crisis in 1991 and the near crisis in 2013 were consequences of unchecked fiscal profligacy spilling over into the external sector. Banking stocks continued reeling under pressure as the impact of Punjab National Bank (PNB) scam continued to hit. Canara Bank has filed a complaint with Central Bureau of Investigation (CBI) on fraudulent transactions worth Rs 515 crore against Kolkata based RP Infosystems and its directors. The alleged fraud comes amid CBI’s probe into recent complaints of massive frauds in the Corporation Bank, PNB, Bank of Baroda and Oriental Bank of Commerce.

The street shrugged off the report that India regained its status as the world’s fastest growing major economy in the October-December quarter, surpassing China for the first time in a year as government spending, manufacturing and services all picked up. The Ministry of Statistics data showed that Asia’s third-largest economy grew 7.2% in the December quarter, its fastest in five quarters. Separately, India’s core sectors grew at a faster clip in January from a year ago than in the previous month, with an uptick in cement, electricity, coal, refinery products and steel industries, indicating a strong start to the last quarter of 2017-18. The combined index of the eight core industries rose 6.7% in January compared to 4.2% in December 2017. 

Meanwhile, select steel counters were buzzing on ICRA report that a pickup in domestic steel demand paired with sustained buoyancy in the auto sector and a recovery in construction and capital goods along with consolidation in the sector as part of the insolvency resolution of stressed steel assets is tipped to favour production growth in steel sector. Steel demand growth has improved to 5.2% in nine month period of FY2018 as against 4.5% in seven months of FY2018. Select Aviation Company stocks were buzzing on Directorate General of Civil Aviation’s data that India’s domestic air passenger traffic crossed the 100-million mark for the first time in 2017, led by New Delhi and Mumbai airports, which together accounted for a 69% share. 

Traders were seen buying in Auto, Telecom and Basic Materials stocks, while selling was witnessed in IT, Bankex and TECK sectors stocks. In scrip specific development, Canara Bank was trading in red on filing a complaint with Central Bureau of Investigation (CBI) on fraudulent transactions worth Rs 515 crore against Kolkata based RP Infosystems and its directors. MOIL was trading in green on revising prices of different grades of manganese ore and other products.

On the global front, Asian markets were trading mostly in green. A private survey showed that growth in China’s manufacturing sector unexpectedly picked up to a six-month high in February as factories rushed to replenish inventories to meet rising new orders. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 34,200 and 10,500 levels respectively. The market breadth on BSE was positive in the ratio of 1256:945, while 106 scrips remained unchanged.

The BSE Sensex is currently trading at 34132.77, down by 51.27 points or 0.15% after trading in a range of 34106.78 and 34278.63. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.07%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Auto up by 0.47%, Telecom up by 0.44%, Basic Materials up by 0.43%, Industrials up by 0.43% and Capital Goods up by 0.29%, while IT down by 0.45%, Bankex down by 0.40%, TECK down by 0.38%, PSU down by 0.31% and Utilities down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.32%, Bajaj Auto up by 1.27%, Tata Motors up by 1.09%, IndusInd Bank up by 0.90% and Yes Bank up by 0.76%.

On the flip side, ICICI Bank down by 2.55%, SBI down by 1.54%, Infosys down by 1.09%, Power Grid down by 1.01% and Hero MotoCorp down by 0.85% were the top losers.

Meanwhile, India’s core sector output expanded at a faster pace of 6.7% in January 2018, against the 4.2% growth recorded in December 2017, as petroleum refinery and cement output zoomed while steel power and coal production improved. According to data released by the ministry of Commerce and Industry it showed the combined Index of eight core industries stood at 133.1 in January, 2018, which was 6.7% higher compared to the index of January, 2017. Its cumulative growth during April to January, 2017-18 was 4.3%. The Eight Core Industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).  

Among eight core sectors, Coal production having 10.33% weight surged 3.0% in January, 2018 over January, 2017 and its cumulative index increased by 1.5% during April to January, 2017-18 over corresponding period of the previous year. Petroleum Refinery production having 28.04% weight jumped 11% in January, 2018 over January, 2017 and its cumulative index increased by 4.7 % during April to January, 2017-18 over the corresponding period of previous year. Electricity generation having 19.85% weight rose 8.2% in January, 2018 over January, 2017 and its cumulative index inched up by 5.4% during April to January, 2017-18 over the corresponding period of previous year.  

The Natural Gas production having 6.88% weight fell 1.0% in January, 2018 over January, 2017, while its cumulative index was up by 3.5% during April to January, 2017-18 over the corresponding period of previous year. Steel production having 17.92% weight increased by 3.7% in January, 2018 over January, 2017 and its cumulative index jumped by 6.4% during April to January, 2017-18 over the corresponding period of previous year.

Crude Oil production having 8.98% weight declined by 3.2% in January, 2018 over January, 2017 and its cumulative index fell by 0.7% during April to January, 2017-18 over the corresponding period of previous year. Fertilizer production having 2.63% weight dropped by 1.6% in January, 2018 over January, 2017 and its cumulative index declined 0.7% during April to January, 2017-18 over the corresponding period of previous year. On the other hand, Cement production having 5.37% weight was up by 20.7% in January, 2018 over January, 2017 and its cumulative index increased by 4.4% during April to January, 2017-18 over the corresponding period of previous year.

The CNX Nifty is currently trading at 10487.40, down by 5.45 points or 0.05% after trading in a range of 10472.65 and 10525.50. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.40%, Aurobindo Pharma up by 2.00%, Eicher Motors up by 1.50%, Bajaj Auto up by 1.24% and Tata Motors up by 1.20%.

On the flip side, ICICI Bank down by 2.52%, SBI down by 1.27%, Lupin down by 1.15%, GAIL India down by 0.92% and Infosys down by 0.90% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 3.22 points or 0.17% to 1,859.42, Hang Seng increased 13.29 points or 0.04% to 30,858.01, Shanghai Composite increased 17.57 points or 0.54% to 3,276.98 and Jakarta Composite increased 25.84 points or 0.39% to 6,623.05.

On the other hand, Nikkei 225 decreased 351.78 points or 1.59% to 21,716.46 and Taiwan Weighted decreased 20.14 points or 0.19% to 10,795.33.

Seoul Stock Exchange was closed on account of National holiday.