Benchmarks continue weak trade in morning session

Indian equity benchmarks continued their weak trade in morning session on account of selling in frontline blue chip counters. The rupee opened higher against the dollar following selling of the American currency by banks and exporters. Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 241.85 crore on March 1, as per provisional data. Domestic institutional investors (DIIs) sold equities worth a net Rs 3.29 crore. The sentiments were dampened as investors were wary of US President Donald Trump’s decision to impose import tariffs which may fuel global trade war. The US President said that he would impose a 25% import tariff on steel and 10% on aluminium to protect US producers, a move that could trigger a trade war with China and Europe. On the domestic front, business conditions in India’s service sector deteriorated modestly in February. The seasonally adjusted Nikkei India Services Business Activity Index fell from 51.7 in January to 47.8 in February, its lowest level since August. The report added that activity and new work declined for the first time since November, with rates of contraction the fastest since August. Firms remained confident towards output growth over the next 12-months as jobs growth quickened to the joint-fastest since June 2011.

Separately, foreign investors have pulled out more than Rs 11,000 crore from Indian stocks in February 2018 amid better opportunities in other emerging markets. This is the largest outflow in five months. However, the total inflow by foreign portfolio investors (FPIs) in the Indian equity markets stood at Rs 13,781 crore in January 2018. Metal stocks were trading under pressure as US President Donald Trump’s proposed policy on steel, of which his country is the planet’s biggest importer, may cause a supply glut in India, with shipments originally bound for Washington likely to end up at seaports of the world’s fastest-expanding major economy if they can’t hurdle across the American tariff walls. Realty stocks were under pressure on report that as many as 4.4 lakh housing units were unsold in seven major cities at the end of 2017 with Delhi-NCR contributing maximum at over 1.5 lakh flats. Out of the total unsold housing stock, 34,700 units are ready-to-move-in flats. Mumbai, Delhi-NCR, Chennai, Hyderabad, Pune, Bengaluru, Kolkata are seven cities covered in this survey.

Traders were seen buying in IT and Consumer Durables stocks, while selling was witnessed in Metal, Basic Materials and Oil & Gas sectors stocks. In scrip specific development, Atlanta was trading in red after National Highways & Infrastructure Development Corporation (NHIDCL) wrongfully and illegally terminated the EPC Contract of the company for four laning of end of moran bypass (Km.561.700) to Bogibeel Junction near Lapetketa (Km.580.778) of NH-37 in the state of Assam. Dilip Buildcon was trading in green on receiving Letter of Awards (LoA) from the National Highways Authority of India (NHAI) for two new Hybrid Annuity Projects valued at Rs 4,473 crore in the State of Karnataka.

On the global front, Asian markets were trading in red. A private business survey showed that growth in China’s services sector softened slightly in February but remained robust, prompting companies to hire more workers for the 18th month in a row. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 33,800 and 10,400 levels respectively. The market breadth on BSE was negative in the ratio of 675:1658, while 135 scrips remained unchanged.

The BSE Sensex is currently trading at 33726.65, down by 320.29 points or 0.94% after trading in a range of 33717.74 and 34034.28. There were 2 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.75%, while Small cap index was down by 0.83%.

The only gaining sectoral indices on the BSE were IT up by 0.03% and Consumer Durables up by 0.02%, while Metal down by 2.54%, Basic Materials down by 1.81%, Oil & Gas down by 1.40%, Telecom down by 1.33% and PSU down by 1.25% were the top losing indices on BSE.

The few gainers on the Sensex were TCS up by 0.64% and Adani Ports & Special Economic Zone up by 0.48%.

On the flip side, Tata Motors down by 3.11%, Yes Bank down by 2.70%, Tata Motors - DVR down by 2.45%, Hindustan Unilever down by 2.12% and Tata Steel down by 1.98% were the top losers.

Meanwhile, amid better opportunities in other emerging markets, foreign investors have pulled out more than Rs 11,000 crore from Indian stocks in February 2018. This is the largest outflow in five months. However, the total inflow by foreign portfolio investors (FPIs) in the Indian equity markets stood at Rs 13,781 crore in January 2018.

As per the exchange data, the FPIs withdrew a net amount of Rs 11,037 crore from equities in the month of February. This is the highest net outflow by FPIs since September 2017, when they had pulled out Rs 11,392 crore from the Indian equity markets. In the equity segment, gross purchase was around Rs 1,07,282 crore, against gross sales of around Rs 1,18,319 crore in February.

Besides, the overseas investors withdrew a net amount of Rs 253 crore from the debt markets during the month under review. In debt segment, gross purchase was around Rs 23,425 crore against gross sales of about Rs 23,678 crore during the same month. Moreover, total outflow from equity, debt and hybrid segments stood at Rs 11287.85 crore.

The National Stock Exchange (NSE) of India’s Managing Director and CEO Vikram Limaye has said that FPIs have pulled out of the Indian markets as they seem to be favouring other emerging markets like Brazil. He also said that global cues could be another reason for the outflow.

The CNX Nifty is currently trading at 10351.10, down by 107.25 points or 1.03% after trading in a range of 10345.60 and 10428.70. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.66%, TCS up by 0.63%, Adani Ports & Special Economic Zone up by 0.34% and Infosys up by 0.02%.

On the flip side, Aurobindo Pharma down by 4.17%, Hindalco down by 3.72%, Tata Motors down by 3.09%, Yes Bank down by 2.76% and GAIL India down by 2.20% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 407.98 points or 1.33% to 30,175.47, Nikkei 225 decreased 235 points or 1.11% to 20,946.64, Taiwan Weighted decreased 35.23 points or 0.33% to 10,662.94, KOSPI Index decreased 22.38 points or 0.93% to 2,379.78, FTSE Bursa Malaysia KLCI decreased 15.14 points or 0.82% to 1,840.93, Shanghai Composite decreased 5.16 points or 0.16% to 3,249.37 and Jakarta Composite decreased 2.73 points or 0.04% to 6,579.58.