Benchmarks trade slightly lower in early deals

Indian equity benchmarks are trading slightly in red in early deals on Wednesday, as growing fears over the PNB scam and continued selling pressure from FIIs on expectations of faster than anticipated interest rate hike in the U.S. kept the underlying sentiments cautious. However, losses remained capped as traders took some solace with report that the government is planning to pitch for an upgrade in its sovereign ratings from global rating agency Fitch, highlighting its structural reform initiatives and a revised fiscal consolidation framework. Officials from the Finance Ministry are scheduled to meet representatives from Fitch Ratings on March 7 as part of the annual review by the agency. Traders also got some support with private report that the Indian economy is likely to recover gradually to 7.1 per cent in the 2018-19 financial year, as GST-related disruptions have eased and consumption levels have improved.

On the global front, Asian markets are trading mostly in red at this point of time after a key advocate for free trade in the White House announced his resignation, fanning fears that US President Donald Trump would go ahead with tariffs and risk a trade war. The US markets closed higher on Tuesday amid easing geopolitical concerns following reports that North Korea is willing to talk about denuclearization.

Back home, Telecom stocks remained buzzing on report that the Cabinet will on Wednesday take a call on providing relief to telecom operators, and look at raising the spectrum cap from the current 25 per cent to the industry demand of 35 per cent, among other things. In scrip specific developments, Bharti Airtel edged higher on entering into strategic agreement with GBI and Sadbhav Infrastructure advanced on emerging lowest bidder for Tumkur - Shivamogga project.

The BSE Sensex is currently trading at 33256.68, down by 60.52 points or 0.18% after trading in a range of 33172.25 and 33301.74. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.54%, while Small cap index was down by 0.84%.

The top gaining sectoral indices on the BSE were IT up by 0.73%, TECK up by 0.58%, Consumer Durables up by 0.22%, FMCG up by 0.21% and Auto was up by 0.01%, while Metal down by 1.30%, Realty down by 0.95%, Basic Materials down by 0.94%, PSU down by 0.87% and Bankex was down by 0.77% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.07%, Tata Motors up by 0.81%, Infosys up by 0.65%, TCS up by 0.60% and Maruti Suzuki up by 0.60%. On the flip side, ICICI Bank down by 2.19%, Adani Ports &Special down by 1.60%, SBI down by 1.50%, ONGC down by 1.38% and Sun Pharma down by 1.25% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings has said that the government’s move to allow commercial coal mining will boost production as well as mining efficiency. As per the ratings agency, this decision can save around Rs 30,000 crore of coal imports, through the substitution of imported non-coking coal with domestic production.

Crisil highlighted that participation of private miners would increase much-needed competition, enhance productivity by facilitating the use of latest equipment, technology and services through higher investments. It also said that commercial mining can have far-reaching impact, as almost half of the domestic coal reserves of 300 billion tonne, mostly non-coking coal, are yet unallocated.

The ratings agency stated that coal imports, especially of the non-coking variety, should reduce once the proposed regulatory changes to admit private sector companies in coal mining materialize and it will also help the country come closer to its vision of producing 1.5 billion tonne of coal annually by 2022. It further said that sectors like power, cement and steel will gain the most, being the largest consumers of non-coking coal.

Besides, the Cabinet Committee on Economic Affairs (CCEA) recently approved the methodology for auction of mines for sale of coal, under which the highest bidder will be given mining rights and there are no restrictions on end use. Currently, about 94% of the mining is being done by government-owned entities Coal India and Singareni Collieries Company. Despite the recent increase in domestic coal production, India still meets a fifth of its annual requirement through imports, costing about Rs 1 lakh crore.

The CNX Nifty is currently trading at 10231.75, down by 17.50 points or 0.17% after trading in a range of 10193.65 and 10232.95. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 1.59%, Tata Motors up by 1.41%, Tech Mahindra up by 1.04%, Zee Entertainment up by 0.96% and Dr. Reddys Lab up by 0.94%. On the flip side, Hindalco down by 2.35%, Adani Ports down by 1.79%, ICICI Bank down by 1.75%, Indiabulls Housing down by 1.49% and HPCL down by 1.46% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 111.84 points or 0.52% to 21,305.92, Hang Seng decreased 107.69 points or 0.35% to 30,403.04, Jakarta Composite dropped 64.55 points or 0.99% to 6,435.56, Taiwan Weighted slipped 15.6 points or 0.14% to 10,768.74, FTSE Bursa Malaysia KLCI fell 10.85 points or 0.59% to 1,837.52 and KOSPI Index was down by 2.84 points or 0.12% to 2,408.57.

On the flip side, Shanghai Composite was up by 4.6 points or 0.14% to 3,294.24.