Weak trade prevails 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 US dollar at the Interbank Foreign Exchange on selling of the greenback by exporters and banks. The dollar weakened against some currencies overseas after US President Donald Trump sacked Secretary of State Rex Tillerson. Traders remained concerned on report that the Reserve Bank of India (RBI) is unlikely to reduce key policy rates in 2018 despite a dip in retail inflation in February. Risks like the higher Minimum Support Prices (MSPs) for food grains promised in the budget, can push up the inflation in the next fiscal year. Terming it as a challenging period for the central rate setting panel, the report highlighted that the rising MSPs are a risk and once inflation starts rising from the second quarter, the apex bank would turn more hawkish.

Investors took note of a private report stating that based on the current monthly rate of Rs 87,400 crore, the street expects that the Goods and Services Tax (GST) collection may remain range-bound unless compliance measures improve, particularly invoice matching. The lower GST run rate poses a risk to FY19 tax collection and to fiscal deficit. The street shrugged off the private report that revival in rural demand, increased infrastructure spending is likely to drive India’s growth in current year, even as increasing debt and trade protectionism could pose a challenge. Showing signs of recovery, the Indian economy recorded a five-quarter high growth of 7.2% in the October-December period on good showing by key sectors like agriculture, construction and manufacturing.

Meanwhile, select telecom stocks were trading in red after the telecom regulator issued show-cause notices to some carriers over call drops and inability to meet prescribed benchmarks under the new quality of service rules in some circles, and has given them time till March 21 to present their side of the case. PSU Banking sector was under pressure after increase in PNB fraud amount. Punjab National Bank told the police that it has uncovered additional exposure of about Rs 942.18 crore ($145.27 million) to Asmi Jewellery of Gitanjali Group in connection with a massive alleged fraud. This takes the Delhi-based lender’s total exposure to one of country’s biggest banking frauds up to Rs 13,640 crore from the earlier estimate of Rs 12,700 crore.

Traders were seen buying in Basic Materials, IT and Capital Goods stocks, while selling was witnessed in Telecom, Bankex and Energy sector stocks. In scrip specific development, Larsen & Toubro was trading in green as its wholly owned subsidiary -- L&T Hydrocarbon Engineering (LTHE) -- won orders worth in excess of Rs 1600 crore across various business segments. Strides Shasun was trading in green after its wholly owned subsidiary - Strides Pharma Global received approval for Efavirenz Tablets USP, 600 mg from the United States Food & Drug Administration (USFDA).

On the global front, Asian markets were trading in red amid fears of rising US protectionism as President Donald Trump fired his Secretary of State. Japan’s core machinery orders rebounded in January from a steep decline the previous month, handily beating expectations in a sign that capital spending will continue contributing to economic growth. 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 neutral in the ratio of 1102:1093, while 127 scrips remained unchanged.

The BSE Sensex is currently trading at 33735.79, down by 120.99 points or 0.36% after trading in a range of 33690.61 and 33800.04. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.43%, IT up by 0.37%, Capital Goods up by 0.28%, Consumer Durables up by 0.25% and TECK up by 0.16%, while Telecom down by 0.86%, Bankex down by 0.63%, Energy down by 0.55%, Realty down by 0.46% and PSU down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 0.64%, Larsen & Toubro up by 0.35%, Infosys up by 0.22%, TCS up by 0.21% and Hindustan Unilever up by 0.17%.

On the flip side, Bharti Airtel down by 1.21%, Hero MotoCorp down by 1.18%, SBI down by 1.14%, Axis Bank down by 1.06% and ICICI Bank down by 1.05% were the top losers.

Meanwhile, Finance Minister Arun Jaitley has said that the central government has released a total of Rs 28,398 crore to states as Goods and Services Tax (GST) compensation for the July-December period of 2017, with Karnataka getting a major pie. He also said that states are protected from any loss of revenues arising from rollout of the new indirect tax regime under the GST law.

The government has lowered the indirect tax revenue collection forecast in the revised estimates by Rs 51,856 crore to Rs 8.75 lakh crore in FY18. As per the Union Budget estimates, over Rs 9.26 lakh crore was to be collected from indirect taxes.

During July-December 2017, Rs 4,130 crore has been released to Karnataka as compensation, followed by Rs 2,838 crore to Punjab, Rs 2,532 crore to Gujarat, Rs 2,119 to Bihar, Rs 1,911 crore to Rajasthan and Rs 1,520 crore to Uttar Pradesh, among various states. 

The CNX Nifty is currently trading at 10388.10, down by 38.75 points or 0.37% after trading in a range of 10371.10 and 10407.05. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.84%, Ultratech Cement up by 1.50%, Ambuja Cement up by 1.28%, GAIL India up by 1.21% and HCL Tech up by 0.69%.

On the flip side, Bharti Infratel down by 1.58%, ICICI Bank down by 1.40%, Bharti Airtel down by 1.36%, BPCL down by 1.32% and Hero MotoCorp down by 1.25% were the top losers.

The Asian markets were trading in red; Hang Seng decreased 397.53 points or 1.26% to 31,203.92, Nikkei 225 decreased 180.92 points or 0.82% to 21,787.18, Taiwan Weighted decreased 47.56 points or 0.43% to 11,048.07, Jakarta Composite decreased 36.3 points or 0.57% to 6,376.55, Shanghai Composite decreased 17.61 points or 0.53% to 3,292.63, KOSPI Index decreased 12.24 points or 0.49% to 2,482.25 and FTSE Bursa Malaysia KLCI decreased 6.2 points or 0.33% to 1,857.83.