Benchmarks end lower ahead of balance of trade data

Indian equity benchmarks ended the Thursday’s trade in red terrain with frontline gauges declining below their crucial 10,400 (Nifty) and 33,700 (Sensex) levels. After making a cautious start, markets traded with marginal losses for most part of the session, as market participants opted to remain on sidelines ahead of balance of trade figure for the month of February to be released later in the day. Sentiments remained downbeat with a private report stating that the slowdown seen of late in India's export growth rate is likely to continue in February as well, thanks to a slow disbursement of Goods and Services Tax (GST) refunds, low growth in labour-intensive sectors and a volatile currency. Selling got intensified in last leg of trade which dragged markets to their lowest level. Investors remained concerned as Industry bodies said that RBI’s decision to ban Letters of Undertaking (LOUs) for trade credit for imports will have a disruptive impact, at least in the immediate term, as small businesses would require higher working capital. Traders took note of a report that the proceedings of the Lok Sabha were paralysed for the ninth consecutive day today as several parties, including NDA constituent TDP, continued their noisy protests over various issues, including the PNB scam and special status for Andhra Pradesh.

Traders failed to take sense of relief with Fitch Ratings in its latest ‘Global Economic Outlook’ forecasting that the Indian economy is likely to grow at the rate of 7.3% in the next fiscal (FY19) and further to 7.5% in FY20. Traders shrugged off World Bank’s statement that India’s economy is expected to grow at 7.3% in the next financial year and accelerate to 7.5% in 2019-20, bottoming out from the impact of demonetisation and GST, even as it highlighted private investments and exports as the two lagging engines of growth. In its biannual publication, India Development Update, the World Bank said it expected Indian economy to clock a growth rate of 6.7% in the current financial year. Moreover, the World Bank is planning to raise lending to India by about $1 billion every year for the next five years from the current $3 billion to $3.5 billion. The lending will be mainly for infrastructure projects.

On the global front, European markets were trading in green terrain in early deals. The European Central Bank’s long-delayed guidelines on treating new soured bank debt will go into effect on April 01, but lenders may get a reprieve from full implementation until 2021. Asian markets ended mostly in red due to lingering concerns over trade war after the White House said the Donald Trump administration wanted China to reduce its trade surplus with the US by $100 billion.

Back home, banking shares remained subdued with revelations of yet another fraud at Punjab National Bank compounding the already-gloomy sentiment on public-sector lenders. However, fertilizer stocks rose after the Indian government decided to continue a urea subsidy scheme till 2020 and implemented the direct benefit transfer scheme. Realty stocks exhibited mixed trend on a report stating that the market size of the Indian real estate sector is expected to reach $180 billion by 2020 with the housing sector contribution doubling to 11.2% of GDP.

Finally, the BSE Sensex declined 150.20 points or 0.44% to 33,685.54, while the CNX Nifty was down by 50.75 points or 0.49% to 10,360.15.

The BSE Sensex touched a high and a low of 33,866.28 and 33,637.28, respectively and there were 11 stocks on gaining side as against 20 stocks on losing side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.49%, while Small cap index was up by 0.80%.

The few gaining sectoral indices on the BSE were Consumer Discretionary Goods & Services up by 0.31%, Industrials up by 0.22% and Power was up by 0.14%, while Energy down by 1.16%, Oil & Gas down by 1.04%, Metal down by 0.54%, FMCG down by 0.52% and Bankex was down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.14%, HDFC Bank up by 0.79%, Mahindra & Mahindra up by 0.67%, Coal India up by 0.66% and ONGC up by 0.50%. On the flip side, Yes Bank down by 2.04%, Reliance Industries down by 1.76%, ICICI Bank down by 1.60%, Hindustan Unilever down by 1.48% and Tata Steel down by 1.46% were the top losers.

Meanwhile, Minister of state for civil aviation, Jayant Sinha has said that his ministry is targeting a five-fold increase in passenger trips to 1 billion per annum in 15-20 years, in view of the huge growth opportunities the sector holds. Therefore, he said that the government is working towards setting up of new greenfield airports and skilling manpower to achieve this target. He also noted that the billion passenger trips would not come from aircraft alone but also from helicopters, sea planes and passenger drones. He added that many of these have still to be manufactured in the country and it provides tremendous business opportunities to start and develop these new technologies.

Elaborating on passenger drones, Sinha said that this is a big industry and in the coming years, it is likely to touch a trillion dollar mark. He said “We in India have the opportunity to be a leader in this. We are already working on drone regulations so we can set standards, develop different drone technologies.” He noted that like they have made air travel affordable to common people wearing 'hawai chappals, similarly they can go from auto rickshaws to air rickshaws, that is the opportunity.

The minister further said that safety and security is the number one concern and the ministry is working hard on this. He noted that they are working on a unified security architecture with CISF to ensure that all large or small airports have same level of high security. On the job front, the minister said that the industry currently employs about 2 lakh people directly and about 1.2 million people indirectly. He also said that this will quintuple, so they will have 6 million people working over the next few years. Besides, he indicated that revenues in the sector would increase significantly from Rs 2 lakh crore to Rs 8-10 trillion (Rs 8-10 lakh crore) in the next 15-20 years.

The CNX Nifty traded in a range of 10,420.00 and 10,346.20. There were 12 stocks in green as against 38 stocks in red on the index.

The top gainers on Nifty were Asian Paints up by 2.11%, Mahindra & Mahindra up by 0.84%, Coal India up by 0.75%, Bajaj Finance up by 0.73% and Indiabulls Housing Finance up by 0.69%. On the flip side, Indian Oil Corporation down by 3.01%, Yes Bank down by 2.15%, Reliance Industries down by 1.94%, GAIL India down by 1.79% and ICICI Bank down by 1.67% were the top losers.

European markets were trading in green; France’s CAC increased 11.51 points or 0.22% to 5,244.87, UK’s FTSE 100 gained 12.55 points or 0.18% to 7,145.24 and Germany’s DAX was up by 24.38 points or 0.2% to 12,262.12.

Asian markets closed mostly in red on Thursday due to lingering concerns over trade war after the White House said the Donald Trump administration wanted China to reduce its trade surplus with the US by $100 billion. The overnight negative close on Wall Street and lack of positive news from the Asian region too contributed to the mostly weak and sluggish trend in most of the markets in Asia. Japanese shares eked out small gains with traders noting the Bank of Japan bought up exchange traded funds, offsetting weakness in machinery makers. Japan’s construction machinery and machine tool makers underperformed, hit by worries that global trade tensions could hurt demand after U.S. President Donald Trump sought to impose fresh tariffs on China. Meanwhile, China stocks ended flat, with gains led by consumer and healthcare firms, while small-caps, particularly newly-listed shares, were dumped after regulators warned of risks and bubbles.