Benchmarks turn green in early deals

Paring all of their initial losses, Indian equity benchmarks entered into green terrain and are trading with modest gains in early deals. Traders opted to buy beaten-down but fundamentally strong stocks after four days of continuous drubbing. Traders took some encouragement with Reserve Bank of India’s (RBI) release stating that the country’s manufacturing sector witnessed an improvement in sales growth in the third quarter this fiscal on annual basis, though net profit has remained subdued due to lack of support from other income. However, gains remained capped with Bibek Debroy’s statement that India’s net exports are not doing well even as the global economy is on the recovery path. Debroy further highlighted that India is facing a dilemma from the point of view of pushing exports, as exporters would like exchange rate to depreciate, however exchange rate might not depreciate as much as exporters want because of capital inflows.

Global cues too remained dampened as investors stayed cautious following the overnight pullback on Wall Street and ahead of outcome of two-day Federal Reserve policy meeting. The US markets closed lower on Monday on lingering concerns about a potential trade war as well as political uncertainty following recent developments in Washington.

Back home, telecom stocks exhibited mixed trend after the Department of Telecom amended licence norms of service providers to increase the number of instalments for spectrum payments and radiowaves frequency holding limit to provide relief to the sector reeling under deep financial stress. Steel stocks gained shine after the government said that 8.22 million tonnes finished steel was exported during April-January of 2017-18. India had exported 8.24 MT during 2016-17 and 4.08 MT in 2015-16.

The BSE Sensex is currently trading at 32986.54, up by 63.42 points or 0.19% after trading in a range of 32810.86 and 32987.47. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.32%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Energy up by 0.67%, Oil & Gas up by 0.60%, IT up by 0.50%, TECK up by 0.49% and Industrials was up by 0.30%, while Healthcare down by 0.82%, Utilities down by 0.28%, Bankex down by 0.16%, Telecom down by 0.10% and Metal was down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.18%, Adani Ports up by 1.68%, Tata Motors up by 0.98%, Infosys up by 0.88% and Reliance Industries up by 0.79%. On the flip side, NTPC down by 1.29%, Mahindra & Mahindra down by 1.19%, Bharti Airtel down by 1.05%, Kotak Mahindra Bank down by 0.79% and Indusind Bank down by 0.56% were the top losers.

Meanwhile, highlighting India’s exports scenario, the head of Economic Advisory Council to the Prime Minister (EAC-PM) and Niti Aayog Member, Bibek Debroy has said that India’s net exports are not performing well even as the global economy is witnessing a decent recovery. He added that, India is facing a dilemma from the point of view of pushing exports, as exporters would like exchange rate to depreciate, however exchange rate might not depreciate as much as exporters want because of capital inflows. Debroy also noted that ideally the central bank should intervene in the market but intervention by the Reserve Bank of India (RBI) in the market is not without its cost side.

The exports witnessed lowest expansion in the last four months in February where it grew 4.5 per cent to 25.8 billion as shipments of engineering, textiles and gems and jewellery declined while trade deficit narrowed to a five-month low of $12 billion. The chairman of EAC-PM insisted as long as India’s import duties are below the bound rates, it can raise import duties. Moreover, some of India’s tariff rates are misaligned and the country has signed plethora of free trade agreements.

Noting that traditionally, Commerce Ministry and Ministry of External Affairs (MEA) have worked in silos, he said, “this is first time, they have started working together.” India’s trade prospects will depend on the efforts being made to improve logistics, integrate investments in the global supply-chain, improve the business environment and develop infrastructure, he added.

The CNX Nifty is currently trading at 10116.70, up by 22.45 points or 0.22% after trading in a range of 10049.10 and 10118.50. There were 32 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.73%, Tata Steel up by 3.37%, HPCL up by 1.89%, Tech Mahindra up by 1.69% and Adani Ports up by 1.56%. On the flip side, Vedanta down by 5.11%, Cipla down by 5.06%, NTPC down by 1.17%, Mahindra & Mahindra down by 1.06% and Aurobindo Pharma down by 0.87% were the top losers.

Asian markets are trading in red; Hang Seng decreased 169.56 points or 0.54% to 31,344.20, Nikkei 225 declined 160.76 points or 0.75% to 21,320.14, Jakarta Composite tumbled 64.8 points or 1.03% to 6,224.77, Taiwan Weighted shed 53.78 points or 0.49% to 10,993.12, Shanghai Composite slipped 8.43 points or 0.26% to 3,270.82, KOSPI Index dropped 5.98 points or 0.24% to 2,469.05 and FTSE Bursa Malaysia KLCI was down by 2.91 points or 0.16% to 1,845.03.