Benchmarks trade slightly in red in early deals

Indian equity benchmarks made a cautious start and are trading slightly in red in early deals on Tuesday, with escalating trade tensions between the U.S. and China. Investors also remained on sidelines, ahead to the Reserve Bank of India’s (RBI) policy decision on April 5 for directional cues. The central bank is expected to maintain status quo on rates despite increased risks to inflation posed by rising oil prices and a hike in minimum support price (MSP) announced in the Budget 2018. Traders were also concerned with ICRA’s report that more Indian companies are likely to default on their borrowings in the fiscal year that started in April compared with the previous year on higher interest costs and a deterioration in business conditions. However, losses remained capped as traders are getting some solace with report that a steep rise in output of cement and fertilisers pushed up the growth of the core sector to 5.3% in February even as refinery products, electricity, coal, and natural gas production made the output of the infrastructure industries grow slower than 6.1% in January.

On the global front, Asian markets are trading in red terrain at this point of time with Japan trading lower with a cut of over half a percent after markets stateside came under pressure from the drop in tech stocks and trade-related worries. The US markets ended sharply lower on Monday after China announced it is imposing tariffs on 128 imported goods originating in the U.S.

Back home, rating agency Crisil has warned that the ongoing probes into the frauds and allegations of improprieties against bankers will dent credit growth in the new fiscal year. On the sectoral front, banking stocks remained in limelight after the RBI allowed banks to stagger the bond investment depreciation provisioning over four quarters. In scrip specific developments, Escorts inched up on hiking stake in Escorts Securities to 78% and MOIL gained on reporting 1.2 MT of manganese ore production during FY18.

The BSE Sensex is currently trading at 33248.54, down by 6.82 points or 0.02% after trading in a range of 33158.59 and 33318.34. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.30%, while Small cap index was up by 0.27%.

The top gaining sectoral indices on the BSE were PSU up by 0.77%, Telecom up by 0.68%, Healthcare up by 0.61%, Bankex up by 0.55% and Auto up by 0.42%, while Metal down by 1.08%, Capital Goods down by 0.43%, Basic Materials down by 0.32%, Utilities down by 0.23% and Consumer Durables down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.15%, Yes Bank up by 1.88%, Tata Motors - DVR up by 1.64%, ICICI Bank up by 1.26% and Tata Motors up by 1.06%. On the flip side, Wipro down by 2.09%, Adani Ports down by 1.74%, Tata Steel down by 1.55%, ONGC down by 1.19% and Coal India down by 0.85% were the top losers.

Meanwhile, expressing confidence of achieving fiscal deficit target of current fiscal year, Finance Secretary Hasmukh Adhia has said that the government is on the course of meeting the fiscal deficit target of 3.5% of gross domestic product (GDP) for 2017-18. He added that this will be aided by buoyant tax collections, especially on the direct tax side coupled with Goods and Services Tax (GST) collections and natural savings by ministries. He also said that on the whole, the FY18 has been very good, although it was a year of uncertainty for revenue due to the implementation of the GST and other reforms.

Adhia said the government collected Rs 9.95 lakh crore from direct taxes, crossing the Budget Estimate of Rs 9.80 lakh crore. However, the collections fell short of revised estimates of Rs 10.05 lakh crore. Talking about revenues from the GST, he said that the collection is 98% of the Rs 4.44 lakh crore target set in revised budget estimates. He further said that there might be less expenditure as some departments might not have spent the entire amount allocated to them for the entire fiscal.

Finance Secretary added that if a department, in spite of giving them the money is unable to spend, then it becomes a natural savings and that kind of natural savings may be there, but not otherwise. However, he said that it would take about 10 days’ time to ascertain the quantum of savings by various ministries and departments. Besides, the government had reported a fiscal deficit of Rs 7.16 lakh crore or 120.3% of the revised target for April-February.

The CNX Nifty is currently trading at 10205.05, down by 6.75 points or 0.07% after trading in a range of 10181.85 and 10229.45. There were 21 stocks advancing against 28 stocks declining on the index, while one stock remained unchanged.

The top gainers on Nifty were HPCL up by 3.02%, Indiabulls Housing up by 2.09%, SBI up by 2.03%, Yes Bank up by 1.86% and Indian Oil Corporation up by 1.82%. On the flip side, Wipro down by 2.04%, Hindalco down by 1.70%, Adani Ports down by 1.69%, Tata Steel down by 1.62% and Tech Mahindra down by 1.61% were the top losers.

All the Asian markets are trading in red; Hang Seng decreased 179.7 points or 0.6% to 29,913.68, Nikkei 225 dropped 114.72 points or 0.54% to 21,273.86, Taiwan Weighted declined 84.74 points or 0.78% to 10,803.53, Shanghai Composite fell 29.51 points or 0.93% to 3,133.67, Jakarta Composite dipped 25.37 points or 0.41% to 6,215.20, KOSPI Index shed 12.27 points or 0.5% to 2,431.89 and FTSE Bursa Malaysia KLCI down by 2.01 points or 0.11% to 1,856.34.