Benchmarks trim losses in morning session

Indian equity benchmarks trimmed some of their losses and continued to trade below neutral line in morning session consolidating its position from yesterday’s rally after RBI maintained status quo. The sentiments were dampened as trade war fears resurfaced after US President Donald Trump proposed additional tariffs on China, aggravating trade tensions. On the domestic front, banking stocks were under pressure after the anti-corruption bureau of CBI, Gandhinagar, has lodged an FIR against the promoters of Vadodara-based Diamond Power Infrastructure (DPIL), including its founder Suresh N Bhatnagar and his two sons - Amit Bhatnagar and Sumit Bhatnagar - for allegedly defrauding a consortium of 11 banks to the tune of Rs 2,654 crore.

Meanwhile, select stocks in Fast Moving Consumer Goods (FMCG) space were buzzing on private brokerage report that FMCG firms are expected to post a net revenue growth of 11.8% in the March quarter, highest in the past 18 quarters, on acceleration in volume growth, GST-led savings and higher leverage benefits. The report noted that companies have started increasing prices selectively to pass on raw material inflation after being cautious for the first few months post GST implementation. The fertilizer stocks were buzzing on ICRA’s report that the demand for fertilizers in the first half of the current financial year is likely to remain stable on the outlook for normal monsoon and higher farm income. The prices of various phosphatic fertilizers are also expected to remain stable for the upcoming year on higher subsidy.

Investors took note that the Finance Ministry welcomed the Monetary Policy Committee’s (MPC) projection of higher GDP growth and lower inflation in the current fiscal. The MPC’s growth projection of 7.4% is in line with the Economic Survey. MPC has projected inflation at 4.5% in the fourth quarter of the last fiscal. The decision of MPC comes against the backdrop of government’s assertion that both the fiscal deficit as well as the revenue shortfall in 2017-18 will be lower than the upwardly revised estimates given in the Union Budget. Separately, aviations stocks were down despite airlines global body, IATA (International Air Transport Association) report that India’s domestic air passenger demand surged 22.9% in February, more than two-fold of the global average, propelled by the launch of new flights and routes by the local airlines during the period. February was also the 42nd month of double-digit year-on-year growth on a trot, with a record more than 90% occupancy on aircraft operated by the domestic airlines.

Traders were seen buying in Healthcare, Realty and Energy stocks, while selling was witnessed in Telecom, TECK and Capital Goods sector stocks. In scrip specific development, Simplex Infrastructures was trading in green as the company procured orders worth Rs 2,595 crore in the fourth quarter of FY 2018. With this, the total order inflow during FY18 amounts to Rs 7,666 crore.

On the global front, Asian markets were trading mostly in red. Trade tensions, however, returned to the fore after Trump said that he had instructed US trade officials to consider $100 billion in additional tariffs on China, fuelling the trade dispute between the world’s two economic superpowers. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 33,600 and 10,350 levels respectively. The market breadth on BSE was positive in the ratio of 1327:909, while 97 scrips remained unchanged.

The BSE Sensex is currently trading at 33578.33, down by 18.47 points or 0.05% after trading in a range of 33501.37 and 33623.35. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.19%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.06%, Realty up by 0.85%, Energy up by 0.81%, Oil & Gas up by 0.77% and FMCG up by 0.29%, while Telecom down by 0.85%, TECK down by 0.56%, Capital Goods down by 0.54%, IT down by 0.41% and Metal down by 0.38% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.40%, Adani Ports & Special Economic Zone up by 1.35%, ICICI Bank up by 1.28%, ITC up by 0.92% and Reliance Industries up by 0.91%.

On the flip side, Bharti Airtel down by 1.59%, Larsen & Toubro down by 1.25%, Tata Motors - DVR down by 1.21%, Hindustan Unilever down by 1.13% and Kotak Mahindra Bank down by 1.02% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that the increased capital outlay and execution targets set for key infrastructure sectors in Union Budget 2018-19, is likely to give a major push to construction sector. It also noted that with funding support from increased budgetary allocation, and higher Internal and Extra Budgetary Resources (IEBR) including debt funding from institutions like LIC, EPFO, most of the infrastructure segments are expected to witness the increased pace of contract awarding and execution in 2018-19.

According to the report, this may enhance order inflows and revenues of construction firms. It also noted that the proposal to lower the rating threshold for investment in corporate bonds will channelise much needed long-term capital from pension and insurance funds into the infrastructure sector. Besides, it pointed out that a significant part of this capex will be related to the construction sector business. As per ICRA’s estimates, the proposed infrastructure capital outlay plan could result in a construction business of up to Rs 3.3 lakh crore in 2018-19 - and will be a key driver for construction activities in the country.

The rating agency further stated that a major push from the government on roads and urban infrastructure segments has helped construction companies improve their order book position. It indicated that the government had in this year’s budget allocated Rs 5.97 lakh crore towards infrastructure capital outlay by state-owned entities, a 21 percent jump over last fiscal. It also mentioned that a majority of infrastructure capex by the Central government entities is to be implemented by five ministries/ departments -- railways, road transport and highways, petroleum and natural gas, power, and housing and urban affairs -- which together account for over 80 percent of the planned capex.

The CNX Nifty is currently trading at 10314.45, down by 10.70 points or 0.10% after trading in a range of 10290.85 and 10332.10. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.41%, BPCL up by 1.69%, HPCL up by 1.48%, Sun Pharma up by 1.47% and Adani Ports & Special Economic Zone up by 1.14%.

On the flip side, Bharti Airtel down by 1.69%, Kotak Mahindra Bank down by 1.32%, Vedanta down by 1.31%, Hindustan Unilever down by 1.28% and Larsen & Toubro down by 1.26% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 29.66 points or 0.14% to 21,615.76, KOSPI Index decreased 13.26 points or 0.54% to 2,424.26, Jakarta Composite decreased 2.42 points or 0.04% to 6,180.81 and FTSE Bursa Malaysia KLCI decreased 2.4 points or 0.13% to 1,833.73.

On the other hand, Hang Seng increased 269.71 points or 0.91% to 29,788.40.

China and Taiwan stock exchange were closed on account of National holiday.