Benchmarks continue lackluster trade in early noon deals

Indian equity benchmarks continued their lackluster trade in early afternoon session, on the back of selling activities by market-participants. Investors have digested RBI’s monetary policy and are eyeing corporate earnings that will start next week. Some concern crept in with the report highlighting that 23,000 high net worth individuals (HNIs) have left India since 2014 including 7,000 in 2017 alone, highest numbers for any country. The government has commenced a process to evaluate the ‘substantial task risk’ such migrations pose and formulate a policy response. However losses got capped with private report that Indian services sector climbed back into expansion zone in March, helped by the flow of new work, encouraging companies to hire at the fastest pace in seven years. Meanwhile, the broader indices were managing to hold their heads above water with gains in the range of 0.10%-0.30%. In scrip specific development, Sagar Cements surged by over 3 percent on acquiring entire assets of two mini hydel power plants.

On the global front, Asian markets were trading mostly in red, after Beijing vowed to fight the Trump administration’s latest threats of yet more tariffs on Chinese imports, intensifying investor fears about a brewing trade battle between the world’s two biggest economies. Back home, the BSE Sensex is currently trading at 33586.38, down by 10.42 points or 0.03% after trading in a range of 33501.37 and 33623.35. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.12%, while Small cap index was up by 0.30%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.98%, Realty up by 0.74%, Oil & Gas up by 0.66%, Energy up by 0.65% and FMCG up by 0.30%, while Telecom down by 1.17%, TECK down by 0.66%, Capital Goods down by 0.62%, IT down by 0.47% and Metal down by 0.42% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.10%, Tata Motors up by 0.84%, ITC up by 0.81%, Dr. Reddy’s Lab up by 0.80% and ICICI Bank up by 0.76%. On the flip side, Bharti Airtel down by 2.01%, Larsen & Toubro down by 1.17%, Infosys down by 1.11%, Axis Bank down by 0.79% and Indusind Bank down by 0.77% 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 10315.20, down by 9.95 points or 0.10% after trading in a range of 10290.85 and 10332.10. There were 21 stocks advancing against 28 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Lupin up by 4.23%, BPCL up by 2.05%, Tata Motors up by 1.24%, Sun Pharma up by 1.20% and HPCL up by 1.06%. On the flip side, Bharti Airtel down by 2.11%, Vedanta down by 1.45%, Infosys down by 1.30%, Larsen & Toubro down by 1.22% and Indusind Bank down by 1.07% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 77.9 points or 0.36% to 21,567.52, KOSPI Index dropped 7.94 points or 0.33% to 2,429.58, FTSE Bursa Malaysia KLCI fell 3.12 points or 0.17% to 1,833.01 and Jakarta Composite was down by 2.42 points or 0.04% to 6,180.81.

On the flip side, Hang Seng was up by 304.6 points or 1.03% to 29,823.29.