Benchmarks continue weak trade in morning session

Indian equity benchmarks continued their weak trade in morning session on account of selling in frontline blue chip counters. The markets were under pressure on account of profit booking and due to higher crude prices. Overall higher crude oil prices are negative for the country like India that imports more than 80% of its oil requirement. The rupee started off at 64.99 against the dollar, little changed from its previous close. According to NSE provisional data, Foreign Portfolio Investors offloaded shares of Rs 685 crore in the previous trading session. The sentiments were also under pressure on foreign brokerage report that the trend of earnings downgrade for Indian equities that began three years ago is not showing signs of abating despite growth in the three quarters to December 2017. The report highlighted that the consensus estimate for the earnings per share (EPS) of the MSCI India index for 2018 is lowered by 10.3% since December 2016. On the other hand, the EPS estimate of the MSCI Asia ex-Japan index has increased by 13.6%.

Meanwhile, banking stocks were under pressure taking cues from Fitch Ratings which downgraded the viability rating of the Punjab National Bank (PNB) to ‘bb-‘ from ‘bb’ and maintained the rating on Rating Watch Negative (RWN) following a multi-crore fraud involving diamond trader Nirav Modi. The agency added that other ratings were unaffected by this downgrade but it expressed doubts whether the bank management would be able to address the fraud quickly. Separately, the finance ministry is soon expected to take stock from state-run lenders on fraud in cases of bad loans and the measures taken to prevent them. Oil marketing companies Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) were trading under pressure after Brent crude hit four-year high. The higher crude prices were on account of tensions linked to Syria which raised the potential for disruptions to Middle East crude output. Separately, Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda and support the valuation of state energy giant Aramco before an initial public offering.

The street shrugged off Asian Development Bank’s (ADB) latest report which highlighted that growth in the Indian economy is expected to rebound to 7.3% in the fiscal year 2018 and will accelerate further to 7.6% in 2019. It added that the country’s Gross Domestic Product (GDP) grew 6.6% in the fiscal year 2017 due to the lingering effects of demonetization in 2016, businesses adjusting to a new tax regime in 2017, and subdued agriculture. Separately, traders failed to draw some respite from World Economic Forum’s (WEF) statement that India can play a pivotal role in shaping the global fourth Industrial revolution as over half of its population is under the age of 27. The WEF has already partnered with the Indian government to set up the Centre for the Fourth Industrial Revolution India in Mumbai.

Traders were seen buying in IT, Metal and TECK stocks, while selling was witnessed in Oil & Gas, PSU and Bankex sector stocks. In scrip specific development, Tata Steel was trading in green on entering into definitive agreements to subscribe to additional equity shares in Subarnarekha Port Private (SPPL) to acquire an aggregate of approximately 7% share capital of SPPL. Generic Engineering Construction & Projects was trading in green on being awarded orders worth Rs 101.53 crore from many reputed clients. The company has bagged order from Royal Cold Chain, JSW Steel, Aarti Industries, Skyline Icon and Triveni Lifestyle Developers LLP of worth Rs 5.91 crore, Rs 13.41 crore, Rs 2.88 crore, Rs 64.33 crore and Rs 15.00 crore, respectively. 

On the global front, Asian markets were trading mostly in green as trade ties between Washington and Beijing were on the mend gave way to questions about the next phase of the diplomatic tit-for-tat between the two countries. China’s factory-gate inflation cooled to a 17-month low in March, probably indicating an ebbing in demand and backing expectations of a broader slackening in economic growth this year as authorities extend a clamp-down on financial risks. Back home, the BSE Sensex and NSE Nifty were trading below the psychological 33,900 and 10,400 levels, respectively. The market breadth on BSE was negative in the ratio of 865:1318, while 103 scrips remained unchanged.

The BSE Sensex is currently trading at 33848.20, down by 32.05 points or 0.09% after trading in a range of 33750.74 and 33972.51. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.40%, while Small cap index was down by 0.20%.

The top gaining sectoral indices on the BSE were IT up by 1.02%, Metal up by 0.88%, TECK up by 0.83%, Consumer Durables up by 0.13% and Telecom up by 0.03%, while Oil & Gas down by 1.82%, PSU down by 1.61%, Bankex down by 0.91%, Utilities down by 0.62% and Energy down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.58%, TCS up by 1.35%, Infosys up by 1.10%, Wipro up by 1.05% and Sun Pharma up by 0.84%.

On the flip side, Adani Ports & Special Economic Zone down by 2.55%, SBI down by 2.17%, ICICI Bank down by 1.80%, Axis Bank down by 1.36% and Yes Bank down by 1.27% were the top losers.

Meanwhile, World Economic Forum (WEF) President Borge Brende has said that India can play a crucial role in shaping the global fourth industrial revolution agenda in a responsible, scalable and inclusive manner, as more than 50 percent of its population is below the age of 27. He also said that the advent of the fourth industrial revolution can help India leapfrog traditional phases of development and accelerate its transition to a developed nation. He also noted that they are seeing the emergence of innovative technological trends such as artificial intelligence, the internet of things, robotics, 3D printing, nanotechnology, and others with applications as diverse as the technologies themselves. He added that the combination of these technological innovations is the fourth industrial revolution.

Brende has pointed out that deploying these technologies optimally and strategically can create a potent mix of resources and infrastructure that can yield better quality, more sustainable growth. He also noted that with the right mix of accelerators – including regulatory frameworks, educational ecosystems and government incentives – India can lead the fourth industrial revolution, while simultaneously enhancing the quality, equity and sustainability of its own growth and development outcomes. Besides, he said that the WEF, which has been championing for the ‘Fourth Industrial Revolution’, is to set up a new centre in Mumbai, in partnership with Indian government. He stated that the centre will work to accelerate the development and implementation of governance protocols for emerging science and technology to serve citizens, society and the public at large.

The WEF President further said that the Indian government is already on the right path by bringing the necessary structural reforms and promoting an entrepreneurial ecosystem through initiatives such as Startup India and Atal Innovation Mission. He also said that Prime Minister Modi’s ‘Together for All, Development for All’ clarion call and his emphasis on embedding technological evolution within this philosophy for broad-based development will be a key driver of inclusive growth and progress in India.

The CNX Nifty is currently trading at 10378.85, down by 23.40 points or 0.22% after trading in a range of 10355.60 and 10428.15. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.82%, HCL Technologies up by 2.16%, ONGC up by 1.50%, TCS up by 1.21% and Infosys up by 0.93%.

On the flip side, HPCL down by 6.80%, Indian Oil Corporation down by 6.47%, BPCL down by 5.90%, Adani Ports & Special Economic Zone down by 2.65% and SBI down by 2.28% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 8.04 points or 0.43% to 1,869.02, Shanghai Composite increased 28.2 points or 0.88% to 3,218.52, Jakarta Composite increased 32.1 points or 0.51% to 6,357.92, Taiwan Weighted increased 52.68 points or 0.48% to 10,979.86 and Hang Seng increased 273.43 points or 0.89% to 31,002.17.

On the other hand, Nikkei 225 decreased 92.22 points or 0.42% to 21,702.10 and KOSPI Index decreased 5.34 points or 0.22% to 2,445.40.