Weakness continues on Dalal Street in early noon deals

Indian equity benchmarks continued to trade sluggish in early afternoon deals with traders remained concerned as the situation in the Middle East still fluid. Traders failed to get any sense of relief with a report that the Wholesale Price Index (WPI)-based inflation came in at 2.47 per cent for March 2018, the lowest since July 2017. In February this year, WPI inflation had come in at 2.48 per cent. The market participants remained concerned with a report stating that India’s merchandise exports fell for the first time in five months in March and the trade deficit widened amid concerns over global trade and US moves to review a programme allowing duty-free imports of goods.

Selling in software pack too dampened sentiments with Infosys trading lower by over three percent after IT major said its earnings before interest and tax (EBIT) will grew 22-24% for 2018-19 (FY19) as compared to 24.3% achieved in FY18. The company expects revenue for FY19 to grow in the range of 6-8% in constant currency (CC) terms and 7-9% in US dollar terms. Meanwhile, Infosys reported net profit of Rs 36.90 million for January-March quarter (Q4FY18), which were in line with Street’s expectation. However, losses remained capped as traders were taking some solace with the private report stating Goods and Services Tax (GST) collections are expected to bounce back to Rs 93,000 - Rs 95,000 crore, and perhaps more, when returns for March 2018 are filed by April 20. This is against the average of about Rs 87,000 crore in the past five months.

The BSE Sensex is currently trading at 34125.60, down by 67.05 points or 0.20% after trading in a range of 33899.34 and 34169.29. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.08%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.92%, Realty up by 0.65%, FMCG up by 0.44%, Basic Materials up by 0.16% and Capital Goods up by 0.12%, while IT down by 0.81%, Energy down by 0.80%, Oil & Gas down by 0.80%, TECK down by 0.71% and Consumer Durables was down by 0.68% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 0.95%, TCS up by 0.87%, ITC up by 0.84%, Hero MotoCorp up by 0.82% and Bajaj Auto up by 0.80%. On the flip side, Tata Motors - DVR down by 4.54%, Tata Motors down by 4.14%, Infosys down by 3.21%, Axis Bank down by 1.59% and Tata Steel down by 1.20% were the top losers.

Meanwhile, Asian Development Bank (ADB) has said India will able to attain a growth of 8 percent in a significant manner if the country is able to reframe its investment parameter and make its exports competitive. Efforts will also have to be made to rationalize agriculture marketing as this is the area where there is scope for more reforms. Earlier, ADB in its Asian Development Outlook, 2018 expects India’s growth to pick up to 7.3 per cent in current fiscal and accelerate further to 7.6 per cent in the next financial year.

Referring to exports, ADB said India is still a marginal player in global trade and there is a lot of potential to increase exports. While mentioning investments, ADB said credit to infrastructure and industry is rising, which is a constructive signal. But clearly a lot more needs to be done if the investment has to pick up. In addition, ADB elaborated on the reform scope in farm sector that the government could revamp the Agricultural Produce Market Committee (APMC) Act and restructure the farm supply chain for free movement of goods.

ADB said India can even achieve double digit growth but only if it can do that over a longer term period given the state of infrastructure and regulatory policies. Moreover, a lot more reforms would probably be needed for that as well. Moreover, India can reap benefits by improving competitiveness, as Chinese exports are becoming expensive because of rising wages. For that, India needs to improve its Ease of Doing Business and state of infra to benefit from trade and be better integrated into the value chain.

The CNX Nifty is currently trading at 10469.85, down by 10.75 points or 0.10% after trading in a range of 10396.35 and 10477.65. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Cipla up by 3.92%, Grasim Industries up by 2.94%, Lupin up by 1.77%, Indiabulls Housing Finance up by 1.43% and Tech Mahindra up by 1.23%. On the flip side, Tata Motors down by 4.34%, Infosys down by 3.44%, Axis Bank down by 1.95%, HPCL down by 1.32% and Vedanta down by 1.29% were the top losers.

Asian markets are trading mixed; KOSPI Index gained 2.42 points or 0.1% to 2,457.49, FTSE Bursa Malaysia KLCI rose 2.81 points or 0.15% to 1,871.28, Jakarta Composite increased 24.64 points or 0.39% to 6,294.97 and Nikkei 225 was up by 56.79 points or 0.26% to 21,835.53.

On the flip side, Hang Seng decreased 504.64 points or 1.64% to 30,303.74, Shanghai Composite declined 53.49 points or 1.69% to 3,105.57 and Taiwan Weighted was down by 10.84 points or 0.1% to 10,954.55.