Benchmarks trade lower amid weak global cues

Pressurized by somber global cues, Indian equity benchmark made pessimistic start, mirroring weak cues from global markets after the U.S. Federal Reserve sprang no surprises with its latest policy statement. Sentiments also remain dampened on report that India has slipped by three spots to eleventh position in the FDI Confidence Index 2018 released by American global management consulting firm AT Kearney. India falls by three spots, reversing its two-year streak of rising in the rankings. The report also said that India fell out of the top 10 for the first time since 2015. Traders shrugged off report that Economic growth in India is expected to strengthen to 7.3 percent in financial year 2018-19 on the back of robust activity from construction, manufacturing, and services sectors.

Global cues remained subdued with Asian markets are trading mostly in red at this point of time ahead of anxiously-awaited U.S.-China trade talks. The talks between US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are due to kick off later on Thursday, but a breakthrough deal is viewed as highly unlikely. The US markets ended lower on Wednesday after the Fed’s comments about inflation, which signaled that an interest rate hike is likely in June.

Back home, telecom stocks remained under pressure despite the government unveiling a new draft policy for the telecom sector branded as National Digital Communications Policy 2018 that proposes broadband access for all with 50 mbps speed, 5G services and 40 lakh new jobs in the sector by 2022. In scrip specific developments, Infosys gained on entering into partnership with Astound and Dabur India surged on reporting 19% rise in Q4 consolidated net profit.

The BSE Sensex is currently trading at 35122.70, down by 53.72 points or 0.15% after trading in a range of 35069.41 and 35257.31. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.52%, while Small cap index was down by 0.62%.

The few gaining sectoral indices on the BSE were Metal up by 0.52%, PSU up by 0.35%, Bankex was up by 0.32%, while Realty down by 1.05%, Industrials down by 0.91%, Capital Goods down by 0.86%, FMCG down by 0.79% and Power was down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.39%, ICICI Bank up by 1.32%, Adani Ports up by 1.23%, Yes Bank up by 1.12% and SBI up by 0.85%. On the flip side, Wipro down by 1.63%, Tata Motors - DVR down by 1.38%, Hindustan Unilever down by 1.29%, Tata Motors down by 1.16% and HDFC Bank down by 1.04% were the top losers.

Meanwhile, easing rules for investments from the foreign portfolio investors (FPIs), the Reserve Bank of India (RBI) has permitted them to invest in Treasury Bills or T-Bills issued by the Central Government. However, the FPIs will have to ensure that their exposure in government securities as well as corporate bonds of less than one year maturity shall not exceed 20 percent of total investment. It also asked the investors to bring down their total exposure in debt instruments (G-secs, state development loans or, corporate bonds) with one-year maturity to below 20 percent within six months.

The central bank has stated that the implementation date of online monitoring of utilisation of G-sec limits has been set as June 1, 2018. The requirement that investment in securities of any category with residual maturity below one year should not exceed 20 percent of total investment by an FPI in that category applies, on a continuous basis. It added that all securities with residual maturity of less than one year will be reckoned for the 20 percent limit, regardless of the maturity of the security at the time of purchase by the FPI.

The RBI further said that if there are investments in securities with less than one year residual maturity as on May 2, 2018, and it constitutes more than 20% of the total investment in any category, the FPI will have to bring such share below 20% within a period of six months from the date of the circular. Besides, it noted that the FPI should ensure that no further additions are made to the portfolio of securities with residual maturity of less than one year as on May 2, 2018.

The CNX Nifty is currently trading at 10690.65, down by 27.40 points or 0.26% after trading in a range of 10677.20 and 10720.60. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.35%, Bharti Infratel up by 2.31%, ICICI Bank up by 1.44%, Hindalco up by 1.16% and Zee Entertainment up by 1.12%. On the flip side, HCL Tech. down by 5.94%, Eicher Motors down by 2.40%, Cipla down by 1.70%, Wipro down by 1.63% and UPL down by 1.54% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 509.9 points or 1.66% to 30,213.98, Jakarta Composite tumbled 109.33 points or 1.82% to 5,902.91, Taiwan Weighted decreased 66.62 points or 0.63% to 10,552.19, KOSPI Index shed 11.05 points or 0.44% to 2,494.56 and Shanghai Composite was down by 4.86 points or 0.16% to 3,076.32. On the flip side, FTSE Bursa Malaysia KLCI was up by 2.78 points or 0.15% to 1,854.81.