Benchmarks make pessimistic start on feeble global cues

Indian equity benchmarks made a pessimistic start and are trading with a cut of one third of a percent in early deals on Friday amid weak global cues as investors await the U.S. jobs report due later in the day for directional cues. Traders failed to take any sense of relief with report that private equity and venture capital investments in India reached $7.9 billion across 180 deals in January-March this year, the best first quarter since 2008, mainly driven by large transactions. Market participants shrugged off report that China has removed import duties on as many as 28 medicines, including all cancer drugs, from May 1, a move which would help India to export these pharmaceuticals to the neighbouring country.

Global cues remained sluggish with Asian markets trading mostly in red, with Japanese markets closed for a public holiday, as investors awaited the April jobs report out of the U.S. The US markets ended mostly lower on Thursday as investors fretted about the outcome of Sino-U.S. trade talks and a report on service sector activity disappointed.

Back home, ratings agency ICRA said that the high quantum of impaired assets will restrict the credit growth for fiscal 2018-19 to 8 percent, and India Inc will borrow more from cheaper sources abroad. External commercial borrowings (ECBs) will go up to $27-32 billions on the back of relaxed norms announced by the RBI and the high rate of borrowing domestically. In scrip specific developments, J Kumar Infraprojects gained on receiving two LoAs worth Rs 446 crore and Bharti Airtel advanced on adding 84.02 lakh subscribers in March.

The BSE Sensex is currently trading at 34989.62, down by 113.52 points or 0.32% after trading in a range of 34977.12 and 35206.55. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.10%, while Small cap index up by 0.04%.

The top gaining sectoral indices on the BSE were Realty up by 0.75%, Telecom up by 0.58%, Industrials up by 0.24%, Capital Goods up by 0.18% and PSU was up by 0.05%, while Metal down by 1.03%, IT down by 0.94%, Energy down by 0.76%, Oil & Gas down by 0.64% and TECK was down by 0.59% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.03%, Adani Ports up by 1.68%, ONGC up by 1.16%, Indusind Bank up by 0.55% and SBI up by 0.50%. On the flip side, Asian Paints down by 1.86%, Infosys down by 1.73%, Sun Pharma down by 1.64%, Wipro down by 1.52% and Bajaj Auto down by 1.23% were the top losers.

Meanwhile, the government has come out with a draft new telecom policy which aims to rationalise levies, including spectrum charges to rejuvenate the debt-ridden telecom sector. Apart from this, it also proposes to give broadband access to all with 50 mbps speed, 5G services and create 40 lakh new jobs in the sector by 2022. The draft policy branded as 'National Digital Communications Policy 2018' also aims to attract $100 billion in the digital communications sector by 2022 with help of regulatory reforms and enhance the contribution of digital communications to 8% of India’s GDP from about 6% in 2017.

Under the new policy, the government aims to enable fixed line broadband access to 50 percent of households and start landline portability services. It also proposes to adopt ‘Optimal Pricing of Spectrum’ to ensure sustainable and affordable access to digital communications. High spectrum price and related charges have been main concern of telecom services segment which is reeling under a debt of around Rs 7.8 lakh crore.

Additionally, the draft policy proposes recognising of mid-band spectrum, particularly the 3 GHz to 24 GHz range, for next-generation networks. It also promises to remove regulatory barriers and reduce the regulatory burden that hampers investments, innovation and consumer interest. Besides, it proposed to rationalise taxes and levies on digital communications equipment, infrastructure and services.

The CNX Nifty is currently trading at 10641.25, down by 38.40 points or 0.36% after trading in a range of 10632.95 and 10700.45. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 2.05%, Bharti Airtel up by 1.90%, ONGC up by 1.41%, Hindustan Unilever up by 0.62% and Indusind Bank up by 0.58%. On the flip side, Asian Paints down by 2.13%, Sun Pharma down by 2.01%, Wipro down by 2.01%, Infosys down by 1.83% and Bajaj Auto down by 1.63% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 104.96 points or 0.35% to 30,208.41, Jakarta Composite declined 48.1 points or 0.82% to 5,810.63, KOSPI Index shed 18.23 points or 0.73% to 2,469.02, FTSE Bursa Malaysia KLCI slipped 6.42 points or 0.35% to 1,845.38 and Shanghai Composite was down by 3.84 points or 0.12% to 3,097.02. On the flip side, Taiwan Weighted was up by 24.84 points or 0.24% to 10,539.02.