Benchmarks make cautious start ahead of RBI meeting outcome

Indian equity benchmarks made a cautious start and are trading slightly in red in early deals on Tuesday, as traders remained on the sidelines ahead of Reserve Bank of India’s (RBI’s) second bi-monthly monetary policy outcome for 2018-19, due on June 6. Investors also remained cautious ahead of services sector data for May slated to be released later in the day. Market participants paid no heed towards report that as many as 16 projects, including setting up of a cold chain in Madhya Pradesh, were approved under by a commerce ministry scheme to develop infrastructure for promoting exports. Traders also failed to get any sense of relief with report that markets regulator SEBI has drastically slashed the additional expense charged by mutual funds to just 5 basis points to help increase the penetration of such products among investors. The move will help reduce the cost of investing in MFs and industry players believe that it may result in lower commissions for distributors.

On the global front, Asian markets are exhibiting mixed trend at this point of time, as trade concerns continued to linger ahead of the G-7 meeting later in the week. The US markets ended higher on Monday as traders continued to react positively to the release of better than expected employment data last Friday.

Back home, most of the sugar stocks remained in sweet spot on report that Centre is expected to announce a fresh package of almost Rs 8000 crore to bail out the sugar sector. This will be in addition to the financial assistance of Rs 5.50 per quintal of sugarcane announced a few weeks ago, costing over Rs 1500 crore. In scrip specific developments, Idea Cellular rang loud on getting nod to increase FDI limit to 100% and Lupin edged higher on receiving final approval for Nystatin and Triamcinolone Acetonide Cream USP.

The BSE Sensex is currently trading at 34948.14, down by 63.75 points or 0.18% after trading in a range of 34903.58 and 35073.12. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.17%, while Small cap index was down by 1.01%.

The few gaining sectoral indices on the BSE were Energy up by 0.16%, Auto up by 0.07% and FMCG was up by 0.04%, while Telecom down by 1.72%, Power down by 1.72%, Utilities down by 1.47%, Capital Goods down by 1.29% and Industrials was down by 1.09% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 0.84%, Maruti Suzuki up by 0.70%, Indusind Bank up by 0.68%, Wipro up by 0.56% and HDFC Bank up by 0.46%. On the flip side, Power Grid Corporation down by 3.12%, Dr. Reddys Lab down by 1.60%, Larsen & Toubro down by 1.54%, Yes Bank down by 1.46% and Bharti Airtel down by 1.36% were the top losers.

Meanwhile, in order to promote India’s exports including improving export related infrastructure, the commerce ministry is taking several steps. In the same direction, the ministry has given green signal to as many as 15 projects, including setting up of a cold chain in Madhya Pradesh. It has approved these projects under its Trade Infrastructure for Export Scheme (TIES) which was launched to create appropriate infrastructure for development and growth of exports through engagement of central or state agencies. It said that out of the total scheme outlay of Rs 600 crore, Rs 80 crore was provided in 2017-18 and the same amount will be provided during the current fiscal also and the scheme has been launched for three years to 2020.

The approved projects include setting up of an integrated cargo terminal at Imphal international airport; establishment of trade promotion centre in Bhopal; solid waste management system at Noida SEZ; and construction of office cum laboratory complex of export inspection agency at Vishakhapatnam. The implementing agencies of these projects include Karnataka Fisheries Development Corporation; Visvesvaraya Trade Promotion Centre, Bengaluru; Cochin SEZ; Airport Authority of India, Coffee Board, Exports Inspection Council and Andhra Pradesh Med Tech Zone (AMTZ).

Unlike Assistance to States for Development of Export Infrastructure and Allied Activities (ASIDE) Scheme, which was funded by the Centre, the cost of projects under TIES are equally shared between the Centre and the states. The central and state agencies, including Export Promotion Councils, Commodities Boards, SEZ authorities and apex trade bodies are eligible for financial support under the scheme. The Central government funding will be in the form of grant-in-aid, normally not more than the equity being put in by the implementing agency or 50% of the total equity in the project.

The CNX Nifty is currently trading at 10598.65, down by 29.85 points or 0.28% after trading in a range of 10589.70 and 10633.15. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.90%, Bajaj Finance up by 1.19%, Bajaj Finserv up by 0.73%, Reliance Industries up by 0.71% and Maruti Suzuki up by 0.69%. On the flip side, Power Grid Corporation down by 3.10%, Indiabulls Housing down by 2.38%, Zee Entertainment down by 1.97%, Dr. Reddys Lab down by 1.55% and Bharti Airtel down by 1.49% were the top losers.

Asian markets are trading mixed; Shanghai Composite increased 7.15 points or 0.23% to 3,098.34, Nikkei 225 rose 7.23 points or 0.03% to 22,483.17, Hang Seng added 48.56 points or 0.16% to 31,046.54 and Jakarta Composite was up by 54.66 points or 0.91% to 6,069.48.

On the flip side, Taiwan Weighted decreased 42.18 points or 0.38% to 11,067.32, FTSE Bursa Malaysia KLCI dropped 5.47 points or 0.31% to 1,749.70 and KOSPI Index was down by 3.27 points or 0.13% to 2,444.49.