Local equities trim some early losses

Local equity benchmarks trimmed most of the early losses in morning session and continued their trade just below the neutral lines. Both, Sensex and Nifty were trading around their crucial 35,200 and 10,600 marks, respectively. Traders took some support from Finance Minister Arun Jaitley’s statement that demonetisation helped in tackling black money and expanding the tax base. Demonitisation is a key step in a chain of important decisions taken by the Government to formalise the economy. However, traders remained cautious with Moody’s Investors Service’s report that Indian economy will expand 7.4% in 2018, but the growth will slow down to 7.3 per cent in the next year as domestic demand tapers on higher borrowing cost due to rising interest rates. Some pessimism also came with Centre for Monitoring Indian Economy (CMIE) data report showing that the unemployment rate in the country was recorded at 6.9% in October 2018, highest in 2 years. The number was 6.75% in October last year.

On the global front, Asian markets were trading in red, as investors took their foot off the pedal at the end of a broadly positive week, while the dollar strengthened after the Federal Reserve flagged more interest rate hikes down the line. Back on domestic turf, in scrip specific development, Bharat Financial Inclusion soared on completing 4th securitization transaction in FY19. Besides, Strides Pharma Science surged with arm entering into agreement with SUDA Pharma.

The BSE Sensex is currently trading at 35202.58, down by 35.10 points or 0.10% after trading in a range of 35011.23 and 35278.91. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.50%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.79%, Consumer Disc up by 0.54%, Consumer Durables up by 0.54%, Industrials up by 0.42% and Auto was up by 0.42%, while Metal down by 0.97%, Telecom down by 0.91%, TECK down by 0.89%, IT down by 0.87% and Basic Materials was down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.61%, Asian Paints up by 2.83%, Sun Pharma up by 2.12%, Adani Ports up by 2.08% and Hero MotoCorp was up by 1.63%. On the flip side, Bharti Airtel down by 2.94%, Wipro down by 1.94%, Infosys down by 1.76%, Tata Steel down by 1.67% and Kotak Mahindra Bank was down by 0.99% were the top losers.

Meanwhile, amid liquidity squeeze and concerns over availability of funds, the Reserve Bank of India (RBI) has relaxed the norms governing foreign borrowings for infrastructure creation in consultation with the Government. The minimum average maturity requirement for ECBs (external commercial borrowings) in the infrastructure space raised by eligible borrowers has been reduced to three years from five years earlier.

Additionally, the average maturity requirement for mandatory hedging has been reduced to five years from earlier ten years. The move comes amid concerns surrounding the availability of funds following a liquidity squeeze and the difficulties being faced by non-bank lenders, especially those facing asset liability issues due to heavy reliance on short term funding for long term assets.

The government has been unequivocal in suggesting remedial measures which will address the needs of the economy. Besides, the relaxations in the ECB norms follow other moves by the RBI, including permission to banks to use credit enhancement to help Non-Banking Financial Companies (NBFCs) raise medium to long term funds.

The CNX Nifty is currently trading at 10593.65, down by 4.75 points or 0.04% after trading in a range of 10544.85 and 10614.70. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were HPCL up by 4.49%, Yes Bank up by 3.59%, Asian Paints up by 3.25%, Indian Oil Corporation up by 2.16% and BPCL was up by 2.08%. On the flip side, Bharti Airtel down by 2.97%, JSW Steel down by 2.39%, Wipro down by 1.95%, Infosys down by 1.86% and Tata Steel was down by 1.82% were the top losers.

All Asian markets were trading in red, KOSPI slipped 5.92 points or 0.28% to 2,086.71, Nikkei 225 dropped 213.48 points or 0.96% to 22,273.44, Jakarta Composite declined 86.69 points or 1.47% to 5,890.12, Hang Seng fell 586.82 points or 2.29% to 25,640.90, Shanghai Composite decreased 34.11 points or 1.31% to 2,601.52, Straits Times lost 23.85 points or 0.78% to 3,069.39 and Taiwan Weighted was down by 111.48 points or 1.13% to 9,833.83.