Benchmarks trade lower in early deals on the first day of New Year

Indian equity benchmarks are trading lower in early deals on the first day of the New Year 2019 amid lack of supportive triggers as most of the Asian peers are closed. Traders remain concerned with the commerce ministry’s data showing that eight core industries grew at its slowest pace in 16 months at 3.5% in November due to fall in output of crude oil and fertilizers. Core sector growth was 6.9 percent in November 2017. Some cautiousness also persisted with policy advocacy body US-India Strategic Partnership Forum (USISPF) saying that India’s recent changes in e-commerce foreign direct investment (FDI) rules show a lack of predictability in the regulatory environment and could add to the long list of trade issues that the country is trying to resolve with the United States.

On the global front, most of the Asian counters remained shut on account of the New Year holiday. The US markets ended higher on Monday taking support with comments from President Donald Trump expressing optimism about a US-China trade deal.

Back home, banking sector stocks are trading lower despite the Governor Shaktikanta Das’ statement that the banking sector is on course to recovery as the afflicting non-performing assets recede, but state-run lenders need reforms in governance. He pointed out that the period till September has seen a decline in gross NPA ratios - the first such dip in three years - and also pointed out at improving provision coverage ratio, which is the ability of a bank to withstand stress, as a positive. Stocks related to steel sector edged lower despite ICRA’s report that the domestic steel consumption growth is expected to grow by 7% during this fiscal and the trend is likely to continue in the next financial year as well, largely driven by the government’s focus on the infrastructure sector.

The BSE Sensex is currently trading at 35943.77, down by 124.56 points or 0.35% after trading in a range of 35932.77 and 36224.00. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.14%, while Small cap index was up by 0.07%.

The few gaining sectoral indices on the BSE were Telecom up by 0.66%, Realty up by 0.55% and Healthcare was up by 0.35%, while Metal down by 0.79%, Auto down by 0.42%, Utilities down by 0.37%, PSU down by 0.36% and Consumer Disc was down by 0.34% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.43%, Yes Bank up by 1.18%, Axis Bank up by 1.07%, Bharti Airtel up by 0.88% and TCS up by 0.29%. On the flip side, Indusind Bank down by 1.19%, Power Grid Corporation down by 1.16%, Mahindra & Mahindra down by 0.91%, Vedanta down by 0.84% and Asian Paints down by 0.79% were the top losers.

Meanwhile, expressing optimism over fiscal position of India, the Finance Ministry has said in order to ensure that the fiscal deficit remains within the target of 3.3% of the Gross Domestic Product (GDP) for 2018-19, the government is closely monitoring the macroeconomic conditions.

The Ministry has directed ministries and departments to meet their additional requirements of funds from savings and keep their expenditure within the amount earmarked in the Budget for 2018-19. It further said the efforts were being made to achieve the target for non-debt receipts as well as tax receipts.

Referring to the deviations, it said non-debt receipts have marginally deviated from their mid-year benchmark of 40% of Budget Estimates (BE). Total expenditure in first half 2018-19 (H1FY19) is 53.4% of BE which is 0.1% lower than corresponding period and 2.7% higher than five years' moving average. Net tax revenue in H1FY19 is 39.4% of BE but in comparison to past trend, it is 4.8% below corresponding period and 0.4% above five years' moving average.

The CNX Nifty is currently trading at 10822.30, down by 40.25 points or 0.37% after trading in a range of 10821.40 and 10885.30. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.46%, Axis Bank up by 1.19%, Yes Bank up by 1.16%, Bharti Airtel up by 0.96% and UPL up by 0.36%. On the flip side, Hindalco down by 1.55%, Indusind Bank down by 1.39%, Indiabulls Housing down by 1.35%, Mahindra & Mahindra down by 1.05% and Kotak Mahindra Bank down by 0.92% were the top losers.