Bourses off day’s low

Key Indian equity benchmarks trimmed some of their losses in late afternoon session to come off day’s low points, tracking firm European markets. Gains led by ITC, Vedanta and ONGC also helped the key indices to recover losses. However, trade remained in red with reports that the unemployment rate rose to a four-year high in 2016-17, when the government demonetised old currency notes, at the same time as more people joined the labour force looking for jobs. According to the findings of the Labour Bureau, the unemployment rate stood at 3.9 per cent, compared to 3.7 per cent in 2015-16 and 3.4 per cent in 2013-14. Adding more worries, the Annual Survey of Industries (ASI) showed that in 2016-17-the year in which high-value currency was scrapped-gross value added (GVA) by the industry grew at the slowest pace since the Narendra Modi government took over. GVA grew by 7.2 per cent at current prices in FY17, down from 9.3 per cent in FY16 and 9.4 per cent in FY15.

On the sectoral front, metal stocks were in focus, after India has sought consultations with the European Union (EU) under the aegis of WTO against a move of the 28-nation bloc to impose safeguard duties on certain steel products. The country has sought these consultations under WTO's Agreement on Safeguards, while select stocks of healthcare industry traded higher, as the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for establishment of three new AIIMS with an aim to boost Healthcare Infrastructure in the country. The establishment of new AIIMS will provide super speciality health care to the population.

On the global front, European markets were trading in green, even though French industrial production declined in November, defying expectations for a modest increase. The preliminary data from the statistical office INSEE showed that industrial production decreased a seasonally and working-day adjusted 1.3 percent, reversing a similar size increase in the previous month. Asian markets were also trading in green, after Federal Reserve Chairman Jerome Powell predicted no recession in 2019 and said the US central bank will be patient in determining when to hike interest rates. Fed Vice Chairman Richard Clarida also said the Fed could afford to take a wait-and-see stance on interest rates if headwinds to the economy from financial markets or global growth prove persistent.

The BSE Sensex is currently trading at 36018.39, down by 88.11 points or 0.24% after trading in a range of 35840.60 and 36214.26. There were 11 stocks advancing against 19 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.23%, while Small cap index was down by 0.13%.

The only gaining sectoral indices on the BSE were FMCG up by 0.50%, Metal up by 0.25% and Oil & Gas up by 0.16%, while Realty down by 1.17%, Capital Goods down by 1.12%, Telecom down by 0.97%, Industrials down by 0.90% and Auto down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.95%, Vedanta up by 0.90%, ONGC up by 0.80%, HCL Tech. up by 0.49% and Infosys up by 0.40%. On the flip side, Tata Motors down by 2.80%, Indusind Bank down by 2.45%, TCS down by 2.43%, Tata Motors - DVR down by 2.35% and Larsen & Toubro down by 1.78% were the top losers.

Meanwhile, in order to boost outbound shipments, the Engineering Exports Promotion Council (EEPC) India has said that the Reserve Bank of India (RBI) and the government need to ensure timely and affordable bank credit for exporters. The industry body also pointed towards falling bank credit deployment.

The EEPC said ‘Against a gross credit deployment of Rs 434 billion (Rs 43,400 crore) till October-end 2017, the figure dropped 54.6 percent year-on-year to Rs 197 billion (Rs 19,700 crore) in 2018.’ Further, EEPC India Chairman Ravi Sehgal underlined subdued flow of credit seen in the engineering segment. He expressed need to address the situation sooner than later, terming credit as the lifeline of the industry and exporters.

Besides, Sehgal noted that while several global factors such as trade war between the US and China and uncertainties over Brexit are hitting the export demand, the cost of credit remains a big concern for exporters. He also said that exporters are facing many problems in the wake of RBI's instructions to banks to not to honour shipping bills older than two years under the Export Data Processing and Monitoring System.

The CNX Nifty is currently trading at 10784.95, down by 36.65 points or 0.34% after trading in a range of 10739.40 and 10850.15. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were ITC up by 2.05%, UPL up by 1.31%, Hindalco up by 1.08%, Indian Oil Corporation up by 1.08% and ONGC up by 0.98%. On the flip side, Tata Motors down by 3.04%, Indusind Bank down by 2.67%, Bharti Infratel down by 2.54%, TCS down by 2.52% and Larsen & Toubro down by 2.01% were the top losers.

Asian markets were trading in green; Nikkei 225 surged 195.90 points or 0.97% to 20,359.70, Hang Seng increased 145.84 points or 0.55% to 26,667.27, KOSPI rose 12.29 points or 0.6% to 2,075.57, Jakarta Composite soared 32.75 points or 0.52% to 6,361.46, Taiwan Weighted strengthened 38.71 points or 0.4% to 9,759.40, Shanghai Composite gained 18.73 points or 0.74% to 2,553.83 and Straits Times was up by 16.79 points or 0.53% to 3,200.30.

All European markets were trading in green; UK’s FTSE 100 gained 58.20 points or 0.84% to 7,001.07, France’s CAC increased 11.82 points or 0.25% to 4,817.48 and Germany’s DAX was up by 24.75 points or 0.23% to 10,946.34.