Bourses settle flat with negative bias

Key equity bourses settled Wednesday’s session almost flat with negative bias. Start of the trading session was cheerful, as the Reserve Bank of India (RBI) said that it will inject Rs 37,500 crore into the system through the purchase of government securities in February to increase liquidity. The RBI also said it has been monitoring the evolving liquidity conditions and durable liquidity requirements of the system. In early deals, traders were seen taking encouragement with Commerce and Industry Minister Suresh Prabhu’s statement that India is optimally leveraging digital technologies to offer various services for citizens and is poised to take full advantage of new generation of technological advancements. He said that digital technologies are advancing and becoming all pervasive. Some relief also came with credit rating agency, ICRA’s report stating that while the number of insolvency cases are expected to pile up over the next few quarters, timely conclusion of cases within the law mandated 180-270 days can free up as much as Rs 67,000 crore to the system.

However, the markets soon turned volatile to end the lackluster day in negative terrain, as anxiety spread among the investors after S&P Global Ratings warned that corporate activities which are designed to support the Indian government's budgetary coffers -- such as share buyback -- by public sector undertakings (PSUs) are credit negative for such entities. Some concern also came with a report that the United States and China launch a critical round of trade talks amid deep differences over US demands for structural economic reforms from Beijing that will make it difficult to reach a deal before a March 2 US tariff hike. Positive opening of European markets failed to give support to the Indian markets. The market participants paid no heed towards the annual index releasing by an anti-graft watchdog that India has improved its ranking on a global corruption index in 2018, while its neighbour China lagged far behind.

On the global front, European markets were trading in green, as the survey data from the GfK showed that Germany's consumer confidence is set to improve in February, defying expectations for a modest easing. The forward-looking GfK consumer confidence indicator for February rose to 10.8 from a revised 10.5 in January. Income expectations and propensity to buy improved further, while households assessed the general economic outlook less optimistically for a fourth straight month. Separately, France's economic growth remained steady in the fourth quarter of 2018, supported by foreign trade, while domestic demand slowed, amid disruptions to activity caused by the yellow vests protests. Gross domestic product grew 0.3 percent quarter-on-quarter, same as in the third quarter. Asian markets ended mixed, following the mixed cues overnight from Wall Street. Investors were cautious ahead of the start of US-China trade talks and the US Federal Reserve's monetary policy decision due later in the day.

Back home, Auto Parts & Equipment companies stocks ended higher, as the government slashed customs duty on import of parts and components for electric vehicles (EVs). The customs duty has been lowered to 10-15 per cent from 15-30 per cent. Banking sector stocks also ended in green with SBI in its Ecowrap report stating that Public sector banks (PSBs) will require another Rs 50,000 crore fund infusion in 2019-20 to help enable credit growth of 11 per cent. Further, Gems and Jewellery industry stocks remained in focus, amid reports that gems and jewellery has sought reduction of gold import duty to 4 per cent, cut and polished diamonds and cut and polished gem stones to its 2.5 per cent and relaxation of credit norms for working capital requirements in the forthcoming budget.

Finally, the BSE Sensex lost 1.25 points to 35,591.25, while the CNX Nifty was down by 0.40 points to 10,651.80.

The BSE Sensex touched a high and a low of 35850.41 and 35490.97, respectively and there were 15 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.22%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Metal up by 1.89%, Bankex up by 1.36%, Basic Materials up by 1.21%, Capital Goods up by 1.18% and Industrials up by 0.72%, while Telecom down by 1.26%, Energy down by 1.05%, FMCG down by 0.96%, Oil & Gas down by 0.85% and Realty down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 5.29%, Tata Steel up by 5.14%, Axis Bank up by 4.56%, Bajaj Finance up by 3.36% and HCL Tech. up by 2.82%. On the flip side, Bajaj Auto down by 2.65%, Kotak Mahindra Bank down by 2.35%, HDFC down by 1.74%, Yes Bank down by 1.58% and ITC down by 1.35% were the top losers.

Meanwhile, with an aim to produce more scrap, Union Steel Minister Chaudhary Birender Singh has said the government is formulating a draft National Scrap Policy. At present, the nation’s requirement of scrap is round 8.3 million tonne (MT) and a big portion of the requirement is met via imports. The minister mentioned that a National Scrap Policy is being drafted which will be ready in a few months. This will make available nearly 7 MT scrap in the country. Steel produced out of scrap is of good quality and is environment friendly.

Singh had earlier said in order to augment the country's production capacity the government is also planning to set up scrap-based steel plants in north and west parts of India. Stressing that the scrap-based steel plants are environment-friendly, energy-efficient and cost effective, he said these plants would be on the lines of 'melt and manufacture' steel technology used in the US.

He had also mentioned India imports around six million tonne of scrap steel every year and is the second-largest importer of scrap after Turkey, adding that by 2025, the country will be able to generate 7.5 million tonne of scrap every year. He had said ‘I would like you to deliberate on the cost-benefit analysis of setting up scrap-based steel plants in north and west India. These regions are important from the perspective of scrap-availability and steel import hubs. The plants will have the capability to produce special high-grade steels, a pre-requisite for 'Make in Steel’.

The CNX Nifty traded in a range of 10,710.20 and 10,612.85. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 6.21%, Tata Steel up by 5.61%, Axis Bank up by 4.58%, Hindalco up by 2.91% and HCL up by 2.81%. On the flip side, Indiabulls Housing Finance down by 4.81%, Adani Ports & SEZ down by 3.22%, Bajaj Auto down by 2.95%, Kotak Mahindra Bank down by 2.59% and Bharti Infratel down by 2.49% were the top losers.

European markets were trading in green; UK’s FTSE 100 gained 86.83 points or 1.29% to 6,833.93, France’s CAC added 39.60 points or 0.81% to 4,928.18 and Germany’s DAX was up by 8.52 points or 0.08% to 11,218.83.

Asian markets ended mixed on Wednesday as strong earnings from US industrial giant 3M Co as well as comments from Apple's chief that US-China trade tensions were easing helped investors put growth and trade worries on the back burner. Oil prices edged up on concerns about supply disruptions after the United States imposed sanctions on state-owned Venezuelan oil company PDVSA. While, the dollar index dipped slightly ahead of the Fed's policy statement while the British pound nursed losses after British lawmakers rejected most amendments that sought to avoid Britain leaving the European Union without a deal. Chinese shares ended lower as investors awaited the conclusion of a Federal Reserve policy meeting and US-China talks. China's Vice Premier Liu He is in Washington this week to meet US officials, including President Trump. Japanese shares closed down on earnings concerns after drugmaker Dainippon Sumitomo Pharma said a clinical trial for a new drug failed to complete.