Benchmarks trade lower in early deals; Sensex slips below 35,800 mark

Indian equity benchmarks made a cautious start and are trading with a cut of one third of a percent in early deals on Friday, tracking weakness in other Asian markets. Sentiments remained downbeat with the economic research wing of SBI stating that it is erroneous to come to a conclusion of heightened economic activity using the jump in currency in circulation (CIC). It estimated that cash in the economy at Rs 20.4 lakh crore, stressing the rural economy continues to be depressed. It pointed out to data from leading indicators, including passenger car sales, commercial vehicle sales and two wheeler sales, among others, which shows a dip in activity, to point out that the higher CIC does not suggest a jump in economic activity. Traders failed to get any sense of relief with Chief Economic Adviser K V Subramanian’s statement that the economic growth is expected to accelerate to 7.5% in next financial year (FY20), from 7.2% projected for the current financial year (FY19). He further stated in the last four years the GDP growth rate has been 7.3% that was highest across all government since liberalisation.

Global cues too remained choppy with all the Asian counters are trading in red at this point of time after grim US retail sales figures raised fresh doubts about the strength of the US economy, offsetting optimism on trade talks between the United States and China. The US markets settled mostly in red on Thursday on account of weak retail sales data.  US retail sales fell by 1.2% in December, the largest single-month decline since 2009.

Back home, real estate sector stocks remained in focus with Finance Minister Piyush Goyal’s statement that the government is considering giving relief to the real estate sector and the next GST Council meeting could take some steps to address their issues even as he asked the banks to meet the realty sector on stalled projects in two weeks. In scrip specific developments, Sadbhav Engineering surged despite reporting 9% fall in Q3 net profit, though Glenmark Pharmaceuticals edged lower despite reporting 11% rise in Q3 consolidated net profit.

The BSE Sensex is currently trading at 35766.77, down by 109.45 points or 0.31% after trading in a range of 35749.42 and 36022.57. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.62%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Utilities up by 1.50%, Oil & Gas up by 1.35%, Power up by 1.27%, PSU up by 0.88% and Capital Goods up by 0.40%, while Healthcare down by 1.66%, Metal down by 0.98%, Auto down by 0.97%, Consumer Durables down by 0.85% and Basic Materials down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 5.45%, NTPC up by 2.87%, Power Grid Corporation up by 2.69%, Coal India up by 1.20% and Larsen & Toubro up by 1.00%. On the flip side, Sun Pharma down by 2.81%, Hero MotoCorp down by 2.22%, Mahindra & Mahindra down by 2.03%, Tata Motors down by 1.72% and Vedanta down by 1.68% were the top losers.

Meanwhile, Chief Economic Adviser K V Subramanian has said that the economic growth is expected to accelerate to 7.5% in next financial year (FY20), from 7.2% projected for the current financial year (FY19). He mentioned ‘We have done the projections. All the external agencies and internally our estimates are also 7.5% (2019-20). The nominal rate we are expecting is 11.5% and inflation of about 4%.’

He further stated in the last four years the GDP growth rate has been 7.3% that was highest across all government since liberalisation. This growth rate has been achieved amidst very low inflation. He also added that the significant reduction in inflation came on account of setting up of Monetary Policy framework that mandates the RBI to keep it within a particular band. Prior to 2014, the average inflation was in excess of 10%. Monetary Policy Committee, the interest rate setting body, has been given objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2 per cent, while supporting growth.

Besides, on fiscal deficit, he said the deficit has been secularly coming down and India is on the glide path to achieving the target set under the Fiscal Responsibility and Budget Management (FRBM) Act. The Budget pegs fiscal deficit to be at 3.4% of the GDP for FY20.

The CNX Nifty is currently trading at 10708.05, down by 38.00 points or 0.35% after trading in a range of 10700.45 and 10785.75. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were ONGC up by 5.07%, NTPC up by 2.70%, Power Grid Corporation up by 2.66%, BPCL up by 2.33% and GAIL India up by 1.83%. On the flip side, Sun Pharma down by 2.96%, JSW Steel down by 2.90%, Hero MotoCorp down by 2.13%, Titan Company down by 2.01% and Mahindra & Mahindra down by 1.99% were the top losers.

All the Asian markets are trading in red; NIKKEI 225 declined 262.34 points or 1.24% to 20,877.37, Straits Times slipped 12.24 points or 0.38% to 3,240.92, Hang Seng fell 467.62 points or 1.64% to 27,964.43, Taiwan Weighted shed 8.77 points or 0.09% to 10,080.24, KOSPI dropped 32.10 points or 1.44% to 2,193.75, Jakarta Composite dipped 22.62 points or 0.35% to 6,397.40 and Shanghai Composite was down by 16.87 points or 0.62% to 2,702.83.