Local equities continue to trade sluggish

Local equity benchmarks continued trade sluggish in morning session, with losses of around half a percent. Healthcare, Auto and Metal witnessed notable losses, while Power and Oil & Gas sectors edged higher. Markets remained under pressure as the economic research wing of SBI stated 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. Investors paid no heed to a private report which stated that India and US pledged to further boost bilateral trade and investments, as key policymakers and industrialists of both the sides huddled for a commercial dialogue and CEO forum meeting here. Traders failed to get any sense of relief from Chief Economic Adviser K V Subramanian’s statement the economic growth is likely to accelerate to 7.5% in 2019-20, from 7.2% projected for the current fiscal. The nominal rate we are expecting is 11.5% and inflation of about 4%. Meanwhile, a report stated that an expert committee set up by the government has recommended setting the minimum wage at Rs 375 a day, higher than the existing rate of Rs 321 for agriculture or unskilled workers and Rs 371 for semi-skilled workers.

On the global front, Asian markets were trading in red, tracking a weak Wall Street session as traders awaited the conclusion of US-China talks in Beijing. Back home, on the sectoral front, Sugar mill industries stocks were in focus, as a report that Sugar mills cannot sell the sweetener below Rs 31 per kg, a move that will boost the liquidity of cash-strapped millers and help clear mounting cane arrears of around Rs 20,000 crore.

The BSE Sensex is currently trading at 35714.60, down by 161.62 points or 0.45% after trading in a range of 35714.59 and 36022.57. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.97%, while Small cap index was down by 0.31%.

The top gaining sectoral indices on the BSE were Utilities up by 1.95%, Power up by 1.71%, Oil & Gas up by 1.65%, PSU up by 1.13% and Capital Goods was up by 0.67%, while Healthcare down by 2.54%, Auto down by 1.22%, Metal down by 1.20%, Consumer Durables down by 1.19% and Basic Materials was down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 5.98%, NTPC up by 3.75%, Power Grid up by 3.20%, Larsen & Toubro up by 1.61% and Coal India was up by 1.52%. On the flip side, Sun Pharma down by 3.32%, Tata Motors down by 2.29%, Hero MotoCorp down by 2.08%, Tata Steel down by 1.97% and Mahindra & Mahindra was down by 1.96% were the top losers.

Meanwhile, in order to resolve the funding crunch faced by the real estate sector, Finance Minister Piyush Goyal has asked banks to hold a meeting with real estate players within the next fortnight and come out with innovative ways. He said that banks should take some initiatives to assess projects and fast track genuine ones.  He further stated that within the next 7-15 days the Indian Banks’ Association (IBA) has a meeting with the real estate players to help increase funding to the sector.

Moreover, the minister said the government had announced a number of measures in the interim Budget to push growth in real estate sector. The sector has been facing funding issues post the default on debt papers by Infrastructure Leasing & Financial Services (IL&FS), which choked lending for the sector as a whole.

Besides, he indicated a relief to the estate sector in the upcoming goods and services tax (GST) council meeting. He added that government is reviewing the GST structure for the sector.  GST Council is likely to meet next on February 20.

The CNX Nifty is currently trading at 10681.95, down by 64.10 points or 0.60% after trading in a range of 10674.25 and 10785.75. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were ONGC up by 5.68%, NTPC up by 3.58%, Power Grid up by 3.34%, BPCL up by 2.93% and GAIL India up by 1.90%. On the flip side, Dr Reddys Lab down by 6.99%, Sun Pharma down by 3.55%, JSW Steel down by 3.28%, Tata Motors down by 2.66% and Zee Entertainment down by 2.41% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 522.42 points or 1.84% to 27,909.63, Jakarta Composite dropped 21.68 points or 0.34% to 6,398.34, Nikkei 225 slipped 269.11 points or 1.27% to 20,870.60, Taiwan Weighted dropped 5.58 points or 0.06% to 10,083.43, Shanghai Composite declined 16.87 points or 0.62% to 2,702.83, Straits Times trembled 12.05 points or 0.37% to 3,241.11 and KOSPI was down by 35.90 points or 1.61% to 2,189.95.