Weakness persists in markets in afternoon deals

Indian benchmark indices continued to trade in red in afternoon session due to selling in frontline blue chip stocks, despite strong trend seen in other Asian markets. The sentiment remained dull with the Federation of Indian Chambers of Commerce (Ficci) and the Indian Banks’ Association (IBA) survey stating that Liquidity is expected to remain constrained till the end of March owing to factors such as higher demand for money at the end of 2018-19, the upcoming Lok Sabha elections and advance tax outflow. Some anxiety was also among the local traders as Former Reserve Bank of India Governor Y V Reddy termed the recent trend of rolling out doles for the farm sector, including the Union Budget's basic income scheme, as a 'disturbing trend' which will impact fiscal stability, growth and also Centre-state relations. Further, fall in rupee value against dollar along with muted earnings from bluechip companies weighed on the sentiments.

On the global front, Asian markets were trading in green, as investors pin hopes for progress in the Sino-US trade talks. Back home, the BSE Sensex is currently trading at 35560.47, down by 248.48 points or 0.69% after trading in a range of 35525.96 and 35912.44. There were 7 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.79%, while Small cap index was down by 0.57%.

The only gaining sectoral indices on the BSE were Realty up by 1.36% and Telecom up by 0.70%, while Energy down by 1.37%, FMCG down by 1.33%, Consumer Durables down by 1.18%, IT down by 1.12% and Power down by 1.03% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.18%, Tata Steel up by 0.97%, Indusind Bank up by 0.56%, SBI up by 0.44% and Vedanta up by 0.37%. On the flip side, Yes Bank down by 2.90%, Asian Paints down by 2.75%, TCS down by 2.59%, HCL Tech. down by 2.17% and Hindustan Unilever down by 1.81% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that the government’s move to hike the minimum selling price (MSP) of sugar will augur well for the sugar mills and is expected to improve their operating profit margins by around 6 percent from the current levels. That apart, it said the move will help millers clear farmers' dues. To support the oversupply hit sugar industry, the government has increased the MSP of sugar to Rs 31,000/MT from Rs 29,000/MT (announced in June 2018).

According to the report, the sugar prices were relatively subdued at around Rs 29,000/MT in the recent months, resulting in high cane arrears of around Rs 20,000 crore as on January 2019 end. It also noted that while, the MSP hike is a credit positive for the sugar mills, and also benefit cane farmers through better settlement of dues, the government's ability to enforce the price regulations will be critical. It also pointed out that as per the latest estimates on domestic sugar stocks, the country is likely to produce 30.7 million tonnes (MT) of sugar in 2018-19 as against the earlier estimates of 31.5 MT.

The rating agency further said that this is after considering the diversion of B heavy molasses and sugarcane juice from sugar into ethanol. It stated that notwithstanding this and the estimates of growth in domestic sugar consumption by 2-3 percent to around 25.8 MT in sugar year 2019, the production would still be higher by at least 4.5 MT than the estimated consumption.

The CNX Nifty is currently trading at 10649.80, down by 74.60 points or 0.70% after trading in a range of 10639.50 and 10759.90. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.42%, ONGC up by 1.26%, Zee Entertainment up by 1.02%, Tech Mahindra up by 0.86% and Tata Steel up by 0.78%. On the flip side, Yes Bank down by 3.01%, Asian Paints down by 2.73%, Bajaj Finserv down by 2.53%, TCS down by 2.49% and HPCL down by 2.17% were the top losers.

All Asian markets were trading in green; Hang Seng increased 469.43 points or 1.68% to 28,370.27, Jakarta Composite soared 86.84 points or 1.36% to 6,475.93, Nikkei 225 surged 381.22 points or 1.82% to 21,281.85, Taiwan Weighted strengthened 80.50 points or 0.8% to 10,145.28, Shanghai Composite gained 67.90 points or 2.53% to 2,750.29, Straits Times advanced 26.75 points or 0.83% to 3,266.49 and KOSPI was up by 14.80 points or 0.67% to 2,210.89.