Benchmarks trade lower in early deals; Nifty slips below 10,800 mark

Indian equity benchmarks made a pessimistic start amid lackluster cues from Asian peers. Traders remain concerned about a report that the flow of foreign direct investment (FDI) into India is dropping and may suffer its first full-year decline since Prime Minister Narendra Modi came to power in 2014. Inbound FDI dropped 7% to $33.5 billion in the nine months between April and December 2018, compared with $36 billion in the year-earlier period. Sentiments also remain dampened with Bibek Debroy, the head of Prime Minister’s economic advisory panel, stating that India lacks good data on economy and jobs as it is majorly an informal economy. Also, traders reacted negatively on domestic ratings agency Icra’s report that India Inc witnessed a dip in both revenue growth as well as margins in the December quarter compared to the preceding three months. The analysis is based on the aggregate numbers reported by 648 listed companies, which shows a revenue growth of 17.3% in Q3 down from 19.4% in the preceding three months.

On the global front, most of the Asian counters are trading in red terrain as the rush of optimism on US-China trade talks from early Monday faded marginally. The US markets ended in green on Monday, after President Trump said he would delay a planned increase in tariffs on Chinese goods.

Back home, reality sector stocks are trading lower with CRISIL Research’s report that even as the latest GST cut on under-construction housing projects is expected to increase demand, real estate developers may see mixed results. It added that the withdrawal of input tax credit (ITC) would impact the profitability of developers. Sugar sector stocks are trading lower at this point of time with India Ratings’ report that even as there is lower sugar production due to deficient rainfall in sugar season (SS) 2018-19, surplus situation continued following high carry-over stock from the last season.

The BSE Sensex is currently trading at 35860.84, down by 352.54 points or 0.97% after trading in a range of 35842.58 and 36054.00. There were 4 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index surged 1.44%, while Small cap index was down by 1.39%.

The top losing sectoral indices on the BSE were Realty down by 2.81%, Metal down by 1.47%, Consumer Durables down by 1.46%, Bankex down by 1.42% and PSU was down by 1.34%, while there were no gainers on the BSE sectoral indices.

The top gainers on the Sensex were TCS up by 1.01%, Hindustan Unilever up by 0.46%, Tata Motors up by 0.23% and Coal India up by 0.09%. On the flip side, Yes Bank down by 2.71%, Hero MotoCorp down by 2.48%, ICICI Bank down by 2.17%, SBI down by 1.96% and Tata Steel down by 1.93% were the top losers.

Meanwhile, ahead of the Central Statistics Office’s (CSO) Gross Domestic Product (GDP) data release, the State Bank of India (SBI) Research in its latest report has said that Indian economy is likely to grow in the range of 6.6-6.7 percent during the third quarter of the current fiscal year 2018-19 (FY19). It added that for the full financial year, the growth will be 7.2 percent. Besides, the report said that the CSO has recently revised GDP growth for FY18 from 6.7 percent earlier to 7.2 percent. At this rate, FY19 growth rate would have been at 5.9 percent (earlier 7.2 percent).

The yearly SBI composite index for February saw a marginally rise to 50.60 (a score of under 50 indicates negative growth). The index remained volatile and declined to 11-month low of 46.10 (low decline) in February from 52.8 (moderate growth) in January. SBI Research said based on the annual performance of these leading indicators, they are expecting GDP to grow around 6.6-6.7 percent in the December quarter.

However, SBI Research believes the GDP deflator which is at 4.1 percent now, could be revised downwards by at least 50 bps, thus pushing GDP close to 7.2 percent in FY19. With the decline in index, the report said that Index of Industrial Production (IIP) manufacturing may grow at 1.5 percent and overall IIP at 2.5 percent in February. On the Goods and Services Tax (GST) front, it expects total GST collection for February to be at Rs 95,500 crore, significantly lower than Rs 1.05 lakh crore in the previous month.

The CNX Nifty is currently trading at 10780.00, down by 100.10 points or 0.92% after trading in a range of 10765.55 and 10837.15. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.10%, Bajaj Finserv up by 0.73%, Hindustan Unilever up by 0.73%, Ultratech Cement up by 0.31% and Tata Motors up by 0.20%. On the flip side, Yes Bank down by 2.58%, JSW Steel down by 2.43%, Hero MotoCorp down by 2.41%, HPCL down by 2.34% and Indiabulls Housing down by 2.33% were the top losers.

Asian markets are trading mostly lower in early deals; Nikkei 225 declined 101.74 points or 0.47% to 21,426.49, Straits Times slipped 7.48 points or 0.23% to 3,264.87, Hang Seng decreased 148.68 points or 0.51% to 28,810.62, Taiwan Weighted dipped 9.92 points or 0.10% to 10,381.01, Kospi shed 6.50 points or 0.29% to 2,226.06 and Jakarta Composite was down by 17.60 points or 0.27% to 6,507.76. On the flip side, Shanghai Composite was up by 12.43 points or 0.42% to 2,973.71.