Local equities turn negative in morning deals

Local benchmarks erased all the gains to turn negative in morning session, ahead of Union Budget to be presented by Finance minister Nirmala Sitharaman in the Parliament later in the day. Yes Bank, ONGC and NTPC were the prime losers among heavy-weights, pushing the Sensex lower. However, losses remain capped, as traders took some support with a report that the government is expected to further ease the foreign direct investment (FDI) norms with a view to bridge the widening current account deficit (CAD). Some solace also came with a report that the size of Indian economy has grown to $2.75 trillion in 2018-19 from $1.99 trillion in 2015-16 even as global economy has faltered. Besides, Chief Economic Adviser (CEA) KV Subramanian stated that India needs to sustain a real Gross Domestic Product (GDP) growth rate of 8 percent. He added that to achieve this growth rate the country needs to accelerate investment in excess of 35 percent of the GDP.

On the global front, Asian markets were trading mixed as investors steeled themselves for the release of a crucial US jobs report that could have a major bearing on the size of an expected Federal Reserve interest rate cut. Back home, the Economic Survey 2018-19 reported showed that bringing private investment in the infrastructure sector is key to India becoming a $10-trillion economy by 2030, as fiscal constraints continue to limit fund flow from public sector.

The BSE Sensex is currently trading at 39876.37, down by 31.69 points or 0.08% after trading in a range of 39866.87 and 40032.41. There were 13 stocks advancing against 17 stocks declining, while 1 stock remain unchanged on the index.

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

The top gaining sectoral indices on the BSE were Realty up by 0.56%, Telecom up by 0.19%, BANKEX up by 0.09% and Capital Goods was up by 0.03%, while Oil & Gas down by 1.29%, Power down by 1.17%, Utilities down by 0.95%, PSU down by 0.82% and Metal was down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 0.69%, Asian Paints up by 0.64%, Kotak Mahindra Bank up by 0.63%, IndusInd Bank up by 0.54% and HDFC was up by 0.38%. On the flip side, Yes Bank down by 5.92%, ONGC down by 2.78%, NTPC down by 2.48%, Vedanta down by 2.25% and Sun Pharma was down by 1.11% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that Indian pharmaceutical industry is likely to grow by 11-13% in the current financial year (FY20) on the back of healthy demand from the domestic market, given increasing spend on healthcare along with improving access. It further mentioned that this along with moderation in pricing pressure for US market, new launches and market share gains for existing products and consolidation benefits will drive growth in FY20.

The growth in FY20 is expected to be supported by 4.2% WPI linked price hike for National List of Essential Medicines (NLEM) portfolio. The credit metrics of leading pharma companies are expected to remain stable in view of future growth prospects in regulated markets and relatively strong balance sheets.

However, the growth will be constrained by regulatory interventions such as price controls, compulsory genericisation and United States Food and Drug Administration (USFDA) oversight for manufacturing deficiencies. According to an ICRA report, covering a sample of 21 firms in the industry, the growth during FY2019 stood at around 12%.

The CNX Nifty is currently trading at 11939.45, down by 7.30 points or 0.06% after trading in a range of 11926.25 and 11981.75. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 1.67%, JSW Steel up by 0.95%, Indiabulls Housing Finance up by 0.80%, Asian Paints up by 0.74% and Kotak Mahindra Bank was up by 0.73%. On the flip side, Yes Bank down by 4.73%, ONGC down by 2.63%, NTPC down by 2.61%, Vedanta down by 2.13% and Indian Oil Corporation was down by 2.08% were the top losers.

Asian markets were trading mixed; Straits Times trembled 17.47 points or 0.52% to 3,354.78, Jakarta Composite lost 11.02 points or 0.17% to 6,364.95, Shanghai Composite declined 5.33 points or 0.18% to 2,999.92 and Taiwan Weighted was down by 5.26 points or 0.05% to 10,770.64.

On the other hand, KOSPI rose 1.19 points or 0.06% to 2,109.92, Nikkei 225 surged 16.96 points or 0.08% to 21,719.41 and Hang Seng was up by 21.90 points or 0.08% to 28,817.67.