Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in afternoon session, tracking weakness in Asian peers. Investors’ sentiment remain dented with Assocham president Niranjan Hiranandani’s statement that the economy is facing a liquidity problem and demand recession, and it requires measures to lift consumption, including reduction in goods and services tax and personal income tax and improved credit flow, to revive. Some anxiety also came with report that as many as 377 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of more than Rs 3.94 lakh crore owing to delays and other reasons. Traders also took a note of the International Monetary Fund’s (IMF) Chief Economist Gita Gopinath’s statement that the country needs to keep its fiscal deficit target, which would require expenditure rationalisation and increased revenue mobilisation. On the sectoral front, steel sector remained in focus with World Steel Association (worldsteel) in its latest report showing that  India's crude steel output fell for the second straight month in November, declining 2.8 percent to 8.934 million tonne (MT). During November 2018, the country's crude steel output stood at 9.192 MT.

On the global front, Asian markets were trading mostly in red in quiet trading ahead of Christmas holidays for many markets. Back home, the BSE Sensex is currently trading at 41642.19, down by 39.35 points or 0.09% after trading in a range of 41525.85 and 41701.62. There were 17 stocks advancing against 12 stocks declining, while 2 stocks remain unchanged on the index. The broader indices were trading in green; the BSE Mid cap index rose 0.16%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Auto up by 0.69%, Metal up by 0.68%, Consumer Durables up by 0.49%, Consumer Discretionary Goods & Services up by 0.47% and Capital Goods was up by 0.42%, while Energy down by 1.15%, Telecom down by 0.50%, Realty down by 0.49% and FMCG was down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.80%, Maruti Suzuki up by 1.13%, Bajaj Finance up by 0.99%, Titan Co up by 0.99% and Kotak Mahindra Bank was up by 0.72%. On the flip side, Reliance Industries down by 1.88%, Nestle down by 1.17%, Bharti Airtel down by 0.63%, Tech Mahindra down by 0.59% and Ultratech Cement was down by 0.55% were the top losers.

Meanwhile, the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) hit a 13-month low of Rs 69,670 crore in November-end after registering an increase in such fund infusion in the preceding month. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly after going through a due diligence process.

According to the latest data from the Securities and Exchange Board of India (SEBI), the cumulative value of P-note investments in the domestic markets -- equity, debt, and derivatives -- fell to Rs 69,670 crore till November-end from Rs 76,773 crore in October-end. In September-end, the investment was at Rs 76,611 crore, while it was at Rs 79,088 crore in the end of August and Rs 81,082 crore in July-end.

Out of the total investments made till the end of November, Rs 52,749 crore was invested in the equities segment, Rs 16,238 crore in debt and Rs 683 crore in the derivatives market. The use of P-notes has been on a decline since 2017 and slumped to a nine-and-a-half year low of Rs 66,587 crore in October-end due to gradual measures taken by regulatory bodies to curb the usage of P-notes.    

In July, the board of SEBI has approved a proposal to rationalise the framework for issuance of P-notes -- an instrument once very popular with foreign investors. In July 2017, markets regulator SEBI has notified stricter P-notes norms stipulating a fee of $1,000 that will be levied on each instrument to check any misuse for channelising black money.

The CNX Nifty is currently trading at 12273.40, up by 1.60 points or 0.01% after trading in a range of 12229.30 and 12287.15. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.80%, Vedanta up by 2.08%, UPL up by 2.04%, Hero MotoCorp up by 1.68% and BPCL was up by 1.45%. On the flip side, Reliance Industries down by 1.71%, Nestle down by 1.34%, Britannia Industries down by 0.86%, Ultratech Cement down by 0.69% and Bharti Airtel was down by 0.58% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 35.57 points or 1.18% to 2,969.37, Hang Seng decreased 19.83 points or 0.07% to 27,851.52, Straits Times trembled 1.14 points or 0.04% to 3,211.25 and KOSPI was down by 0.47 points or 0.02% to 2,203.71.

On the flip side, Nikkei 225 surged 4.48 points or 0.02% to 23,821.11, Jakarta Composite soared 6.37 points or 0.1% to 6,290.74 and Taiwan Weighted was up by63.15 points or 0.53% to 12,022.23.