Volatility continues to hit Indian markets

Volatility continued to hit Indian equity markets in late morning session, on the back of negative cues from other Asian markets along with selling at almost all sectors except Banking, after the Reserve Bank of India (RBI) lowered risk weights for bank finance to NBFCs and microfinance loans, a move that will unlock more funds and boost credit. A lower risk weight means that lenders need to set aside less funds as a safety net for consumer loans, implying an increase in their lending capacity. Indices were struggling for direction due to prevailing uncertainty over U.S. President Donald Trump's trade policies and ongoing FII selling. But, downside remained capped, as highlighting initiatives being taken by the government to support various sectors in the country, Union Minister of Commerce & Industry Piyush Goyal has said that the Centre is committed to creating a favourable investment climate, ensuring regulatory stability, and enhancing the ease of doing business (EoDB) in the country.

On the global front, Asian markets were trading mostly in red, as Malaysia's producer prices increased for the second straight month in January. The figures from the Department of Statistics showed that producer prices climbed 0.8 percent year-on-year in January, reversing a 0.5 percent rise in December. The expected increase was 0.7 percent. Among sectors, the price index for agriculture, forestry, and fishing grew the most by 16.5 percent from last year. 

The BSE Sensex is currently trading at 74629.85, up by 27.73 points or 0.04% after trading in a range of 74556.41 and 74834.09. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 1.02%, while Small cap index was down by 1.85%.

The only gaining sectoral index on the BSE was Bankex up by 0.26%, while Industrials down by 1.98%, Auto down by 1.69%, Power down by 1.64%, Realty down by 1.60% and Basic Materials down by 1.45% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.43%, Bajaj Finserv up by 2.19%, Indusind Bank up by 1.65%, HDFC Bank up by 1.02% and Axis Bank up by 0.89%. On the flip side, Ultratech Cement down by 5.78%, Mahindra & Mahindra down by 2.33%, Tata Motors down by 1.50%, NTPC down by 1.16% and ITC down by 1.11% were the top losers.

Meanwhile, Union Commerce and Industry Minister Piyush Goyal has said that ship-building opportunities in the country are high and the government is looking at ways to promote the sector. He also urged the industry to suggest ways to make flagging of vessels in India attractive. He noted that India has the advantage to allow cabotage of vessels and promote imports coming in Indian flagged vessels permitted within the WTO rules, but does not have enough flagged vessels to take advantage of the regulations. He urged the participants to suggest ways at the state and central levels to help companies come in flagged vessels in India. 

Goyal further stated that India has doubled its port capacity in the last decade and has significantly brought down the turnaround time of ships, and added that the work remains towards strengthening the logistics ecosystem. Noting that as much as 95 per cent of India's trade volume goes through ports and the 7,500 km coastline acts as a major enabler for the trade, he stressed the immense potential the sector has to grow over the next few years. He also stressed the need for the logistics system to be more conducive to handling the current traffic at ports. 

The minister said Unified Logistics Interface Platform (ULIP) has been introduced to aid logistics, but more ideas are needed to provide the whole ecosystem-linked logistics at ports. He further called for a hybrid mode of training to meet the growing demand of seafarers in the sector. He said container ownership, container manufacturing, faster speed of exports, and ease of congestion are the areas that need improvement. He noted that India stands out as an oasis amidst the global trade turmoil, and hoping the country would continue to grow and contribute towards the greater good of the world. He pointed out the maritime trade and logistics sector as the backbone of the Viksit Bharat mission. 

The CNX Nifty is currently trading at 22532.85, down by 14.70 points or 0.07% after trading in a range of 22524.20 and 22613.30. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 4.43%, Bajaj Finance up by 2.56%, Bajaj Finserv up by 2.18%, Indusind Bank up by 1.61% and HDFC Bank up by 1.09%. On the flip side, Ultratech Cement down by 5.72%, Grasim Industries down by 2.52%, Mahindra & Mahindra down by 2.24%, Trent down by 2.20% and Hero MotoCorp down by 2.19% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 73.01 points or 0.31% to 23,714.92, Jakarta Composite plunged 147.81 points or 2.29% to 6,458.37, Shanghai Composite weakened 8.94 points or 0.27% to 3,371.27, Straits Times fell 2.86 points or 0.07% to 3,905.19, KOSPI dropped 22.35 points or 0.85% to 2,618.74 and Taiwan Weighted lost 349.37 points or 1.52% to 23,053.18, while Nikkei 225 surged 110.99 points or 0.29% to 38,253.36.