Indian equity benchmarks have made a flat start and are trading near their neutral lines in early deals on Friday. Though, sentiments remained positive with the American industry bodies lauding the Budget, saying Finance Minister Arun Jaitley has done an 'admirable job' in creating a vision that will propel the domestic economy while remaining cognizant about foreign investors eying the Indian market. Some support also came with Economic Affairs Secretary Shaktikanta Das stating that the government is committed to fiscal prudence. So giveaways bordering on populism are something which the government does not believe in.
On the global front, Asian markets were exhibiting mixed trend with Chinese market declining after resuming the trade from the long Lunar New Year holidays. China raised the interest rates in open-market operations. The US markets made a flat closing in last session after showing a choppy trade amid uncertainty about monthly jobs report as well as the impact of President Donald Trump's policies.
Back home, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 108.59 crore, while Domestic Institutional Investors (DIIs) sold shares worth a net Rs 110.89 crore, on February 2, 2017. BSE, which recently concluded its Rs 1,243 crore initial public offering, made a superb listing and are trading with a gain of around 40% at this point of time. The market breadth indicating the overall health of the market was strong, with 1,377 shares gaining and 571 shares declining, while a total of 86 shares were unchanged
The BSE Sensex is currently trading at 28228.56, up by 1.95 points or 0.01% after trading in a range of 28180.11 and 28280.58. There were 20 stocks advancing against 10 stocks declining on the index.
The broader indices were trading in green; the BSE Mid cap index surged 1.05%, while Small cap index was up by 0.80%.
The top gaining sectoral indices on the BSE were PSU up by 0.82%, Power up by 0.58%, Metal up by 0.40%, Bankex up by 0.35% and Oil & Gas was up by 0.33%, while Consumer Durables down by 0.71%, IT down by 0.53%, Auto down by 0.41% and Capital Goods was down by 0.04% were the few losing indices on BSE.
The top gainers on the Sensex were SBI up by 1.43%, Cipla up by 1.14%, Coal India up by 1.01%, ONGC up by 0.95% and Lupin was up by 0.83%. On the flip side, ICICI Bank down by 1.38%, Infosys down by 1.13%, Tata Motors down by 0.69%, Bajaj Auto down by 0.58% and Hero MotoCorp was down by 0.54% were the top losers.
Meanwhile, reacting to Chief Economic Advisor Arvind Subramanian’s statement questioning the methodologies used by global rating agencies and slamming them for following inconsistent standards, the global ratings agency, Standard & Poor's (S&P) has claimed that its rating methodologies are transparent and consistent across the globe. The rating agency has said that they apply the same methodology consistently for sovereigns across the globe and India is no exception. It added their sovereign rating methodologies are transparent and are freely available on their website.
Arvind Subramanian had earlier said that global rating agencies have inconsistent and poor standards while rating India vis-a-vis China. He added that agencies have not taken into account government’s reforms initiatives such as FDI liberalisation, bankruptcy code, monetary policy framework agreement, GST and Aadhaar Bill, which is a ‘poor’ reflection on their credibility. He had said that S&P has rated China six grades above India and since 2010 it has held China's ratings steady despite economic growth slowing to 6.5 percent from 10 percent. In contrast, India's has moved in the opposite direction and growth has increased. S&P has a ‘BBB-’ rating on India with a stable outlook, while it has ‘AA-’ rating on China with a negative outlook. S&P had in November ruled out an upgrade in the country's ratings for some considerable period, citing low per capita GDP and relatively high fiscal deficit. The government debt to GDP ratio stood at 68.5 percent.
S&P has said that mostly, they spell out the broad mix of which factors that they look at in assessing sovereign credit, including in India's case the balance between fiscal consolidation and stimulating growth. On S&P’s rationale for higher rating on China, S&P director for sovereign ratings Kyran Curry said ‘If I can directly touch upon the comparison between India's ‘BBB-’ rating and China's ‘AA-’ rating with a negative outlook, I think this comparison is very useful but it is worth noting that China has a GDP per capita about five times greater than India and China's debt stock is only about 30 percent of GDP’. He added that it is also worth noting that because of China's much lower debt stock, its debt servicing cost is only 3 percent of revenue compared to 21 percent for India. So, these are the factors that underpin China's higher rating.
The CNX Nifty is currently trading at 8734.90, up by 0.65 points or 0.01% after trading in a range of 8717.75 and 8748.25. There were 30 stocks advancing against 21 stocks declining on the index.
The top gainers on Nifty were Bharti Infratel up by 2.62%, Bank of Baroda up by 2.45%, Indusind Bank up by 1.76%, Idea Cellular up by 1.55% and BHEL was up by 1.40%. On the flip side, ICICI Bank down by 1.43%, Infosys down by 1.27%, Eicher Motors down by 1.17%, Tata Motors - DVR down by 0.96% and Bosch was down by 0.83% were the top losers.
Asian markets were trading mixed; Jakarta Composite rose 4.75 points or 0.09% to 5,358.47, FTSE Bursa Malaysia KLCI increased 6.15 points or 0.37% to 1,679.63, Taiwan Weighted gained 8.61 points or 0.09% to 9,437.58 and Nikkei 225 was up by 39.27 points or 0.21% to 18,953.85.
On the flip side, Hang Seng decreased 111.88 points or 0.48% to 23,072.64, Shanghai Composite declined 18.07 points or 0.57% to 3,141.10 and KOSPI Index decreased 2.93 points or 0.14% to 2,068.08.