Indian equity benchmarks extended losses in the noon session, with Nifty falling below the 8800 level, in absence of positive triggers which could take the markets higher. Sentiments remained downbeat as RBI held repo rates at 6.25% for the second time in a row, changing its stance to 'neutral' from 'accommodative'. The central bank has also cut the economic growth forecast to 6.9 per cent for the current fiscal from 7.1 per cent estimated earlier. Adding the anxiety among investors, RBI’s bi-monthly survey on consumer confidence indicate that Indian households are less confident of their current economic situation as people are uncertain about their immediate income, employment and spending capabilities. However, losses remained capped, as Economic Affairs Secretary Shaktikanta Das rejecting arguments that fiscal deficit target of 3.2 per cent is optimistic, said it is realistic and there is all possibility that revenues will exceed the target as Budget has not taken into account the demonetisation windfall. He also said India will be able to pull off a 7% plus growth rate next fiscal as the Budget for 2017-18 has come up with several measures to provide a fillip to various sectors. Some support also came with RBI governor’s statement that there is further scope for banks to reduce lending rates as the Reserve Bank has already brought down its policy rates by 175 basis points since January 2015. Meanwhile, street watched out for some major companies to declare their Q3 earnings during the day. A total of 268 firms are supposed to report their third quarter results during the day including SAIL, BPCL, Power Grid, Lupin, Cairn India and Aurobindo Pharma.
On the global front, Asian markets were trading mostly in green on Thursday, as investors grew more confident about China, while the dollar slightly firmed in the wake of growing concerns over political instability in Europe. However, Japan's Nikkei share average slipped due to pressure from a stronger yen ahead of a meeting this week between US President Donald Trump and Japan's Prime Minister Shinzo Abe. Meanwhile, oil prices stabilized on Thursday, boosted by an unexpected draw in U.S. gasoline inventories.
Back home, stocks from IT, Teck and Consumer Durables counters were supporting the markets, while those from Metal, Banking and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Union Bank of India declined after the bank's gross non-performing assets rose to 11.70% in the December quarter from 7.05% reported in the same quarter of last financial year. On the other hand, Indraprastha Gas gained after the company reported 36.81% rise in its net profit at Rs 144.81 crore for the quarter ended December 31, 2016, as compared to Rs 105.85 crore for the same quarter in the previous year.
The market breadth remained pessimistic, as there were 1166 shares on the gaining side against 1366 shares on the losing side, while 128 shares remained unchanged.
The BSE Sensex is currently trading at 28167.00, down by 122.92 points or 0.43% after trading in a range of 28152.18 and 28469.48. There were 12 stocks advancing against 18 stocks declining on the index.
The broader indices were trading in red; the BSE Mid cap index was down by 0.42%, while Small cap index down by 0.11%.
The top gaining sectoral indices on the BSE were IT up by 0.73%, TECK up by 0.60%, Consumer Durables up by 0.30% and Realty up by 0.30%, while Metal down by 1.19%, Bankex down by 1.18%, Capital Goods down by 0.79%, PSU down by 0.65% and FMCG down by 0.56% were the top losing indices on BSE.
The top gainers on the Sensex were TCS up by 1.32%, Hero MotoCorp up by 0.99%, Lupin up by 0.83%, Infosys up by 0.58% and Power Grid Corpn. up by 0.57%. On the flip side, Tata Steel down by 2.23%, ICICI Bank down by 1.98%, SBI down by 1.88%, Cipla down by 1.37% and Larsen & Toubro down by 1.25% were the top losers.
Meanwhile, dispelling any fear of slowdown, Indian economy attracted $4.68 billion foreign direct investment (FDI) in November 2016, up 60 per cent over the corresponding period last year of $2.93 billion. During the period, India received the maximum FDI from Singapore, Mauritius, the UK, the US, the Netherlands and Japan.
During April-November period of the current fiscal, FDI in the country grew to $32.49-billion against $24.81 billion in the same period previous year. Among the main sectors, services received the maximum FDI of $6.69 billion during the eight-month period of 2016-17, followed by telecom ($5.47 billion), computer hardware and software ($1.61 billion), electrical equipment ($2 billion) and information & broadcasting ($1.06 billion).
Foreign investments are considered crucial for India, needing around $1 trillion for overhauling its infrastructure sector. The government has been focusing to improve the ease of doing business and relax regulations for increasing FDI and in a view of growth perspective in FDI, the Finance Minister in his Budget speech announced to abolish Foreign Investment Promotion Board (FIPB) and come up with a new mechanism that could include approvals by the ministries concerned for expeditious clearance of foreign investment proposals which will improve ease of doing business.
The CNX Nifty is currently trading at 8730.45, down by 38.60 points or 0.44% after trading in a range of 8724.10 and 8821.40. There were 18 stocks advancing against 31 stocks declining on the index, while 2 stocks remained unchanged.
The top gainers on Nifty were Aurobindo Pharma up by 1.89%, Tech Mahindra up by 1.18%, Hero MotoCorp up by 0.94%, HCL Tech up by 0.91% and Lupin up by 0.89%. On the flip side, Bank Of Baroda down by 2.73%, Hindalco down by 2.54%, Tata Steel down by 2.27%, ICICI Bank down by 2.08% and SBI down by 1.84% were the top losers.
Asian markets were trading mostly in green; KOSPI Index gained 0.25%, Shanghai Composite rose 0.36%, Jakarta Composite increased 0.37%, Taiwan Weighted advanced 0.49% and Hang Seng was up by 0.26%. On the flip side, Nikkei 225 decreased 0.34% and FTSE Bursa Malaysia KLCI was down by 0.02%.