Indian equity benchmarks erased gains and started trading in red in late morning session on account of selling in front line blue chip counters. The sell-off in Metal and Bankex counters pulled the market lower. The encouraging quarterly earnings by few companies and a better trend in other Asian bourses too failed to influence sentiments. The rupee went past its three-month high in early trade against the dollar on sustained selling of the American currency by exporters and banks. The increased selling of the American currency by exporters as well as banks supported the rupee. Meanwhile, the Monetary Policy Committee (MPC) of the RBI, headed by Urjit Patel, on Wednesday unanimously decided to hold the key repo rate at 6.25 percent in its sixth bi-monthly policy review of the financial year 2016-17. The Central Bank in its monetary policy statement said that though the pace of additions in NPAs has slowed, the high amount of bad loans on bank balance sheets is a concern. Resolving this problem and recapitalisation of the lenders are crucial for timely transmission of policy rates and ultimately revive lending to some industries.
Traders took cautious approach with RBI bi-monthly survey on consumer confidence which highlighted that Indian households are less confident of their current economic situation as people are uncertain about their immediate income, employment and spending capabilities. The RBI monitored current situation index (CSI) which provides a gauge of households’ assessment of general economic conditions like employment, their own income and price situation declined sharply to 102.0 in December 2016 from 108.7 in November 2016. Traders were seen piling position in Consumer Durables, IT and TECK stocks, while selling was witnessed in Metal, Bankex and Capital Goods sector stocks. In scrip specific development, Sunteck Realty was trading in green on its plans of forming a new vertical to explore the option of value housing in the backdrop of government’s recent thrust on affordable housing. The developer is planning to invest up to Rs 1,000 crore over the next two years to develop these projects.
On the global front, Asian shares were trading mostly in green, barring Nikkei as investors grew more confident about the world’s second-largest economy. Japan’s core machinery orders rebounded more than expected in December from the prior month’s fall and are seen rising again this quarter - an encouraging sign of a pick-up in capital expenditure. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 8,750 and 28,300 levels respectively. The market breadth on BSE was negative in the ratio of 1103:1258, while 124 scrips remained unchanged.
The BSE Sensex is currently trading at 28209.97, down by 79.95 points or 0.28% after trading in a range of 28184.21 and 28469.48. There were 8 stocks advancing against 22 stocks declining on the index.
The broader indices were trading in red; the BSE Mid cap index was down by 0.35%, while Small cap index was down by 0.12%.
The top gaining sectoral indices on the BSE were Consumer Durables up by 0.70%, IT up by 0.67%, TECK up by 0.52%, Realty up by 0.23% and Oil & Gas up by 0.07%, while Metal down by 1.38%, Bankex down by 0.92%, Capital Goods down by 0.77%, PSU down by 0.51%, Auto down by 0.51% were the losing indices on BSE.
The top gainers on the Sensex were Power Grid up by 1.14%, GAIL India up by 1.01%, Hero MotoCorp up by 1.00%, Lupin up by 0.83% and TCS up by 0.78%.
On the flip side, Tata Steel down by 2.01%, ICICI Bank down by 1.75%, Larsen & Toubro down by 1.22%, SBI down by 1.14% and Maruti Suzuki down by 1.11% were the top losers.
Meanwhile, Economic Affairs Secretary Shaktikanta Das has expressed hopes that the Indian economy will grow more than 7% in the next financial year as the Budget has come up with several measures to provide boost to various sectors. The secretary's statement comes hours after RBI Governor Urjit Patel announced a cut in the growth forecast to 6.9 per cent for the current fiscal, from estimated 7.1 per cent earlier, even as he said that the India’s GDP growth will bounce back to 7.4 per cent next fiscal.
Shaktikanta has stated that RBI in its previous policy review in December had lowered the GDP growth forecast from 7.6 per cent to 7.1 per cent. On central bank’s monetary policy, Das said that the monetary policy committee has unanimously recommended retention of the current rates of interest. He expressed confidence that the banks will step up their lending to various sectors of the economy and also focus on individual loans that is housing loans, consumption loans as well as meeting the requirements of SMEs, other corporates and other business entities.
Talking about the budget, Das said that as far as the government is concerned, the agenda for the financial year 2017-18 have been very clearly spelt out in the Finance Minister Arun Jaitley’s Budget speech and added that now the government is focusing on implementing all the Budget announcements. He also pointed out that the Finance Minister has also announced several measures to give a boost to the housing sector in general and affordable housing in particular.
The economic affairs secretary has further said that these are the kinds of things which will give momentum to growth and the expectation that the finance minister has also projected in the Budget that the growth should revive. He also noted that after the exchange of old notes, banks have already started reducing the rates, which have been reduced considerably.
The CNX Nifty is currently trading at 8738.80, down by 30.25 points or 0.34% after trading in a range of 8729.15 and 8821.40. There were 16 stocks advancing against 35 stocks declining on the index.
The top gainers on Nifty were Aurobindo Pharma up by 1.38%, Power Grid up by 1.12%, HCL Tech up by 1.10%, Hero MotoCorp up by 1.07% and Tech Mahindra up by 0.77%.
On the flip side, Hindalco down by 2.99%, Bank of Baroda down by 2.70%, Tata Steel down by 1.99%, ICICI Bank down by 1.77% and BHEL down by 1.70% were the top losers.
The Asian markets were trading mostly in green; KOSPI Index increased 5.91 points or 0.29% to 2,070.99, Shanghai Composite increased 12.58 points or 0.4% to 3,179.56, Jakarta Composite increased 20.1 points or 0.37% to 5,381.19, Taiwan Weighted increased 48.38 points or 0.51% to 9,591.63 and Hang Seng increased 76.74 points or 0.33% to 23,561.87.
On the other hand, Nikkei 225 decreased 87.23 points or 0.46% to 18,920.37.
Malaysia stock exchange was closed for the day on account of ‘Thaipusam’ holiday.