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Key indices carry on lower trade in early noon deals
Jan-18-2019

Indian equity benchmarks continued to trade weak in early noon session, as selling was witnessed in Sun Pharma, Bharti Airtel and Coal, with Sensex and Nifty losing around 52 and 20 points respectively. Markets failed to get any sense of relief with Agriculture Minister Radha Mohan Singh indicating announcement of major measures in the coming weeks to address farm distress across the country, a move that will come ahead of Lok Sabha elections. This will address income deficit syndrome of small and marginal farmers by proposing various steps, including a financial package and interest waiver for timely crop loan repayers. Stocks related to auto components industry remained buzzing with the rating agency ICRA stating that the domestic auto components industry is expected to grow at around 15 percent in the current financial year despite a slowdown in demand in the automotive sector.

On the global front, Asian markets were trading in mostly in green, as optimism came on report that U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for January 30. Back on street, InterGlobe Aviation was trading in red as The Director General of Civil Aviation (DGCA) imposed restriction on IndiGo for flying to Port Blair with Airbus 320 Neo fitted with Pratt and Whitney (PW) engines. The restriction has been taken after considering safety norms.

The BSE Sensex is currently trading at 36322.41, down by 51.67 points or 0.14% after trading in a range of 36218.33 and 36469.98. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.32%, while Small cap index was down by 0.41%.

The few gaining sectoral indices on the BSE were Energy up by 0.77%, Metal up by 0.11%, Bankex up by 0.09%, while Telecom down by 3.48%, Healthcare down by 1.77%, TECK down by 0.65%, Realty down by 0.47% and FMCG was down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.39%, Kotak Mahindra Bank up by 1.02%, ONGC up by 0.86%, Vedanta up by 0.71% and HCL Technologies up by 0.63%. On the flip side, Sun Pharma down by 10.17%, Bharti Airtel down by 5.90%, Axis Bank down by 1.02%, Coal India down by 0.95% and Yes Bank was down by 0.77% were the top losers.

Meanwhile, ahead of the sixth bi-monthly monetary policy statement for 2018-19, India Inc has urged the Reserve Bank of India (RBI) to cut its benchmark interest rate and lower the cash reserve ratio (CRR) to boost growth. It suggested various measures to ease tight liquidity situation and reduce high cost of credit in the light of consistently falling inflation.

The Confederation of Indian Industry (CII) suggested the policy measures required to ease the tight liquidity situation by effecting a cut in cash reserve ratio (CRR) by at least 50 basis points (bps), measures to facilitate flow of credit to industry, especially to micro, small and medium enterprises (MSMEs) and the infrastructure sector, and steps to address the high cost of credit by considering a reduction of 50 bps in repo rate given that inflation has been consistently low. On measures to address the financial challenges faced by the MSMEs, CII suggested that the RBI consider limiting the collaterals sought by banks to 133 percent of the exposure and eliminate the need for personal guarantees where sufficient collateral exists.

Meanwhile, the Federation of Indian Chambers of Commerce and Industry (FICCI) also made a pitch for cutting the repo rate and CRR to enable lowering of lending rates by banks. It believed that a reduction in repo rate and CRR would help in reviving the investment cycle in the country and will also boost consumption and support growth. It stated that the need of the hour is to have an accommodative monetary policy, focusing on growth. It added that the objectives of the Monetary Policy Committee should not be restricted to only price stability but also to consider growth and exchange rate stability.

The Associated Chambers of Commerce and Industry of India (Assocham) suggested that the economy needs credit loosening so that liquidity can sustain the growth. It noted that the fundraising capability of NBFCs/HFCs has reduced significantly, warranting support from the government. It noted that they need to be provided the alternate options for raising funds. It added that this is imperative not just for the health of NBFCs/HFCs but for sustaining the GDP growth rate as well.

The CNX Nifty is currently trading at 10884.75, down by 20.45 points or 0.19% after trading in a range of 10852.20 and 10928.20. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Wipro up by 1.52%, Reliance Industries up by 1.32%, Kotak Mahindra Bank up by 1.24%, ONGC up by 1.21% and HCL Technologies up by 0.94%. On the flip side, Sun Pharma down by 10.21%, Bharti Airtel down by 6.19%, GAIL India down by 2.39%, Bajaj Finserv down by 1.32% and HPCL was down by 1.31% were the top losers.

Asian market were trading in mostly in green, KOSPI rose 13.87 points or 0.66% to 2,120.93, Hang Seng increased 317.54 points or 1.19% to 27,073.17, Taiwan Weighted strengthened 46.91 points or 0.48% to 9,836.06, Shanghai Composite gained 26.46 points or 1.03% to 2,586.10, Straits Times advanced 8.75 points or 0.27% to 3,223.19, Nikkei 225 was up by 257.96 points or 1.26% to 20,660.23. On the flip side, Jakarta Composite was down by 6.99 points or 0.11% to 6,416.79.

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