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Bourses pare most of losses to trade flat
Jan-18-2019

The equity benchmarks pared most of their losses in late afternoon session to trade flat, supported by firm European markets. Trading sentiments got relief came with a private report that eighteen micro finance non-banking financial companies (NBFC-MFIs) have pooled assets worth a combined Rs 835 crore for securitisation, to tide over a liquidity problem in the sector. Separately, Prime Minister also said that India is aiming at being in the list of top 50 countries in ease of doing business by next year. Adding some comfort, Prime Minister Narendra Modi said that his government has helped create crores of employment opportunities across sectors in the past four-and-a-half years. However, the trade remained lackluster, on the back of heavy selling at Telecom, Healthcare and Capital Goods stocks. The boarder markets were also lingering below their neutral lines. On the sectoral front, Agri industry stocks were in limelight, with Union Minister of Agriculture and Farmers’ Welfare Shri Radha Mohan Singh stating that India has achieved tremendous progress in agriculture and allied sectors under Modi government and is committed to doubling farmers’ income by 2022 through a series of focused programmes.

On the global front, European markets were trading in green, as Eurozone inflation slowed to 1.6% in December from last year. Asian markets were also trading in green, hopes for a thaw in the US China trade conflict helped improve investors' appetite for riskier assets. Trade tensions eased somewhat after the Wall Street Journal said the US is considering lifting tariffs on Chinese goods in an effort to calm markets and give Beijing an incentive to make deeper concessions.

The BSE Sensex is currently trading at 36363.86, down by 10.22 points or 0.03% after trading in a range of 36218.33 and 36469.98. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.71%, while Small cap index was down by 0.66%.

The only gaining sectoral indices on the BSE were Energy up by 2.51% and Oil & Gas up by 0.31%, while Telecom down by 3.98%, Healthcare down by 2.25%, Capital Goods down by 1.12%, Realty down by 1.07% and Industrials down by 1.00% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 4.07%, Kotak Mahindra Bank up by 1.52%, ONGC up by 1.03%, Asian Paints up by 0.78% and HCL Tech. up by 0.51%. On the flip side, Sun Pharma down by 10.28%, Bharti Airtel down by 6.55%, Larsen & Toubro down by 1.79%, Axis Bank down by 1.74% and Yes Bank down by 1.74% were the top losers.

Meanwhile, despite a slowdown in demand in the automotive sector, credit rating agency, ICRA has remained optimistic over growth of the domestic auto components industry. According to its latest report, the industry is likely to grow at around 15 percent in the current financial year, on the back of healthy volume growth in two-wheelers, commercial vehicles and tractor segment until November last year.

ICRA expects automobile volumes to grow 8-9 percent during the current fiscal, as against 14.8 percent growth during 2017-18. The agency further noted that the aftermarket sales were impacted in FY2018 by GST-related inventory de stocking in the first quarter of FY2018 and initial implementation related uncertainties in the second quarter of FY2018. However, demand picked up in August-September 2018, with a sharp revival from the fourth quarter of 2017-18.

Going further, ICRA is also hoping growth in weighted-average demand for auto components from original equipment manufacturers (OEM) at 10-11 percent in the current fiscal, as compared with 9.5 percent expected in 2017-18, supported by strong commercial vehicle volumes.

However, it pointed that for exports, trade disputes, punitive tariffs, higher fuel prices and rising interest costs are expected to play spoilsport in light vehicle sales in the US, which is the major market for auto components industry other than Europe, over the next 12-18 months.

The CNX Nifty is currently trading at 10899.85, down by 5.35 points or 0.05% after trading in a range of 10852.20 and 10928.20. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 4.09%, Wipro up by 2.94%, Kotak Mahindra Bank up by 1.70%, ONGC up by 1.59% and HCL Tech. up by 1.01%. On the flip side, Sun Pharma down by 9.86%, Bharti Airtel down by 6.46%, GAIL India down by 2.83%, HPCL down by 2.17% and Eicher Motors down by 1.90% were the top losers.

All Asian market were trading in green; Nikkei 225 surged 263.80 points or 1.29% to 20,666.07, Hang Seng increased 335.18 points or 1.25% to 27,090.81, KOSPI rose 17.22 points or 0.82% to 2,124.28, Taiwan Weighted strengthened 46.91 points or 0.48% to 9,836.06, Shanghai Composite gained 32.70 points or 1.28% to 2,592.34, Straits Times advanced 5.86 points or 0.18% to 3,220.30 and Jakarta Composite was up by 24.38 points or 0.38% to 6,448.16.

All European markets were trading in green; France’s CAC gained 47.85 points or 1.00% to 4,842.22, Germany’s DAX added 93.55 points or 0.86% to 11,012.17 and UK’s FTSE 100 was up by 49.92 points or 0.73% to 6,884.84.
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