Market breadth turns negative; PSU banks correct

Key benchmark indices traded with modest gains in mid-morning trade. At 11:26 IST, the barometer index, the S&P BSE Sensex, was up 72.51 points or 0.18% at 41,424.68. The Nifty 50 index was up 13.05 points or 0.11% at 12,178.50. PSU banks witnessed selling.

The broader market was under pressure. The S&P BSE Mid-Cap index was down 0.44% while the S&P BSE Small-Cap index was down 0.04%.

The market breadth turned negative. On the BSE, 962 shares rose and 1081 shares fell. A total of 126 shares were unchanged. In Nifty 50 index, 21 stocks advanced while 29 stocks declined.

Economy:

The International Monetary Fund (IMF) will significantly lower India's growth forecast from the earlier number of 6.1% for FY20 on 20 January 2020, given the fall in consumption, lack of private investments and sluggish exports.

As late as October, IMF had forecast India growing at 6.1% for 2019 and 7% for the next year. "But looking at recent incoming data, we will be revising the numbers and it will be a significant downward revision," IMF chief economist Gita Gopinath said on Tuesday.

India's gross domestic product (GDP) grew 4.5% in Q2 September 2019, the lowest since Q4 March 2013.

Meanwhile, Finance Minister Nirmala Sitharaman will chair the 38th goods and services tax (GST) Council meeting today, 18 December 2019. Investors are keenly waiting for the outcome of the meeting to get any cues on the government's plan to overcome revenue shortfall. Concerns on fiscal path may influence government to hike tax slabs.

Buzzing Index:

PSU banks corrected on profit booking. The Nifty PSU Bank index tumbled 2.12% to 2,513.05.

Union Bank of India (down 4.21%), Bank of Baroda (down 2.89%), Punjab National Bank (down 2.7%), Canara Bank (down 2.62%), Oriental Bank of Commerce (down 1.67%), Bank of India (down 1.54%), Syndicate Bank (down 1.4%), State Bank of India (down 1.34%), Allahabad Bank (down 1.31%) and Central Bank of India (down 1.06%) declined.

Stocks in Spotlight:

NBCC (India) rose 1.13% to Rs 35.65. The Committee of Creditors (CoC) of Jaypee Infratech has selected state-run NBCC (India) as the winner in the race to acquire the debt-hit realty developer after the lenders and home buyers concluded their voting on Monday night.

Sunteck Realty gained 2.27% to Rs 413.90 after the company said it has sold 125 apartments out of the recently launched 225 apartments in Mumbai, generating sales worth more than Rs 200 crore.

Foreign Markets:

Most Asian markets declined amid profit booking after recent rally triggered by a recent phase one trade deal reached between Beijing and Washington.

In US, stock indexes closed at records again on Tuesday supported by positive economic data and relief over a truce in President Trump's trade war with China.

In US economic data, home builders increased new construction at an annual pace of 1.365 million in November, an increase of 3.2% from October's pace and a 13.6% increase on a year ago. Industrial production rose 1.1% in November, the largest monthly increase in two years, but is down 0.8% for the past year.

The US reportedly said China agreed to increase imports of goods in 2020 and 2021 by a total of $200 billion more than the total in 2017, including about $40 billion of US farm goods. The deal also included Chinese action to protect American intellectual property and vague assurances not to manipulate its currency.

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