Market extends losses

Key indices extended losses and hit fresh day's low in mid-afternoon trade. At 14:25 IST, the barometer index, the S&P BSE Sensex, fell 194.34 points or 0.57% at 34,103.17. The Nifty 50 index dropped 61.40 points or 0.58% at 10,484.10.

A jump in India's trade deficit in January 2018 weighed on sentiment. Also, a rise in global crude oil prices off late has also hit the market sentiment. India imports majority of its crude oil requirements and a surge in crude prices will add to the country's fiscal deficit.

Domestic markets opened with modest gains tracking surge in US stocks in the previous session amid holiday thinned trade in Asian markets. Stocks soon trimmed initial gains in morning trade and later slipped into the red in mid-morning trade. Indices languished in negative zone till afternoon trade. Stocks extended losses and hit fresh day's low in mid-afternoon trade.

Among secondary indices, the S&P BSE Mid-Cap index fell 0.93%. The S&P BSE Small-Cap index dropped 1.16%. Both these indices underperformed the Sensex.

The breadth, indicating the overall health of the market, was quite weak. There were more than three losers for every gainer. On the BSE, 2,067 shares declined and 651 shares advanced. A total of 116 shares were unchanged.

Power generation and power distribution stocks edged lower. Adani Transmission was down 2.49%, GMR Infrastructure 1.6%, CESC 0.67%, Reliance Power 1.23%, JSW Energy 1.12%, Adani Power 2.42%, Tata Power Company 0.35%, Power Grid Corporation of India 1.61%, NTPC 0.09% and NHPC 1.22%. However, Reliance Infrastructure rose 1.29%.

Shares of psu coal mining major Coal India lost 0.5%.

Metal and mining stocks also dropped. Hindustan Zinc was down 0.32%, Vedanta 2.16%, Hindalco Industries 1.23%, Jindal Steel & Power 3.03%, Tata Steel 1.81%, Hindustan Copper 2.69%, NMDC 3.08%, Steel Authority of India 4% and National Aluminum Company skidded 6.78%. However, JSW Steel gained 0.49%.

Yes Bank dropped 2.67%. With regards to large fraud detected by Punjab National Bank and recent developments in the banking sector, the bank has confirmed that it has nil exposure to the entities or affiliates mentioned in the media reports on the subject specific fraud in the gems & jewellery sector. The clarification was issued during market hours today, 16 February 2018.

Regarding, RBI's notification on Resolution of Stressed Assets - Revised Framework the bank said that pursuant to the implementation of NCLT Framework and IBC - List 1 in June 2017, and subsequently IBC-List 2, the bank has been proactively de-risking its portfolio for borrowers with their aggregate exposures in the Rs 100-1000 crore, and Rs 1000 to Rs 5000 crore bands. As a consequence of these proactive actions and effective monitoring, the bank is of the view that the subject regulation may have only a minimal impact on its portfolio.

On the macroeconomic data front, India's merchandise exports increased 9.1% to $24.38 billion in January 2018 over a year ago. Meanwhile, merchandise imports surged 26.1% to $40.68 billion. The trade deficit jumped 64.6% to $16.30 billion in January 2018 from $9.9 billion in January 2017.

Overseas, European stocks gained. However, it is a shortened week for greater China markets, with mainland China markets remaining shut from 15 to 21 February 2018 and Hong Kong markets shut from 16 to 19 February 2018 for the Lunar New Year. Most of the other Asian markets were also closed for a holiday.

US stocks rose for the fifth day in a row yesterday 15 February 2018, led by technology stocks. They have now recovered about half of their losses during the market's dramatic plunge earlier this month on worries over higher inflation and rising treasury yields. In economic news, the Labor Department said US wholesale prices rose 0.4% in January, the biggest increase since November.

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