Markets trade flat ahead of Budget 2017; Airtel gains over 4%

Benchmark indices were trading on a flat note tracking cues from global markets as investors get spooked from Donald Trump’s protectionist stance.
 
Street also remained cautious ahead of Union Budget this week and key earnings later in the day.
 
At 1:04 pm, the S&P BSE Sensex was trading at 27,853 down 28 points, while the broader Nifty50 was ruling at 8,635, down 6 points.
 
In the broader market, the BSE Midcap gained 0.25% while BSE Smallcap fell 0.07%.

There is exchaustion, and indications that buyers are not comfortable with prices much above 8,600. However, with oscillators still comfortable, the approach can be to “buy on dips, rather than “sell on rallies”, atleast until above 8,600. Alternatively, direct fall below 8,580 could see 8,500-8,470 exposed, but a steep fall is less expected," said Geojit BNP Paribas in a note.
 
On Friday, foreign portfolio investors (FPIs) bought shares worth a net Rs 211.77 crore, while Domestic institutional investors (DIIs) also bought shares worth a net Rs 482.52 crore, provisional data available with BSE showed.
 
Sectors and Stocks
 
L&T gained 0.7% after the company reported a 38.86% rise in consolidated net profit at Rs 972.47 crore for the quarter ended December 31, 2016 against Rs 700.34 crore reported for the corresponding quarter last year.
 

Shares of IT companies such as TCS, Infosys and Wipro slipped up to 4% after US President Donald Trump introduced immigration curbs adding to fears that his 'America First' policy may prove detrimental for Indian software services firms.

Reacting to the development, BSE IT index shed nearly 1% to 9779 points, led by losses in Tanla Solutions (down 4%), Intellect Design Arena (down 2%) and Sonata Software (down 2%). 

Telecom index soared as much as 3.7% in an otherwise weak market as investors remained optimistic on the sector amid reports of a possible merger between Vodafone and Idea Cellular.

Idea Cellular gained over 9% to Rs 85 during the early morning deals. The share price of the company has risen 24% since January 18. RCom, Tata Communication, Bharti Airtel also gained 5.18%, 4.25% and 3.9% respectively.

Shares of Jindal Steel & Power (JSPL) surged as much as 5% in early-morning trade in an otherwise flat market, after the company informed BSE that the company has secured long term coal linkage of a total quantity of 0.5 million tonnes per annum for the next 5 years in the recently concluded coal linkage auction under Sponge Iron sub-sector, conducted by Coal India Limited.

Trump bans migrants from 7 countries
 
Trump’s on Friday signed an executive order that suspends the arrival of refugees for at least 120 days and bars visas for travelers from seven Muslim majority countries including Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen for the next three months.
 
India’s software lobby group, Nasscom, has asked IT majors in America such as Apple, Google, Microsoft and IBM to lobby with Trump, to explain that more jobs would be generated by US companies if they outsource to India. The potential visa curbs come a time when the traditional IT services sector is under pressure from automation and the shift in spending on newer areas such as digital and cloud.
 
FM may hike service tax this Budget
 
Arun Jaitley may hike service tax rate to 16-18% from the current 15% in the Budget, due on Wednesday, as a precursor to the Goods and Services Tax (GST) rollout. The move, that will make flying, eating out, phone bills and a host of other services expensive, would be an attempt to take the rates closer to the proposed tax slabs for GST.
 
The tax slabs decided for the GST are 5, 12, 18 and 28 per cent and taking service tax closer to one of the slabs is a logical move in the Budget, tax experts said.
 
Global Markets
 
Asian stock markets and US stock futures retreated on Monday after President Donald Trump introduced immigration curbs that sparked criticism at home and abroad and added to global fears of increasingly unpredictable US policies.
 
Trump on Friday put a 120-day hold on allowing refugees into the country, an indefinite ban on refugees from Syria and a 90-day bar on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.
 
The executive order led to the detention and deportation of hundreds of people arriving at US airports, huge protests in many US cities and a raft of legal challenges amid confusion over its implementation.
 
Trump defended the move as vital for US security, but his critics have said his action violated US law and the Constitution.
 
MSCI's broadest index of Asia-Pacific shares outside Japan and Japan's Nikkei both slid 0.5% early on Monday.
 
Wall Street ended on a mixed note on Friday after the initial fourth-quarter GDP read fell short of estimates, but managed to record weekly gains of around 1%. The Dow Jones slipped 10 points but held above 20,000-mark.
 
(With inputs from Agencies)