Markets continue to trade flat in afternoon session

Indian equity benchmarks continue to trade flat with positive bias in afternoon session on selective buying by funds and retail investors amid weak Asian cues. Though, most of the sectoral indices were trading in green, markets' gains remained capped on account of selling witnessed in healthcare, capital goods and auto stocks. Concerns such as weak monsoon, FIIs capital outflow, rupee depreciation against rupee and increasing crude oil prices owing to the prevailing crises in Iraq weighed on the sentiments. The government expects that oil prices will rise as high as $120 per barrel for several months because of fighting in Iraq. However, investors were seen piling up positions in consumer durables, metal and oil and gas stocks. Sentiments got some support on Petroleum Minister Dharmendra Pradhan’s statement that fuel supplies will not be impacted by the conflict in Iraq. Consumer Durables was top gaining index on BSE up by 1.75% whereas healthcare was top loser trading lower by 0.32%. 

Orchid Chemicals and Pharmaceuticals has surged around 6% to Rs 76 after the company said it has received US Food and Drug Administration (US FDA) approval for Eszopiclone tablets. Further, Atul Auto was trading higher by over 4% to Rs 484 after the company said its board will consider sub-division of equity shares of the company of face value of Rs 10 each into a lower denomination.

On global front, Asian equity indices were trading in red Straits Times down by 0.10% and Nikkei down by 0.10%. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,600 and 25,500 levels respectively. The market breadth on BSE was negative, out of 2,534 stocks traded, 1,179 stocks advanced, while 1,258 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,233.56 up by 31.76 points or 0.13% after trading in a range of 25,266.08 and 25,140.97. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.31%, while Small cap index up by 0.17%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.74%, Metal up by 0.49%, Bankex up by 0.47%, Oil and Gas up by 0.45% and Infrastructure up by 0.33%. On the flip side, Healthcare down by 0.32%, Capital Goods down by 0.15%, Auto down by 0.08% and FMCG down by 0.03% were the losing indices on BSE.    

The top gainers on the Sensex were Axis Bank up by 1.91%, Bajaj Auto up by 1.65%, ONGC up by 1.47%, Cipla up by 0.89% and Dr Reddy’s Lab up by 0.72%. On the flip side, Tata Power down by 1.63%, Sun Pharma down by 1.63%, M&M down by 0.91%, Tata Motors down by 0.58% and HUL down by 0.58% were the top losers on the BSE.

Meanwhile, With a view to boost Indian industrial production, the government is planning to exempt the National Investment and Manufacturing Zones (NIMZs) from certain restrictive labour laws. India's labour market is over regulated and some provisions are not well suited with the modernized business.

The proposal to exempt NIMZs came after the commerce and industry ministry has expressed the need to resolve issues related to the few provisions of the labour laws which have been impacting the growth of manufacturing sector. Over the past two fiscal years, manufacturing sector has been struggling with slowdown and high borrowing cost and weak investment due to policy uncertainty were the leading factors responsible for low industry output growth.

The industrial, having around 25% share in the economy, grew by 0.35% to Rs.15 lakh crore in FY14 as compared to 1% growth in previous year.  Within industrial sector, manufacturing contracted by 0.7% in the reported fiscal year as against a marginal growth of 1.1% in FY13. Mining continued to witness contraction at 1.4% in FY 14 as against 2.2% de-growth in the FY13.

Meanwhile to boost India’s manufacturing sector, the government has set the National Manufacturing Policy (NMP), which aimed at raising the share of manufacturing to 25 percent of GDP by 2022 from the current 16 percent. The NMP envisages setting up of NIMZs, which are industrial townships, benchmarked to the best manufacturing hubs in the world.The CNX Nifty is currently trading at 7,551.70 up by 11 points or 0.15% after trading in a range of 7,557.95 and 7,520.10. There were 30 stocks advancing against 20 declining on the index.

The top gainers of the Nifty were Mc-Dowell up by 2.88%, Axis Bank up by 1.99%, Kotak Bank up by 1.70%, Cairn India up by 1.58% and Bajaj Auto up by 1.53%. On the flip side, Sun Pharma down by 1.66%, Tata Power down by 1.49%, BPCL down by 1.00%, HCL Tech down by 0.96% and M&M down by 0.79% were the major losers on the index.

Asian equity indices were trading in red; Straits Times down by 0.10% to 3,265.99, Nikkei down by 0.10% to 15,345.84, Taiwan Weighted down by 0.46% to 9,273.79, Jakarta Stock Index down by 0.18% to 4,855.63 and Shanghai Composite down by 0.30% to 2,017.13. While, Hang Seng up by 0.22% to 23,217.59,