Benchmarks continue to trade in narrow range with negative bias

In the extremely range-bound session of trade, Indian equity benchmarks alternating between positive and negative territory, were now trading with bit of negative bias on emergence of profit-booking by cautious investors in recent gainers at record levels ahead of tomorrow’s monthly expiry in the derivatives segment. Besides, a weakening trend at other Asian markets following yesterday’s heavy sell-off in US markets on poor earnings reports negatively impacted trading sentiments. However, losses remained capped as Finance Minister Arun Jaitley has exuded confidence that fiscal deficit targets for current year are likely to be met and manufacturing sector is showing turnaround signs. The Finance Minister also stated that our currency is one of those two global currencies that withstood the might of the US dollar and most of the global currencies are still under pressure. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 953.50 crore on January 27, 2014.

On global front, Asian markets were trading mixed as traders are keeping an eye on Europe as Greece’s new anti-austerity government prepares to face off with its international creditors over its bailout. Overnight US stocks tumbled, with the Nasdaq 100 index falling the most since April, as a drop in durable-goods orders and disappointing results from Caterpillar to Microsoft, heightened concern about the economy's strength. Back home, Indian rupee fell 10 paise to 61.51 against the dollar in early trade due to appreciation of the US currency overseas.

Back on street, stocks from Consumer Durables, Realty and IT counters were supporting the markets’ uptrend, while those from Metal, Capital Goods and Auto counters were adding to the underlying cautious undertone. In scrip specific development, shares of GHCL have surged after reporting a healthy 55% year on year growth in net profit at Rs 41.87 crore for the third quarter ended December 31, 2014. On the other hand, shares of Delta Corp have declined after the company registered a fall of 82.89% in its net profit at Rs 5.59 crore for the quarter under review as compared to Rs 32.67 crore for the same quarter in the previous year.

The market breadth on BSE was negative, out of 2304 stocks traded, 1101 stocks advanced, while 1124 stocks declined on the BSE.

The BSE Sensex is currently trading at 29517.16, down by 53.88 points or 0.18% after trading in a range of 29475.23 and 29583.67. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.60%, while Small cap index up by 0.19%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.78%, Realty up by 1.06%, IT up by 0.90%, TECK up by 0.59% and Infrastructure up by 0.55% while, Metal down by 0.79%, Capital Goods down by 0.42%, Auto down by 0.26%, FMCG down by 0.25% and Bankex down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.57%, TCS up by 1.33%, Sun Pharma Inds. up by 1.05%, Hero MotoCorp up by 0.90% and SBI up by 0.76%. On the flip side, Bharti Airtel down by 2.03%, Tata Motors down by 1.71%, Tata Steel down by 1.56%, Sesa Sterlite down by 1.55% and Cipla down by 1.48% were the top losers.

Meanwhile, the government is working to make India's services sector more competitive and is planning to bring in reform measures in areas like legal and healthcare and will soon finalise a Cabinet note on that. Commerce Secretary Rajeev Kher has said that the government is working on reforms 'with the whole intention of making them more competitive'.

The Commerce Secretary further stated that couple of years ago, the government constituted an inter-ministerial entity for identifying and working on reforms which are required in various services areas in terms of legislation, practice, procedures, etc. He further stated that the services in focus include IT, ITeS, education, healthcare, logistics, media and entertainment, professional services, tourism, and research and development among others.

India has implemented several free trade agreements in goods and services, but services exports still face issues related with mutual recognition agreements. With a focus on enhancing the contribution from the services sector, which accounts for over 50 per cent in the country’s GDP growth, the government is planning to give incentives to the sector in the upcoming foreign trade policy and Budget. Share of India’s services sector in the global services trade is only 3 per cent as compared to 4.6 per cent of China. However, in global exports of services, India’s rank has been improved from 11th to 6th during 2009 and 2013.

The CNX Nifty is currently trading at 8898.75, down by 11.75 points or 0.13% after trading in a range of 8889.10 and 8920.20. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.39%, Asian Paints up by 2.39%, Tech Mahindra up by 1.95%, HCL Tech up by 1.80% and Maruti Suzuki up by 1.31%. On the flip side, Bharti Airtel down by 2.23%, Sesa Sterlite down by 1.93%, Cairn India down by 1.90%, Jindal Steel & Power down by 1.89% and Cipla down by 1.70% were the top losers.

Asian markets were trading mixed; Straits Times rose 0. 0.11%, KOSPI Index increased 0.28%, Nikkei 225 gained 0.17% and Hang Seng was up by 0.39%.  On the flip side, Shanghai Composite declined 0.61%, Taiwan Weighted slipped 0.29%, FTSE Bursa Malaysia KLCI dipped 0.28% and Jakarta Composite was down by 0.12%.