Markets recover from day’s low; trade in green with slender gains

Local equity markets recovering from day’s low were trading in green, albeit slender gains of around one tenth of a percent amidst positive global set-up. Sustained buying activity in stocks from Capital Goods, Banking and Power counters mainly were supporting sentiment at local equity markets, however selling in FMCG, Realty and Consumer Durable counters were limiting further gains in equity markets. Off day’s low, while Sensex was trading shy of the crucial 29,400, Nifty was trading comfortably above psychologically crucial 8,900 level, with gains of over one tenth of a percent. Meanwhile, broader indices too were trading higher with gains in the range of 0.30%-0.60%.

Though the markets started on an extremely upbeat note, but the euphoria gradually fizzled out as market-participants booked profit at higher levels. Concerns about government setting higher than expected fiscal deficit target for 2015-16 as part of federal budget unveiled on Saturday, mainly weighed on the sentiment. The budget announced fiscal deficit target of 3.9% of gross domestic product for the fiscal year starting in April, higher than expected 3.6%. Also the government stated that it would be reducing deficit to 3% of GDP by 2017/18 fiscal year, which is a year later than expected.

Meanwhile, somber factory output data also kept the gains in check. Manufacturing growth slipped to a five-month low in February as the pace of order-flows slowed and companies also reduced their workforce numbers during the month. The headline HSBC India Purchasing Managers' Index (PMI) -- a composite gauge designed to give a single-figure snapshot of manufacturing business conditions -- fell from 52.9 in the previous month to a five-month low of 51.2 in February.

On the global front, Asian stocks edged higher on Monday as China’s weekend interest rate cut partially offset soft US data. China on Saturday stepped up its easing tempo and cut its lending and deposit rates as the world's second largest economy tries to ward off deflation.

Back home, the BSE Sensex is currently trading at 29399.97, up by 38.47 points or 0.13% after trading in a range of 29266.02 and 29576.32. There were 14 stocks advancing against 16 stocks declining on the index.  Overall, the market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1094:905; while 31 shares remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.64%, while Small cap index up by 0.31%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.64%, Bankex up by 1.24%, Power up by 0.81%, Infra up by 0.77% and PSU up by 0.53% while, FMCG down by 1.92%, Realty down by 1.21%, Consumer Durables down by 1.13%, Auto down by 0.67% and Metal down by 0.56% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.87%, Larsen & Toubro up by 3.57%, Cipla up by 2.73%, BHEL up by 2.31% and HDFC Bank up by 2.19%. On the flip side, ITC down by 3.83%, Bajaj Auto down by 3.74%, GAIL India down by 2.03%, Hero MotoCorp down by 2.02% and Tata Motors down by 1.70% were the top losers.

Meanwhile, snapping seven consecutive monthly cuts since August, Oil marketing Companies (OMCs) hiked jet fuel prices, which constitute 40% of an airline’s operating cost, by steep 8.2% or Rs 3,849.97 per kilolitre to Rs 50,363 per kl in country’s national capital, Delhi. Prior to latest hike, ATF price had been cut by Rs 23,648.73 or 33% in seven reductions since August 2014. Even after today's hike, jet fuel rates continue to remain lowest since February 2011.

Simultaneously, the oil firms also hiked the price of non-subsidized or market-priced domestic cooking gas (LPG) by Rs 5 to Rs 610 per 14.2-kg cylinder in Delhi. The increase comes on back of seven straight reductions in rates of non-subsidized or market-priced LPG since August. The current quota of subsidized rates remains to be 12 cylinders/ per year. A subsidized LPG refill currently costs Rs 417 in Delhi. Notably, in the seven monthly reductions, non-domestic LPG rates had been slashed by Rs 317.50 per cylinder, bringing the price to a three-year low.

State-owned fuel retailers, Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) have revised jet fuel and non-subsidised LPG prices on the first of every month based on average imported cost and rupee-dollar exchange rate.

The CNX Nifty is currently trading at 8920.55, up by 18.70 points or 0.21% after trading in a range of 8885.45 and 8972.35. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 5.14%, BPCL up by 4.88%, ACC up by 3.81%, Axis Bank up by 3.73% and Grasim Industries up by 3.62%. On the flip side, ITC down by 3.92%, Bajaj Auto down by 3.52%, Jindal Steel & Power down by 3.01%, Tata Motors down by 2.90% and Bank Of Baroda down by 2.81% were the top losers.

Asian markets were trading mostly higher; KOSPI Index trading higher by 11.01 points or 0.55% to 1,996.81; Jakarta Composite trading higher by 18.6 points or 0.34% to 5,468.90; Shanghai Composite trading higher by 22.56 points or 0.68% to 3,332.86; Nikkei 225 trading higher by 28.94 points or 0.15% to 18,826.88 and Hang Seng trading higher by 40.97 points or 0.16% to 24,864.03. On the flip side, Taiwan Weighted was trading lower by 20.74 points or 0.22% to 9,601.36;  Straits Times was trading lower by 4.3 points or 0.13% to 3,398.56 and  FTSE Bursa Malaysia KLCI edged lower by 3.77 points or 0.21% to 1,817.44.