Markets trade flat with positive bias in range-bound session of trade

In the extremely range-bound session of trade, Indian equity benchmarks alternating between positive and negative territory, were now trading flat with bit of positive bias on emergence of buying by funds and retail investors in select stocks amid firm global cues. Meanwhile, the broader markets outperformed equity benchmarks with the BSE Midcap and Smallcap indices gaining over half a percent each. Sentiment on the street improved after two key Finance Ministry officials said that the case for easing of interest rates by the Reserve Bank of India (RBI) had strengthened with inflation slowing and the focus staying on fiscal consolidation. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 424.79 crore on March 02, 2015. However, profit-booking by investors in selected stocks, disappointing economic data with growth in eight core industries slowing to 13-month low of 1.8% in January dampened trading sentiments. Furthermore, fiscal deficit rose to Rs 5.68 lakh crore in April-January period, breaching the budget estimate by 107% which may call for harder measures by the government to meet the target of 4.1% of the GDP for full 2014-15 financial year, also weighed on the sentiment.

On global front, Asian stocks edged higher, bolstered by another record day on Wall Street, while a resurgent yen helped knock the U.S. dollar index off an 11-year high. Back home, Indian rupee depreciated by 4 paise to trade at 61.91 against the US dollar in early trade, extending yesterday's weakness due to sustained demand for the American currency from importers.

Back on street, stocks from Oil & Gas, Consumer Durables and IT counters were supporting the markets’ uptrend, while those from Metal, Auto and PSU counters were adding to the underlying cautious undertone. In scrip specific development, shares of Jubilant Life Sciences have soared after the company received final approval from the US Food and Drug Administration (US FDA) for generic Montelukast Sodium chewable tablets used in the treatment of asthma and to relieve symptoms of seasonal allergies. On the other hand, shares of Mahindra & Mahindra have declined after the company reported a drop of 9.8% in auto sales numbers, which stood at 38,033 units during February 2015, as against 42,166 units during February 2014.

The market breadth on BSE was positive, out of 2279 stocks traded, 1400 stocks advanced, while 792 stocks declined on the BSE. 

The BSE Sensex is currently trading at 29491.78, up by 32.64 points or 0.11% after trading in a range of 29364.87 and 29530.69. 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 0.74%, while Small cap index up by 0.86%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.93%, Consumer Durables up by 0.86%, IT up by 0.85%, TECK up by 0.74% and FMCG up by 0.36% while, Metal down by 1.09%, Auto down by 0.89%, PSU down by 0.48%, Bankex down by 0.45% and Realty down by 0.35% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.24%, Sun Pharma Inds. up by 2.13%, Reliance Industries up by 1.89%, Dr. Reddys Lab up by 1.87% and Wipro up by 1.67%. On the flip side, Coal India down by 4.37%, Axis Bank down by 2.35%, Mahindra & Mahindra down by 2.30%, Tata Motors down by 1.40% and BHEL down by 0.66% were the top losers.

Meanwhile, although the first full year budget of the new government has been termed pragmatic, it failed to turn heads of global ratings agencies and Standard & Poor's (S&P) ruled out a rating upgrade for India. Its senior Director stated that 'In terms of the structural effects of the budget, we see the improvement has been not as great as it could have been... We don't see the rating going up in the next year or so'. Though, the rating agency has lauded the budget by saying that it highlights the government's commitment to keeping the fiscal deficit low despite lower-than-expected revenue growth. S&P currently rates India at 'BBB-minus', its lowest investment grade rating, with a 'Stable' outlook.

Similarly, the other rating agency Fitch said the government's fiscal consolidation strategy spelt out in Budget is 'less aspiring' than in the past. It further stated that 'The medium-term fiscal consolidation strategy is less aspiring than in the past, which is negative from a sovereign rating perspective.' Fitch Ratings said while the budget shows this government's continued orientation on implementation of structural reforms, it could have been more ambitious on the fiscal front

All the three major global ratings agencies Moody's, Crisil and Care Ratings had red-flagged the country's delayed fiscal consolidation roadmap after the Finance Minister set the country's fiscal deficit target for the 2015-16 fiscal year at 3.9% of gross domestic product (GDP) and said it would reduce the target gradually to 3% by 2017-18, a year later than previously estimated.

Moody's said the Budget has prioritised growth over fiscal consolidation but it may not have any impact on the country's sovereign rating. Though, it said that Union Budget 2015-16 is credit positive for corporates and a mixed bag for the banks. The government proposal to improve governance and set up an autonomous bank board bureau and proposed introduction of a new bankruptcy law would also be credit positive.

The CNX Nifty is currently trading at 8957.20, up by 0.45 points or 0.01% after trading in a range of 8925.55 and 8969.80. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.36%, Reliance Industries up by 1.93%, Dr. Reddys Lab up by 1.85%, Sun Pharma up by 1.85% and Wipro up by 1.58%. On the flip side, Coal India down by 4.40%, Mahindra & Mahindra down by 2.48%, Ambuja Cement down by 2.33%, Axis Bank down by 2.11% and Tata Motors down by 1.67% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index rose 0.15%, Hang Seng advanced 0.02%, FTSE Bursa Malaysia KLCI increased 0.31%, Jakarta Composite gained 0.24% and Straits Times was up by 0.74%. On the flip side, Nikkei 225 decreased 0.18%, Shanghai Composite declined 0.92% and Taiwan Weighted was down by 0.07%.