Benchmarks trim losses to trade in green

Indian equity markets trimmed losses and started trading in green in the late afternoon session on account of buying in frontline blue chip counters. Traders were seen piling positions in FMCG, Auto and Power stocks while selling was witnessed in Metal, Capital Goods and TECK sector stocks. In scrip specific development, Pipavav Defence and Offshore Engineering Company was locked in lower circuit limit after Reliance Infrastructure acquired the company with sole management control at a discount to previous session’s closing price. Cairn India was trading in red as foreign brokerages have downgraded the company after it announced cutting capital expenditure for next fiscal year. The market will remain closed tomorrow i.e. on March 6 on account of ‘Holi’ festival followed by weekly holiday of Saturday and Sunday.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,900 and 29,400 levels respectively. The market breadth on BSE was negative in the ratio of 1193:1489 while 124 scrips remained unchanged.

The BSE Sensex is currently trading at 29409.44, up by 28.71 points or 0.10% after trading in a range of 29162.47 and 29496.60. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.51%, while Small cap index up by 0.26%.

The gaining sectoral indices on the BSE were FMCG up by 1.51%, Auto up by 0.51%, Power up by 0.21%, Oil & Gas up by 0.08%, INFRA up by 0.03% while, Metal down by 1.13%, Capital Goods down by 0.87%, TECK down by 0.55%, IT down by 0.43%, PSU down by 0.34% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.03%, Sun Pharma up by 2.38%, Wipro up by 1.64%, Cipla up by 1.56% and Sesa Sterlite up by 1.15%. On the flip side, Hindalco down by 2.55%, Coal India down by 1.91%, TCS down by 1.53%, Bharti Airtel down by 1.40% and Larsen & Toubro down by 1.03% were the top losers.

Meanwhile, in a major boost to India's sovereign outlook, global rating agency Moody's underscored that the new 'inflation targeting' mechanism is a 'credit positive' development and it would make RBI's monetary policy tools much more effective. According to the agency, inflation targeting is forward looking as this would encourage a focus on future, rather than past, price trends.

Moody's underscored that quantitative inflation targeting would foster transparency and predictability in monetary policy, as capital market participants, businesses and the public understand the drivers of central bank actions and hence has termed this move as “credit positive”. Additionally, it emphasized that increase in monetary policy transparency and effectiveness would just lessen volatility in international capital flows into India and support institutional strengthening via accountability.

Moody's, while cautioning that unchecked inflation would have a greater chance of hurting growth, added that inflation between 2011 and 2014 inflation was largely driven by food and commodity prices but it ultimately compromised growth.

However, as per the present monetary policy framework agreement between the RBI and the Government, RBI will target to lower inflation to below 6 per cent by January 2016 and further to 4 per cent with a band of (+/-) 2% in 2016-17. According to Prime Minister, Narendra Modi that the new mechanism would increase the predictability and effectiveness of RBI's monetary policy, while the effectiveness of its monetary tools would increase because 'inflation targeting' would take into account future -- rather than past-- price trends.

The CNX Nifty is currently trading at 8908.75, down by 13.90 points or 0.16% after trading in a range of 8849.35 and 8949.05. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.77%, Lupin up by 1.96%, Sun Pharma up by 1.85%, Wipro up by 1.43% and HCL Tech up by 1.28%. On the flip side, NMDC down by 3.85%, Ultratech Cement down by 3.83%, Hindalco down by 2.65%, Grasim Industries down by 2.51% and Cairn India down by 2.13% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 272.34 points or 1.11% to 24,193.04, Shanghai Composite decreased 31.06 points or 0.95% to 3,248.48, Taiwan Weighted decreased 26.64 points or 0.28% to 9,595.09, FTSE Bursa Malaysia KLCI decreased 14.82 points or 0.81% to 1,810.72 and Straits Times decreased 11.4 points or 0.33% to 3,404.13.

On the other hand, KOSPI Index increased 0.09 points or 0% to 1,998.38, Jakarta Composite increased 15.78 points or 0.29% to 5,463.84 and Nikkei 225 increased 48.24 points or 0.26% to 18,751.84.

The European markets were trading in green; UK’s FTSE 100 increased 6.02 points or 0.09% to 6,925.26, France’s CAC increased 18.16 points or 0.37% to 4,935.51 and Germany’s DAX increased 39.54 points or 0.35% to 11,429.92.