Benchmarks bounce back into positive territory; albeit with slender gains

Bouncing back into positive territory, local equity markets were trading with slender gains of less than one tenth of a percent which lifted Sensex and Nifty above crucial 28,700 and 8,700 levels respectively. However, further gains remain limited on account of prevailing caution ahead of the release of February CPI and January IIP data, which is scheduled to be released on Thursday. Additionally, lack of directional cues also weighed on the sentiment. In the extremely volatile session of trade, broader indices underperforming larger counterparts were trading with losses.

Market-participants drew some relief from Q3 CAD data, which narrowed down on sequential basis on account of net exports of services which picked up in q-o-q terms on the back of an improvement in net earnings through travel and software services, and lower net outflows under primary income (profit, dividend and interest). In an encouraging development, India's current account deficit reached $8.2 billion, or 1.6% of gross domestic product in the October-December quarter, lower than the previous quarter, when the deficit reached $10.1 billion or 2.0% of GDP.

On the global front, Asian stocks fell to a two-month low on Wednesday as nervous markets recoiled on worries about an earlier US interest rate hike. Renewed concern about Greece’s debt talks with euro zone partners and deflationary pressures in China have also weighed on emerging markets. China will release industrial output, retail sales and investment data later in the day.

Closer home, most of the sectoral indices on BSE were reeling under pressure, stocks from Metal, Realty and Public Sector Undertaking counters witnessed the worst drubbing. On the flip side, Technology, Infrastructure and Fast Moving Consumer Goods counters were the prominent gainers of the session.

The BSE Sensex is currently trading at 28731.48, up by 21.61 points or 0.08% after trading in a range of 28626.96 and 28815.95. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.11%, while Small cap index down by 0.03%.

The gaining sectoral indices on the BSE were TECK up by 0.69%, IT up by 0.47%, INFRA up by 0.42%, FMCG up by 0.39% and Power up by 0.30% while, Metal down by 1.28%, Realty down by 0.67%, PSU down by 0.38%, Auto down by 0.36% and Oil & Gas down by 0.30% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.27%, Hindustan Unilever up by 1.77%, Mahindra & Mahindra up by 1.25%, HDFC up by 1.20% and NTPC up by 1.10%. On the flip side, Hindalco down by 4.24%, Cipla down by 1.97%, ONGC down by 1.46%, Sesa Sterlite down by 1.44% and Tata Motors down by 1.36% were the top losers.

Meanwhile, the government has revived plans to set up a fertilizer plant in Iran with an investment of about Rs 5,000 crore. The proposal is to set up a urea/ammonia JV Project with capacity to produce 1.3 MT Urea for import to India. However, the government has requested the Persian Gulf nation to offer long term gas contract for manufacturing the soil nutrient at feasible rates.

The government has nominated companies like Rashtriya Chemicals and Fertilizers (RCF), Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) and Gujarat State Fertilizers Corporation (GSFC) for the proposed 1.3 million tonne urea joint venture plant.  These Indian companies’ have appointed SBI Capital to identify the Iranian partners for the Joint Venture Project.

Notably, both the nations have been in discussions for setting up of a fertilizer plant in the Persian Gulf nation since 2013, but talks failed to fructify stuck over gas price issue. However, India has revived its plans after Iranian authorities approached the government officials and expressed willingness to partner with them in this project.

The proposed urea joint venture plant in Iran would be on the similar lines of OMIFCO (Oman India Fertiliser Company) in Oman, where the Indian entities have jointly invested in urea manufacturing with local player. The Indian government has a long term off-take arrangement with OMIFCO for sourcing urea, which is produced at lower rates compared to domestic cost of production

The CNX Nifty is currently trading at 8721.35, up by 9.30 points or 0.11% after trading in a range of 8686.35 and 8747.05. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.61%, HCL Tech. up by 2.07%, Hindustan Unilever up by 1.86%, Zee Entertainment up by 1.42% and Mahindra & Mahindra up by 1.37%. On the flip side, Hindalco down by 4.27%, Cipla down by 2.01%, Cairn India down by 1.97%, Lupin down by 1.83% and ONGC down by 1.38% were the top losers.

Asian markets were trading mostly lower; Hang Seng trading lower by 174.91 points or 0.73% to 23,722.07; Jakarta Composite trading lower by 50.37 points or 0.92% to 5,412.56; Straits Times trading lower by 20.91 points or 0.62% to 3,377.35; Taiwan Weighted trading lower by 13.35 points or 0.14% to 9,523.18; FTSE Bursa Malaysia KLCI trading lower by 8.5 points or 0.47% to 1,781.23;  Shanghai Composite trading lower by 5.87 points or 0.18% to 3,280.20 and  KOSPI Index trading lower by 3.94 points or 0.2% to 1,980.83. On the flip side, Nikkei 225 up by 58.41 points or 0.31% to 18,723.52 was the lone gainer amongst Asian pack.