Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in late morning session on absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks ahead of the Federal Reserve policy statement due later today for clues to when the Fed will hike interest rates. Sentiment on the street weakened after Business Outlook survey, conducted by global financial information provider Markit, said that corporates in India are not too optimistic about production growth in various sectors for the next one year. Besides, traders turn cautious after IMF chief Christine Lagarde has said that a possible interest rate hike by the US Federal Reserve could pose risks to market stability in emerging economies, including India, even if it is well managed by central banks. However, losses remained capped as SBI Composite Index showed a significant growth in output both in terms of month-on-month and yearly basis in March, while the monthly index illustrated robust growth of 58.5 in March 2015, from 47.6 in February 2015, the yearly SBI Composite Index for March 2015 inched up to 54.6 from 53.5 in February 2015, a 6-month high.  Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 265.52 crore on March 17, 2015.

On global front, Chinese stocks rose to the highest level in seven years as investors held out hope authorities would unleash new economic stimulus while most other Asian indexes held steady before the conclusion of a key Fed meeting. Back home, Indian rupee strengthened by three paise to 62.67 against the US dollar in early trade on sustained selling of the Greenback by exporters.

Back on street, stocks from Metal, Capital Goods and Oil & Gas counters were supporting the markets’ uptrend, while those from Power, Auto and IT counters were adding to the underlying cautious undertone. In scrip specific development, shares of Madhucon Projects surged after the company received the letter of award from National Highway Authority of India (NHAI) for the project valued Rs 397 crore in Tamil Nadu. Furthermore, Diamond Power Infrastructure rose, extending its past two days rally after the company received orders worth of Rs 332 crore from Assam and Nagaland governments.

The market breadth on BSE was negative, out of 2199 stocks traded, 1028 stocks advanced, while 1063 stocks declined on the BSE.

The BSE Sensex is currently trading at 28615.23, down by 121.15 points or 0.42% after trading in a range of 28599.88 and 28806.97. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index up by 0.37%.

The gaining sectoral indices on the BSE were Metal up by 0.30%, Capital Goods up by 0.02% and Oil & Gas up by 0.01% while, Power down by 0.55%, Auto down by 0.34%, IT down by 0.28%, Bankex down by 0.13% and FMCG down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 1.89%, SBI up by 0.78%, Hero MotoCorp up by 0.59%, Larsen & Toubro up by 0.27% and Cipla up by 0.20%. On the flip side, NTPC down by 2.12%, Tata Motors down by 1.32%, HDFC down by 1.32%, ONGC down by 1.24% and Hindustan Unilever down by 1.22% were the top losers.

Meanwhile, the SBI Composite Index showed a significant growth in output both in terms of month-on-month and yearly basis in March, while the monthly index illustrated robust growth of 58.5 in March 2015, from 47.6 in February 2015, the yearly SBI Composite Index for March 2015 inched up to 54.6 from 53.5 in February 2015, a 6-month high. SBI in its research note said that “Robust recovery in the month on month index may be attributed to seasonal factors as March sequential momentum is always higher.”

The research report said revival in automobile sales, capital goods and basic goods production and possible upturn in the credit offtake to micro and small corporates segment, real estate, NBFCs and construction sector highlights possible sustainable recovery in economic activity in coming months. It further added that manufacturing activity is getting robust with a positive growth for the third consecutive month since November 2014. The report said that IIP has averaged 3.2 per cent growth since November 2014 till January and if February and March numbers also reveal moderate growth as per our prognosis, then April numbers will be most crucial.

The Composite Index, an indicator for tracking India's manufacturing activity captures two components of the manufacturing cycle - month-on-month and year-on-year-growth on a scale of 0 to 100. Index above 50 implies growth over previous respective period and less than 50 will suggest a contraction over respective period. It has been developed on the basis of the SBI's internal loan portfolio, which mirrors the credit demand in the country, and other data sets available in public domain.

The CNX Nifty is currently trading at 8686.25, down by 37.05 points or 0.42% after trading in a range of 8681.35 and 8747.25. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.18%, Jindal Steel & Power up by 2.18%, Sesa Sterlite up by 1.92%, BPCL up by 1.11% and PNB up by 0.87%. On the flip side, NTPC down by 2.09%, BHEL down by 1.47%, ONGC down by 1.43%, HDFC down by 1.38% and Tata Motors down by 1.36% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index rose 0.10%, FTSE Bursa Malaysia KLCI increased 0.54%, Nikkei 225 advanced 0.11%, Shanghai Composite gained 0.86%, Taiwan Weighted surged 1.06% and Hang Seng was up by 1.02%. On the flip side, Jakarta Composite decreased 0.26% and Straits Times was down by 0.1%.