Benchmarks trade flat in early deals

Indian equity benchmarks have made a cautious start with frontline indices trading near their neutral lines in early deals on Wednesday as traders remained concerned with the core sector growth dipping to a 17-month low in February at 1.4 per cent compared to 1.8 per cent in January, pulled down by contraction in the production of steel, fertilisers and refinery products. However, some support came in with reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 356.07 crore, while Domestic institutional investors (DIIs) bought shares worth a net Rs 283.71 crore on Tuesday, as per provisional data. Meanwhile, the government is believed to have met the fiscal deficit target of 4.1 percent of GDP for 2014-15, helped by last minute payment of Rs 10,808 crore by telecom companies for spectrum and tax receipts in March.

On the global front, the US markets went for some profit booking and ended lower in last session, partly offsetting the strong upward move that was seen in the previous session. Though there were mixed set of economic data but traders were worried about the outlook for interest rates. Asian markets were trading mostly in the red at this point of time after some of them posted steepest quarterly advance since 2013 in last session. The Chinese market was trading in green after the nation’s factory activity surprisingly expanded in March to 50.1 from February’s 49.9.

Back home, on the sectoral front, capital goods, infrastructure and healthcare witnessed the maximum gain in trade, while software, technology and metal remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1268 shares on the gaining side against 506 shares on the losing side while 62 shares remain unchanged.

The BSE Sensex is currently trading at 27969.84, up by 12.35 points or 0.04% after trading in a range of 27889.02 and 27992.96. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.77%, while Small cap index up by 1.04%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.87%, Infrastructure up by 0.72%, Healthcare up by 0.71%, Consumer Durables up by 0.45%, Power up by 0.39% while, IT down by 1.34%, TECK down by 0.82%, Metal down by 0.25%, Oil & Gas down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 1.74%, Bharti Airtel up by 1.66%, Sun Pharma up by 1.16%, NTPC up by 1.12% and Larsen & Toubro up by 1.01%. On the flip side, Infosys down by 2.08%, GAIL India down by 1.94%, Wipro down by 0.73%, TCS down by 0.48% and Reliance Industries down by 0.45% were the top losers.

Meanwhile, credit rating agency, Moody’s in its report recently underscored that government-approved measures to revive and improve the utilization of stranded gas-based power generation plants in the country, are credit positive for banks since they have substantial credit exposure to such plants. This report comes a week after central government approved a financial support to the private companies to help them use costly LNG for generating electricity, in a move which will revive Rs 60,000 crore of stranded power projects.

The global credit rating agency pointed that biggest beneficiaries of these measures of government will be IDBI Bank, State Bank of India and ICICI Bank. The agency highlighted that power generation plants, which use re-gasified liquefied natural gas (RLNG) as their fuel base have been facing significant availability and pricing challenges since actual domestic production of LNG have been significantly lower than the assumptions made when the plants were set up.

Moreover, it highlighted that importing LNG at prevailing prices has proved difficult because it escalates generation costs, which, in turn, raises prices that is beyond the reach of buyers. Among Moody's rated banks, IDBI Bank has an especially high exposure to gas-based power plants and would be the key beneficiary of these measures. Meanwhile, SBI and ICICI Bank which have exposure to Ratnagiri Power Plant, which is the largest gas-based power plant in India also would benefit from this move.

The CNX Nifty is currently trading at 8487.35, down by 3.65 points or 0.04% after trading in a range of 8464.75 and 8490.85. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 1.78%, Bharti Airtel up by 1.77%, NTPC up by 1.46%, Asian Paints up by 1.38% and PNB up by 1.18%. On the flip side, HCL Tech down by 3.20%, Infosys down by 2.15%, GAIL India down by 1.79%, Wipro down by 1.06% and NMDC down by 0.97% were the top losers.

Asian markets were trading mostly in the red, Nikkei 225 declined 174.47 points or 0.91% to 19,032.52, Taiwan Weighted decreased 62.27 points or 0.65% to 9,524.17, Jakarta Composite tumbled 60.05 points or 1.09% to 5,458.62, KOSPI Index dropped 12.83 points or 0.63% to 2,028.20, Straits Times shed 5.64 points or 0.16% to 3,441.37 and FTSE Bursa Malaysia KLCI was down by 3.98 points or 0.22% to 1,826.80.

On the flip side, Shanghai Composite increased 51.95 points or 1.39% to 3,799.85 and Hang Seng was up by 163.74 points or 0.66% to 25,064.63.