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

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading flat with bit of negative bias as investors and foreign funds were adopting a cautious approach, on the first trading session of fiscal 2015-16 ahead of long week-end. The sentiments remained down-beat 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. Besides, weak global cues also dampened the trading sentiment. However, losses remained capped as 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. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 356.07 crore on March 31, 2015.

On global front, Asian stock markets were lackluster on Wednesday as China's manufacturing remained weak in February and a Japanese central bank survey showed businesses are wary about the economic outlook. Further, Wall Street took a hit overnight as energy and healthcare shares retreated. But highlighting the boon enjoyed by US equities on the back of stronger economic fundamentals, the S&P 500 and Nasdaq registered their ninth straight quarterly advance. Back home, stocks from Infrastructure, Capital Goods and FMCG counters were supporting the markets’ uptrend, while those from IT, Oil & Gas and Metal counters were adding to the underlying cautious undertone.

Meanwhile, the broader markets continue to outperform the benchmark indices- BSE Midcap and Smallcap indices were up 0.7-1.18%. In scrip specific development, Shares of HCL Technologies have declined after the company expects cross currency fluctuations to impact its revenues by 280 basis points (bps) in the third quarter (January-March 2015). On the other hand, shares of eClerx Services have surged after the company’s board agreed to buy CLX Europe SpA, an Italian media content management company, for Euro 25 million (approx. Rs 167 crore).

The market breadth on BSE was positive, out of 2185 stocks traded, 1464 stocks advanced, while 638 stocks declined on the BSE.

The BSE Sensex is currently trading at 27951.31, down by 6.18 points or 0.02% after trading in a range of 27889.02 and 28003.39. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.75%, while Small cap index up by 1.18%.

The gaining sectoral indices on the BSE were Infrastructure up by 0.70%, Capital Goods up by 0.59%, FMCG up by 0.47%, Power up by 0.35% and Consumer Durables up by 0.33% while, IT down by 1.39%, TECK down by 0.88%, Oil & Gas down by 0.62%, Metal down by 0.31% and Auto down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.25%, Dr. Reddys Lab up by 1.87%, Bharti Airtel up by 1.57%, NTPC up by 1.49% and ICICI Bank up by 0.81%. On the flip side, Infosys down by 2.17%, GAIL India down by 1.97%, Maruti Suzuki down by 1.08%, Reliance Industries down by 0.97% and BHEL down by 0.89% were the top losers.

Meanwhile, the government in its bid to revive some defunct manufacturing units in eastern India and boost local output, has approved a policy to supply natural gas at a uniform price to all urea plants. It is expected that the saving in subsidy outgo due to revised energy norms of urea units will be Rs 6,979 crore during the next four years (2015-16 to 2018-19).

The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi approved the major policy intervention, to supply gas at uniform delivered price to all fertilizer plants on the gas grid for production of urea through a pooling mechanism. The government said the cost of urea production at pooled price would be lower than the import price, encouraging existing facilities to produce more than their capacity.

The Department of Fertilizer (DOF) has estimated that an additional urea of around 37.13 lakh metric  tonne will be produced by existing units over the next four years as a result of  price pooling, leading to import reduction and a saving on subsidy worth Rs 1,550 crore. Of the 300 lakh metric tonnes (LMT) urea India consumes annually, it produces about 230 LMT locally and imports the balance.

At present, there are 30 urea producing units in the country, out of which 27 units are gas based and three units viz Mangalore Chemicals & Fertilizers Limited (MCFL), Madras Fertilizers Limited (MFL) and Southern Petrochemicals Industries Limited (SPIC) are Naphtha based. CCEA also gave its approval for the revival of the closed unit of the Barauni of the Hindustan Fertilizer Corporation (HFCL) and Gorakhpur Fertilizer Unit of Fertilizers Corporation of India.

The CNX Nifty is currently trading at 8485.55, down by 5.45 points or 0.06% after trading in a range of 8464.75 and 8497.65. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.18%, NTPC up by 2.01%, Dr. Reddys Lab up by 1.82%, Bharti Airtel up by 1.79% and PNB up by 1.11%. On the flip side, HCL Tech. down by 3.89%, Infosys down by 2.13%, GAIL India down by 1.75%, BHEL down by 1.23% and Reliance Industries down by 1.10% were the top losers.

Asian markets were trading mostly in the red, Nikkei 225 declined 0.54%, Taiwan Weighted decreased 0.57%, Jakarta Composite tumbled 1.06%, KOSPI Index dropped 0.59%, Straits Times shed 0.08% and FTSE Bursa Malaysia KLCI was down by 0.24%. On the flip side, Shanghai Composite increased 1.57% and Hang Seng was up by 0.68%.