Benchmarks trade slightly in the red in early deals

Indian equity benchmarks, after a positive start, have entered into red terrain and are trading with modest cut in early deals on Thursday as investors opted to book profit after four sessions of rally. Though, markets made a positive start as the Moody's Investors Service has changed India’s outlook to positive from stable. Though, the country’s Baa3 rating (the lowest investment grade) was affirmed but the outlook was revised from stable on increasing probability that actions by policymakers will enhance the country’s economic strength and, in turn, the sovereign’s financial strength over coming years. Meanwhile, the Chief Economic Adviser Arvind Subramanian has said that big bang reforms are not applicable to a country like India as there was multiple veto centres, multiple decision making centres and was very difficult to pass through a decisive change.

On the global front, the US markets ended modestly in green after a choppy trade, reacting to the minutes of the Federal Reserve’s March meeting, which indicated that officials are divided over when to begin raising interest rates.  However, most of the Asian equity indices were trading mostly in the red at this point of time, though Japanese market was trading up on weakness in yen against dollar.

Back home, on the sectoral front, banking, metal and infrastructure witnessed the maximum gain in trade, while healthcare, realty and software 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 1016 shares on the gaining side against 874 shares on the losing side while 76 shares remain unchanged.

The BSE Sensex is currently trading at 28685.01, down by 22.74 points or 0.08% after trading in a range of 28622.44 and 28875.08. There were 12 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.20%, while Small cap index up by 0.23%.

The gaining sectoral indices on the BSE were Bankex up by 0.33%, INFRA up by 0.29%, Metal up by 0.25% and PSU up by 0.02% while, Healthcare down by 1.70%, Realty down by 0.39%, IT down by 0.23%, FMCG down by 0.19% and Capital Goods down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.71%, Hindustan Unilever up by 1.40%, ICICI Bank up by 0.98%, Coal India up by 0.91% and Axis Bank up by 0.86%. On the flip side, Cipla down by 2.09%, Sun Pharma down by 2.07%, GAIL India down by 1.66%, Dr. Reddys Lab down by 1.22% and NTPC down by 0.87% were the top losers.

MEanwhile, India’s central bank governor, Raghuram Rajan, being extremely positive on the economy, pointed to the green shoots that have now started showing up in the investment climate. Besides, he also asserted that while the rates of stalled projects were coming down, investment intentions were picking up with the economy beginning to see the start of an investment cycle. Data put out by Centre for Monitoring Indian Economy (CMIE) on Tuesday also points out to a revival in investment growth. He however, cautioned that these were just early signs and not calls for celebration.

Further, the governor also refrained from commenting on the new series on economic growth numbers by the Central Statistics Office (CSO) and said that he was trying to understand the new series as he felt that determining potential growth wasn’t that easy with such a short series of data.

The governor emphasized that as the growth process for the country kick-starts, the government would have to be mindful of on issues relating to fuelling such expansion with sufficient funding options. He also drew some attention of government to capital needs of PSU banks and highlighted that there was some room for the banks, especially the state-run ones to access the markets to raise capital from the market over and above what they can do from the government.

The CNX Nifty is currently trading at 8702.75, down by 11.65 points or 0.13% after trading in a range of 8682.45 and 8759.90. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.14%, Tata Steel up by 1.99%, Hindustan Unilever up by 1.39%, Yes Bank up by 1.32% and Indusind Bank up by 1.11%. On the flip side, Lupin down by 2.98%, Sun Pharma down by 2.16%, GAIL India down by 2.05%, Cipla down by 2.00% and HCL Tech. down by 1.29% were the top losers.

Asian markets were trading mostly in the red; Shanghai Composite declined 49.58 points or 1.24% to 3,945.24, Jakarta Composite decreased 3.78 points or 0.07% to 5,482.80, FTSE Bursa Malaysia KLCI shed 3.44 points or 0.19% to 1,846.87, Straits Times slipped 3.23 points or 0.09% to 3,457.45 and KOSPI Index was down by 2.84 points or 0.14% to 2,056.42.

On the flip side, Taiwan Weighted increased 18.16 points or 0.19% to 9,590.13, Nikkei 225 rose 137.36 points or 0.69% to 19,927.17 and Hang Seng was up by 962.37 points or 3.67% to 27,199.23.