Markets trade flat with positive 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 positive bias on increasing buying by funds and retail investors in select stocks. The sentiments turned optimistic 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. Some support also came with Finance Minister Arun Jaitley statement that the proposal to allow railways and highways to issue tax-free bonds has been cleared, and the government is committed to pushing the land acquisition bill to promote growth and generate jobs. At present, Sensex and Nifty were trading above the crucial 28,700 and 8,700 levels respectively, with gains of over 0.05%. Meanwhile, the broader markets were seen outperforming the benchmark indices as the BSE mid-cap index advanced 0.45 per cent and the small-cap index gained 0.60 percent.

On global front, Asian shares were mostly in the red as a near 7 percent slide in oil prices tapered the impact of an inspiring lead from Wall Street overnight. However, US stocks closed higher on Wednesday as the mostly dovish minutes from the last Federal Reserve meeting helped markets overcome the impact of plunging energy prices. Back home, Indian rupee strengthened by nine paise at 62.15 against the US dollar in early trade after rating agency Moody's upgraded India's outlook from stable to positive.

Back on street, stocks from Banking, Infrastructure and Consumer Durables counters were supporting the markets’ uptrend, while those from Realty, Oil & Gas and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of Astra Microwave Products have rallied after the company incorporated an arm in Singapore to carry on the business in the areas of high-end microwave integrated chip business and related areas. Furthermore, Richa Industries rose on securing repeat order from Wipro to develop multi-storey steel structure building in Baddi in state of Himachal Pradesh.

The market breadth on BSE was positive, out of 2274 stocks traded, 1286 stocks advanced, while 898 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28729.41, up by 21.66 points or 0.08% after trading in a range of 28622.44 and 28875.08. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.45%, while Small cap index up by 0.61%.

The gaining sectoral indices on the BSE were Bankex up by 1.28%, infrastructure up by 0.49%, Consumer Durables up by 0.27%, PSU up by 0.25% and TECK up by 0.17% while, Realty down by 0.16%, Oil & Gas down by 0.13%, Capital Goods down by 0.08% and FMCG down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.58%, ICICI Bank up by 1.57%, Hindustan Unilever up by 1.32%, Axis Bank up by 1.28% and Maruti Suzuki up by 0.80%. On the flip side, Sun Pharma down by 2.45%, Dr. Reddys Lab down by 1.87%, Cipla down by 1.68%, GAIL India down by 1.55% and NTPC down by 0.99% were the top losers.

Meanwhile, Moody’s Investors Service, expressing optimism in the efforts of the new government and the Reserve Bank of India, has raised the rating outlook of the country to positive. Though, the country’s Baa3 rating (the lowest investment grade) was affirmed but the outlook was revised from stable to positive 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. Moody's has also affirmed India's P-3 short-term local currency issuer rating.

The rating agency has said that India has grown faster than similarly rated peers over the last decade due to favourable demographics, economic diversity, as well as high savings and investment rates. Moody’s expects these structural advantages, supported by relatively benign global commodity prices and liquidity conditions, will keep India's growth higher than that of its peers over the rating horizon.

Moody’s believes that recent measures to address inflation, keep external balances in check, simplify the regulatory regime for investors, increase foreign direct investment, and facilitate infrastructure development will reduce some of India's sovereign credit constraints.

According to Moody's, India’s budget prioritizes growth over deficit reduction. The new budget contains several measures that, if effectively implemented, will accelerate India's GDP growth. These include greater public spending allocations to infrastructure, as well as incentives for private sector investment in the sector. Moody’s has further added that the ability of policymakers to strengthen India's sovereign credit profile to a level consistent with a higher rating will become apparent over the next 12-18 months.

The CNX Nifty is currently trading at 8719.60, up by 5.20 points or 0.06% after trading in a range of 8682.45 and 8759.90. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 3.12%, Indusind Bank up by 2.50%, Zee Entertainment up by 2.47%, Yes Bank up by 1.80% and IDFC up by 1.68%. On the flip side, Lupin down by 2.97%, Sun Pharma down by 2.45%, Dr. Reddys Lab down by 1.95%, Cipla down by 1.80% and GAIL India down by 1.74% were the top losers.

Asian markets were trading mostly in the red; Shanghai Composite declined 1.24%, Jakarta Composite decreased 0.06%, FTSE Bursa Malaysia KLCI shed 0.20%, Taiwan Weighted down by 0.03%, Straits Times slipped 0.1% and KOSPI Index was down by 0.20%. On the flip side, Nikkei 225 rose 0.59% and Hang Seng was up by 3.67%.