Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as concerns related to the disappointing quarterly results, controversial MAT levy and delay in the ambitious indirect tax (GST) and land reforms amid a subdued monsoon forecast continue to prevail. Besides, weakness among the global peers as investors remain wary of rising bond yields coupled with weaker-than-expected US retail data has dampened the sentiments. Down in red with loss of over 0.30%, both Sensex and Nifty were trading below the psychological 27,150 and 8,250 levels respectively. However, the session turned productive for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.39-0.52%. Some support came with Finance Minister Arun Jaitley’s statement that government is committed to passage of GST Bill in July. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of wholesale price inflation (WPI) data for the month of April due later in the day today.

On global front, most of the Asian equity markets were trading up in the early deals, despite as the selloff in global bonds accelerated, with Japanese yields rising to their highest level since March. Further, Overnight, US stocks surrendered early gains to end the session on a flat note as some investors stood on the sidelines waiting for the next round of economic data at the end of earnings season. Back home, Indian rupee gained nine paise to 63.91 against the dollar in early trade after the American currency weakened overseas due to disappointing retail sales report.

Back on street, stocks from Infrastructure, Power and PSU counters were supporting the markets’ uptrend, while those from information technology (IT), Banking and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Shares of Lupin have dipped after the company reported a lower-than-expected net profit for the quarter ended March 2015. On the flip side, shares of Ashoka Buildcon have surged after reporting an over two-fold increase in consolidated net profit at Rs 37.80 crore for the quarter ended March 31, 2015.

The market breadth on BSE was positive, out of 2021 stocks traded, 1075 stocks advanced, while 857 stocks declined on the BSE.

The BSE Sensex is currently trading at 27135.91, down by 115.19 points or 0.42% after trading in a range of 26948.62 and 27293.99. 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 0.39%, while Small cap index up by 0.52%.

The gaining sectoral indices on the BSE were Infrastructure up by 0.59%, Power up by 0.42%, PSU up by 0.39%, Oil & Gas up by 0.34% and Auto up by 0.23% while, IT down by 0.95%, TECK down by 0.64%, Bankex down by 0.46%, Capital Goods down by 0.24% and Consumer Durables down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.18%, Cipla up by 2.13%, NTPC up by 1.96%, Hindalco up by 1.50% and Mahindra & Mahindra up by 1.46%. On the flip side, Infosys down by 1.28%, Wipro down by 1.22%, Vedanta down by 1.15%, Tata Motors down by 1.14% and Sun Pharma Inds. down by 0.98% were the top losers.

Meanwhile, In order to make India self-sufficient in production of fertilisers in the next four years and ensure timely supply of the soil nutrient to farmers, the government has approved a new urea policy. Finance Minister Arun Jaitley, while presenting his government's first Budget in July 2014, had announced that the government would formulate a new urea policy.

The new urea policy aims to increase domestic production by 2 million tonnes and reduce government’s subsidy bill by over Rs 4,800 crore annually. Urea is presently under government control and is sold at a highly subsidised rate of Rs 5,360 per tonne. The difference between the maximum retail price (MRP) and the cost of production is reimbursed to manufacturers as subsidy by the central government.

Fertiliser Ministry has said that Union Cabinet approval of a comprehensive New Urea Policy 2015 is for the next four fiscals with multiple objectives of maximising indigenous urea production and promoting energy efficiency in urea units to reduce the government's subsidy burden. The policy will result in direct saving of subsidy of around Rs 2,618 crore and indirect saving of Rs 2,211 crore on account of revised specific energy consumption norms and import substitution, respectively, during the next four years. Total savings would be Rs 4,829 crore. The policy will ensure timely supply of urea to farmers at the same retail price with lesser financial burden on the exchequer, besides reducing import dependence.

Meanwhile the government has decided not to raise retail prices. The maximum retail price (MRP) of urea for farmers has been left untouched at Rs 268 per bag of 50 kgs, excluding local taxes. Farmers would have to pay an additional Rs 14 per bag for neem-coated urea.

India's urea production has remained stagnant at 22 million tonnes (MT) annually and the country has to import about 8 MT to meet the domestic demand. The new policy is also expected to result in an additional production of around 20 lakh tonnes of urea annually.

The CNX Nifty is currently trading at 8204.90, down by 30.55 points or 0.37% after trading in a range of 8137.30 and 8232.80. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.28%, Bajaj Auto up by 2.20%, Cipla up by 2.18%, Asian Paints up by 2.04% and Hindalco up by 1.61%. On the flip side, Lupin down by 3.74%, Infosys down by 1.45%, Vedanta down by 1.38%, Tata Motors down by 1.32% and Wipro down by 1.27% were the top losers.

Asian equity benchmarks were trading mostly in the green; KOSPI Index increased 0.12%, FTSE Bursa Malaysia KLCI rose 0.18%, Shanghai Composite gained 0.26%, Jakarta Composite surged 0.78% and Hang Seng was up by 0.3%. On the flip side, Nikkei 225 decreased 0.99%, Taiwan Weighted declined 1.18% and Straits Times was down by 0.12%.