Volatile trade continues; Sensex breaks into green

Indian markets are going through a volatile trade on Tuesday with major indices continuing to move up and down of the red line. There is not much cue in the early afternoon session that could support the markets, though the losses are limited but the Sensex was near the crucial support level of 26500, while the Nifty continue to trade near the lowest closing level of the calendar year. Traders remained cautious ahead of the key macro data slated to be announced later in the week, while the global worries too were weighing on the sentiments. Marketmen have even overlooked the strength in rupee, which bounced back on fresh selling of the American currency by exporters and banks. On the sectoral front, healthcare, auto, IT, tech and capital goods were dragging the markets lower, while some support was coming from metal, banking and consumer durables. Banking remains one of the buzzing sector for the day, trading higher since morning after Reserve Bank of India issued new norms for Strategic Debt Conversion (SDR) which will give lenders the right to convert their outstanding loans into a majority equity stake if the borrower fails to meet conditions stipulated under the restructuring package.

The BSE Sensex is currently trading at 26542.06, up by 18.97 points or 0.07% after trading in a range of 26446.50 and 26585.90. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.35%, while Small cap index lost 0.35%.

The top gaining sectoral indices on the BSE were Metal up by 0.88%, Consumer Durables up by 0.56%, Bankex up by 0.53%, PSU up by 0.09%, FMCG up by 0.07%, while Realty down by 0.83%, Auto down by 0.55%, Capital Goods down by 0.38%, TECK down by 0.32%, IT down by 0.23% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.16%, Hindalco up by 2.03%, Hindustan Unilever up by 1.68%, ICICI Bank up by 1.38% and Axis Bank up by 1.33%. On the flip side, Cipla down by 2.30%, Dr. Reddys Lab down by 1.96%, Sun Pharma Inds down by 1.65%, Bharti Airtel down by 0.95% and ONGC down by 0.77% were the top losers.

Back home, Prime Minister Narendra Modi with looming first drought like situation in six years has said that India must quickly expand its irrigation network and improve water usage to offset the impact of less monsoon rainfall than usual. He said that said that the 'challenge' should be converted into an 'opportunity' for looking at other avenues of irrigation.

PM pushed for a brief, intensive effort to increase the number of farm ponds, adding that falling groundwater levels in some Indian states could force an urgent shift in crop patterns. Prime Minister office had earlier asked officials to ensure quick results for farmers by reviewing administrative mechanisms, financial arrangements and technology use in irrigation.

Modi said that the irrigation plans need to be worked out at the district level, and young officers from the civil services should be asked to propose district-level irrigation plans. He further added that Expansion of irrigation has to be linked with a comprehensive evaluation of cropping patterns across states, as well as a judicious mix of modern and micro irrigation systems such as drip and sprinkler irrigation.

Indian farmers largely depend on the monsoon rains that run from June to September. This year, the rains are forecast to be 88 percent of the long-term average, which could drastically crimp farm output.

The CNX Nifty is currently trading at 8030.50, down by 13.65 points or 0.17% after trading in a range of 8007.55 and 8057.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 3.61%, Hindalco up by 1.95%, Hindustan Unilever up by 1.39%, ICICI Bank up by 1.31% and Axis Bank up by 1.17%. On the flip side, Cairn India down by 4.62%, Cipla down by 2.59%, Tech Mahindra down by 2.36%, PNB down by 2.21% and Dr. Reddys Lab down by 2.14% were the top losers.

The Asian markets were showing weak trend, Nikkei 225 plunged by 361.71 points or 1.77% to 20,095.48, Hang Seng lost 303.28 points or 1.11% to 27,013.00, Taiwan Weighted was down by176.56 points or 1.88% to 9,191.87, Jakarta Composite slumped by 156.68 points or 3.12% to 4,858.31, Shanghai Composite was lower by 63.65 points or 1.24% to 5,068.23, Straits Times was down by 12.05 points or 0.36% to 3,308.28, FTSE Bursa Malaysia KLCI lost 7.22 points or 0.42% to 1,732.23 and KOSPI Index declined  marginally by 1.16 points or 0.06% to 2,064.03.