Markets flatten out, Nifty remains below 7900

Markets are showing choppiness, after recovering from the initial fall and gradually moving back to the highest point of the day, the major indices have once again flattened out. Nifty and Sensex after gyrating in a tight band and showing some signs of stability have once again turned volatile, losing most of the gains. Caution ahead of expiry of contracts in the derivatives segment on Thursday seems to have influenced the sentiments. Selling though has halted at all the major counters and barring banking and capital goods all the sectoral indices were trading in the positive zone. The metal pack has bounced back though the steel stocks were still not moving despite the report that India will auction about 20 major iron ore mines this year in its first such sale ever. Tata Steel was down by over 1%, Vedanta was down by around 2% and SAIL was down around 3%.The broader markets were however outperforming the major indices.

The BSE Sensex is currently trading at 26037.08, up by 4.70 points or 0.02% after trading in a range of 25687.69 and 26156.61. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices trading in green were outperforming the benchmarks; the BSE Mid cap index was up by 0.32%, while Small cap index up by 0.71%.

The top gaining sectoral indices on the BSE were IT up by 1.29%, Power up by 1.15%, INFRA up by 1.12%, Consumer Durables up by 1.04%, Oil & Gas up by 1.03%, while Bankex down by 0.97%, Capital Goods down by 0.28% and FMCG down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.52%, TCS up by 2.44%, Wipro up by 2.29%, NTPC up by 2.05% and Reliance Industries up by 1.97%. On the flip side, Hero MotoCorp down by 2.84%, Bharti Airtel down by 2.21%, BHEL down by 1.96%, SBI down by 1.54% and ICICI Bank down by 1.45% were the top losers.

Meanwhile, global rating agency Moody’s has said that it will upgrade India's rating if the government is able to push through reforms, inflation stabilises, regulatory environment improves and infrastructure investment rises. In its latest report the rating agency has said that “India's rating could be upgraded if it's expectations of gradual but credit positive reforms are realised in actual policy implementation and if the recent improvement in inflation, fiscal and current account ratios is sustained.”

Moody’s which is having a 'Baa3' rating on India with a positive outlook, said that it had changed its outlook on India in April to positive from stable, based on premise that the proposed policies are likely to lower sovereign credit risk by stabilising inflation, improving the regulatory environment, increasing infrastructure investment while maintaining the ongoing improvement in fiscal ratios.

Though, it also cautioned that rating outlook would likely return to stable if there was 'a slowdown or reversal of the policy reform process, if banking system metrics continue to weaken, or if there is a decline in foreign exchange reserves coverage of external debt and imports. It also said that India's performance on political stability, regulatory quality, control of corruption and government effectiveness is weaker than the median for sovereigns rated in the Baa range.

The agency highlighted that over the last year, performance on inflation and the balance of payments have improved, reflecting policy efforts. It also said the Modi government has made some progress on reforms to improve the operating environment and ease investment procedures, but the progress has stalled in two key areas -- passing a unified Goods and Services Tax (GST) and the Land Acquisition Act.

The CNX Nifty is currently trading at 7893.50, up by 12.80 points or 0.16% after trading in a range of 7785.60 and 7930.05. There were 22 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 4.10%, Bajaj Auto up by 2.72%, Zee Entertainment up by 2.67%, Cairn India up by 2.58% and Reliance Industries up by 2.53%. On the flip side, Ambuja Cement down by 3.28%, Bank Of Baroda down by 2.82%, Bharti Airtel down by 2.38%, Hero MotoCorp down by 2.29% and Indusind Bank down by 2.05% were the top losers.

The Asian markets were mostly in green, Hang Seng was up by 6.94 points or 0.03% to 21,411.90, Shanghai Composite increased by 9.03 points or 0.3% to 2,974.00, FTSE Bursa Malaysia KLCI added 12.27 points or 0.78% to 1,576.21, Straits Times was up by 12.7 points or 0.44% to 2,898.99, Taiwan Weighted was higher by 39.95 points or 0.52% to 7,715.59, KOSPI Index inched up by 47.46 points or 2.57% to 1,894.09 and Nikkei 225 surged by 570.13 points or 3.2% to 18,376.83.

On the other hand Jakarta Composite lost 28.8 points or 0.68% to 4,199.70.