Markets trim losses to trade flat in noon deals

Indian equity benchmarks have pared almost all of their early losses and are trading flat as investors opted to buy beaten down but fundamentally strong stocks. Traders got some support with chief economic adviser Arvind Subramanian’s statement that India does not need further fiscal stimulus to revive the economy, despite record low inflation and growth seen at the lower end of an 8.1-8.5 percent target this financial year. However, depreciation in Indian rupee continued to weigh down sentiments. The rupee was at 66.16 per dollar at this point of time as compared to 65.99 per dollar level on Wednesday.

On the global front, European counters have made a sluggish start and are trading mostly in red in early deals. Asian markets are trading mostly in red at this point of time dragged down by economic reports portraying US factory growth as tepid and China in its worst manufacturing contraction since the global financial crisis. Back home, on the sectoral front, software, consumer durables and healthcare witnessed the maximum gain in trade, while metal, capital goods and banking remained the top losers on the BSE sectoral space. The broader indices, however, outperforming benchmarks, while the market breadth on the BSE was positive; there were 1465 shares on the gaining side against 888 shares on the losing side while 86 shares remain unchanged.

The BSE Sensex is currently trading at 25783.30, down by 39.69 points or 0.15% after trading in a range of 25670.96 and 25811.85. There were 11 stocks advancing against 18 stocks declining on the index while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.53%, while Small cap index up by 0.81%.

The top gaining sectoral indices on the BSE were IT up by 1.17%, Consumer Durables up by 1.15%, Healthcare up by 1.09%, TECK up by 1.00% and Auto up by 0.75%, while Metal down by 1.21%, Capital Goods down by 0.86%, Bankex down by 0.59%, Oil & Gas down by 0.43% and PSU down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 3.16%, Bajaj Auto up by 1.61%, Maruti Suzuki up by 1.61%, Infosys up by 1.29% and Cipla up by 1.14%. On the flip side, Coal India down by 2.70%, ONGC down by 2.31%, Larsen & Toubro down by 1.68%, Tata Steel down by 1.67% and Vedanta down by 1.53% were the top losers.

Meanwhile, Government's chief economic adviser (CEA) Arvind Subramanian, despite GDP growth seen at the lower end of an 8.1 percent to 8.5 percent target in the current financial year, has reiterated that India does not need further fiscal stimulus to revive the economy. Subramanian said that 'I don't think extra stimulus at this stage is necessary,' the government 'will and must' meet a fiscal deficit target of 3.9 percent of GDP in the current fiscal year.

Subramanian who was instrumental in Finance Minister Arun Jaitley’s decision to soften the fiscal deficit target from an initial 3.6 per cent, to free up resources for a growth-boosting splurge on roads and railways, said this public spending along with consumption will be the “big engines” of the economy in the short-term as debt-ridden private companies could take time to raise investments.

He further noted that despite the shortfall in rains and export slump, the economy was still expected to grow at just over 8 percent in the current financial year, higher that private economists’ forecast, though he added that “The external environment has been much worse than what we thought. May be, we will be at the lower end of our forecast”.

The CNX Nifty is currently trading at 7850.45, up by 4.50 points or 0.06% after trading in a range of 7804.10 and 7855.30. There were 19 stocks advancing against 30 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Tata Power up by 3.48% and Lupin up by 3.12% and Zee Entertainment up by 2.44% and HCL Tech. up by 1.93% and Bajaj Auto up by 1.73%. On the flip side, Coal India down by 2.85%, ONGC down by 2.45%, Vedanta down by 1.84%, Tata Steel down by 1.74% and Larsen & Toubro down by 1.65% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 declined 498.38 points or 2.76% to 17,571.83, Hang Seng decreased 185.28 points or 0.87% to 21,117.63 and Taiwan Weighted was down by 70.32 points or 0.86% to 8,123.10 . 

On the flip side, KOSPI Index increased 2.46 points or 0.13% to 1,947.10 and Shanghai Composite was up by 10.72 points or 0.34% to 3,126.60.

European Markets were trading in red; UK’s FTSE lose 0.14% and France’s CAC was down by 0.04%, while Germany’s DAX was up by 0.16%.