Markets trade flat with negative bias

After getting weak start, Benchmarks showed some strength in early deals, but the sentiments turned pessimistic in late morning trade. At present, the frontline indices were trading flat with bit of negative bias as investors turned jittery ahead of the release of the second quarter gross domestic product (GDP) data later today. Besides, caution prevailed ahead of RBI's fifth bi-monthly monetary policy review tomorrow and continuing fund outflows by foreign investors amid weakness at other Asian markets. However, sentiments got some support on hope of the passage of the crucial Goods and Services Tax (GST) bill in the current session of the Parliament. All eyes are now on the proceedings of the winter session of the Parliament after the Prime Minister Narendra Modi invited Congress president Sonia Gandhi and former Prime Minister Manmohan Singh and extended an olive branch to end the deadlock over GST bill and other crucial legislations. Some support also came on the report that India's overall financial conditions have shown a healthy improvement, thanks to low cost of funds, strong liquidity, better external financial linkages and uptick in economic activity.

On the global front, Asian shares fell in early trade as Chinese stocks extended last week's sharp losses, while the yuan bounced in volatile trade hours ahead of an IMF decision on whether to promote it to a basket of global reserve currencies. Fed Chairwoman Janet Yellen is due to deliver a speech Wednesday and congressional testimony Thursday in which financial analysts expect her to affirm the view that the U.S. economy is improving enough that the Fed can raise interest rates. With the US Federal Reserve expected to increase the interest rate in just about two weeks from now and central banks in Euro and Japan contemplating of infusing fresh stimulus in their economies will keep the traders on their toes. Back home, stocks from Consumer Durables, Auto and Capital Goods counters were supporting the markets’ uptrend, while those from FMCG, TECK and IT counters were adding to the underlying cautious undertone.

In scrip specific development, shares of BF Utilities have surged after the company reported nearly doubled standalone net profit at Rs 8.11 crore for the fourth quarter ended September 2015, due to one-time gain of Rs 4.04 crore on sale of investments. Furthermore, Rajesh Exports has rallied after the company has bagged an export order worth Rs 1122 crore of designer range of gold and diamond studded jewellery and medallions from UAE. The order is to be completed by March 31, 2016.

The market breadth on BSE was positive, out of 2363 stocks traded, 1456 stocks advanced, while 746 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26123.82, down by 4.38 points or 0.02% after trading in a range of 26096.09 and 26231.06. 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 0.23%, while Small cap index up by 0.74%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.32%, Auto up by 1.17%, Capital Goods up by 0.69%, Power up by 0.63% and Realty up by 0.45%, while FMCG down by 0.44%, TECK down by 0.27%, IT down by 0.10%, Oil & Gas down by 0.07% and Metal down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.12%, Maruti Suzuki up by 1.74%, ICICI Bank up by 1.63%, Tata Motors up by 1.50% and Larsen & Toubro up by 0.97%. On the flip side, Sun Pharma Inds. down by 1.34%, Bharti Airtel down by 1.26%, GAIL India down by 0.99%, HDFC down by 0.98% and Coal India down by 0.91% were the top losers.

Meanwhile, NITI Aayog Vice Chairman Arvind Panagariya, amid the perception that Indian economy can gain from the deceleration of the Chinese economy, has said that the impact of China's economic slowdown on India will be largely dependent on how the country proceeds on policy reforms. India has sought China's assistance to increase the speed of the existing network as well as modernise some the of railway stations.

Panagariya said that China's slowdown is not a big surprise but quite contrary if it continued at 10 percent for the fifth decade that would be a surprise. He said that, “Chinese economy is $10 trillion, which is second largest. Even if it goes slower rate 6 to 7 per cent in ten years or less it will cross US economy which is around $16 trillion.”

NITI's Vice Chiarman pitched for large scale Chinese investments into India's massive infrastructure expansion plans and said that China should make its loans attractive compared to Japan's “incredibly attractive” finance. He further elaborated that Japanese are offering 40-year loan where there is no payments for 10 years and after that only 0.3 per cent a year. So it is a highly concessional loan. The Chinese are not offering anything close to that. So there is a big difference between the Chinese Japanese offers.

He also said that High-speed rail is an expensive proposition. What kind of finance the Chinese are willing to bring to the table is important. While, Japan is currently conducting feasibility study for Mumbai-Ahmedabad bullet train, China has undertaken a similar exercise for the Chennai-New Delhi corridor.

The CNX Nifty is currently trading at 7936.40, down by 6.30 points or 0.08% after trading in a range of 7927.40 and 7963.85. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 2.19%, Bajaj Auto up by 2.17%, Maruti Suzuki up by 1.73%, ICICI Bank up by 1.50% and Tata Motors up by 1.46%. On the flip side, Idea Cellular down by 1.94%, Cairn India down by 1.61%, Ultratech Cement down by 1.59%, Bharti Airtel down by 1.56% and Ambuja Cement down by 1.48% were the top losers.

Asian markets were trading in red, Nikkei 225 was down by 0.6%, Taiwan Weighted down by 1.31%, Hang Seng down by 0.04%, Shanghai Composite down by 1.8%, Jakarta Composite down by 0.89%, KOSPI Index down by 1.75 and FTSE Bursa Malaysia KLCI down by 0.97%.