Markets trade flat with negative bias in range-bound session

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading flat with bit of negative bias as gains in energy and metal shares failed to offset losses in index heavyweight Reliance Industries and information technology shares. Sentiments remained down-beat with minister of State for Finance Jayant Sinha’s statement that 2016-17 would be a challenging term with headwinds from low farm sector growth, the global slowdown, and implementation of the Seventh Pay Commission report and the One Rank One Pension. However, investors got some comfort with Niti Aayog Vice Chairman Arvind Panagariya’s statement that the Indian economy will grow over 8 percent this fiscal. He also added that in the first half of the current fiscal, the GDP growth stood at around 7.2 percent and is expected to cross the 8 percent-mark in 2015-16. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 386 crore on December 23, 2015. Meanwhile, Sharpe selling witnessed in banking stocks after the RBI expressed concern about the debt servicing capability of large borrowers, saying that it was affecting the health of the banking sector. In its Financial Stability Report released, the RBI stated that there has been a sharp increase in the large borrowers' share of gross NPAs in the total gross NPAs to 87.4% in September from 78.2% in March. On the other hand, some buying witnessed in metal and mining stocks like Vedanta, Hindalco and NMDC after Chinese communist party speaks of more stimulus. Oil explorers too gained after rebound in global crude oil prices.

On the global front, Asian shares climbed to 2-1/2-week highs in early trade, boosted by energy shares, while data showing strength in consumption raised confidence in the US economy, also supported upside. Further, the rise in oil prices and positive readings from the outcome of an annual planning meeting in China, the Central Economic Work Conference, appeared to be driving gains ahead of the holidays. Back on street, stocks from Metal, Capital Goods and Auto counters were supporting the markets’ uptrend, while those from Banking, Consumer Durables and IT counters were adding to the underlying cautious undertone. In scrip specific development, shares of Idea Cellular have gained after the company announced the launch of fourth generation (4G) services in all four telecom service areas of South India. Furthermore, V-Mart Retail rallied after RBI has notified that FIIs/RFPIs can now invest up to 49 per cent of the paid up capital of V-Mart Retail under the Portfolio Investment Scheme.

The market breadth on BSE was positive, out of 2313 stocks traded, 1339 stocks advanced, while 803 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25849.59, down by 0.71 points after trading in a range of 25832.98 and 25922.47. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.27%, while Small cap index up by 0.42%.

The top gaining sectoral indices on the BSE were Metal up by 0.63%, Capital Goods up by 0.62%, Auto up by 0.45%, Oil & Gas up by 0.38% and Power up by 0.38%, while Bankex down by 0.27%, Consumer Durables down by 0.24%, TECK down by 0.17% and IT down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.35%, Mahindra & Mahindra up by 0.93%, Coal India up by 0.90%, Cipla up by 0.88% and Hindustan Unilever up by 0.77%. On the flip side, Tata Steel down by 0.76%, ICICI Bank down by 0.69%, Bharti Airtel down by 0.53%, Maruti Suzuki down by 0.46% and Reliance Industries down by 0.45% were the top losers.

Meanwhile, Niti Aayog Vice Chairman Arvind Panagariya has said that the Indian economy will grow over 8 percent this fiscal. He said that in the first half of the current fiscal, the GDP growth stood at around 7.2 percent and is expected to cross the 8 percent-mark in 2015-16. The Indian economy grew at an average 8.3 percent rate during the 2003-14 period, and in 2014-15, the growth was 7.3 percent.

Panagariya further said that only four countries Singapore, South Korea, Taiwan and China have a growth rate in the range of 8 to 10 percent. He also cited five critical factors such as growth of merchandise exports, improved manufacturing and services sectors, shifting of workers from agriculture to industries and services, better wages for eliminating abject poverty and rapid urbanisation.

The Niti Aayog Vice Chairman also stressed on the need to have an improved growth rate in sectors such as agriculture and services and said that according to the 2011-12 data, the share of agriculture in employment is 49 percent while that in the GDP is 15 percent. He added that the best agriculture has done over a ten-year period is 4.7 percent during 1980s, and both industries and services have been growing faster (8 to 10 percent) in the last decade. He added that the share of agriculture will only decline in the future, and no fast growing economy has ever been able to reverse the trend.

He termed the Niti Aayog’s role as a facilitator and said the dissolution of the Planning Commission and the formation of Niti Aayog yielded good results, and its policies are in the right direction. Pangariya also emphasized on evolving the National Agriculture Marketing and implementing required upgradation and modernisation tools for the benefit of farmers, besides developing better storage facilities.

The CNX Nifty is currently trading at 7861.90, down by 4.05 points or 0.05% after trading in a range of 7853.80 and 7888.75. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 2.51%, Vedanta up by 1.85%, Tata Motors up by 1.32%, Hindalco up by 1.13% and Mahindra & Mahindra up by 1.07%. On the flip side, Zee Entertainment down by 1.37%, Tata Steel down by 1.02%, ICICI Bank down by 0.80%, PNB down by 0.62% and Adani Ports &Special down by 0.62% were the top losers.

Asian markets were trading mostly in green, Jakarta Composite up by 0.11%, FTSE Bursa Malaysia KLCI up by 1.23%, Taiwan Weighted up by 0.31% and Hang Seng was up by 0.44%. On the flip side, KOSPI Index was down by 0.05%, Nikkei 225 in down by 0.32% and Shanghai Composite was down by 1.45%.