Benchmarks trade flat in early noon session

Indian equity benchmarks added some strength hovering near the neutral line with the BSE Sensex managing to trade in green while the NSE Nifty trading in red in the early noon session. Investors got some encouragement with the Finance Minister Arun Jaitley’s statement that India has emerged among the few large economies in the world with a promising economic outlook. However, gains remained capped with the Sebi Chairman U K Sinha’s statement that the Chinese slowdown concerns have posed a new challenge for India and raised uncertainty over the country’s growth. Furthermore, the United Nations has downgraded its GDP growth forecast for India for 2016 to 7.5 per cent from 8.2 per cent estimated earlier, largely due to slow progress in implementing reform policies.

On the global front, Asian markets were trading mostly in red, after weaker-than-expected bank lending data and falling oil prices unsettled markets. Back home, the market breadth on BSE was negative, out of 2441 stocks traded, 975 stocks advanced, while 1308stocks declined on the BSE.

In scrip specific development, shares of Prakash Industries was trading higher after the company’s PVC Pipe division is likely to achieve sales of 31,800 mt in the current financial year 2016 against 27,638 mt last year, registering a growth of 15 per cent year-on-year (yoy) and is likely to further grow by 20 per cent in the next financial year with a target sale of 38,000 mt. Majesco was trading higher after the company’s US arm Majesco, USA has entered into a strategic tie-up with Appulate in which Majesco will offer Uplink as an integrated component of Majesco Policy for P&C and Majesco Distribution solutions.

The BSE Sensex is currently trading at 24783.62, up by 10.65 points or 0.04% after trading in a range of 24674.67 and 24912.64. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in mix; the BSE Mid cap index was up by 0.05%, while Small cap index down by 0.09%.

The top gaining sectoral indices on the BSE were IT up by 0.72%, TECK up by 0.50% and Oil & Gas up by 0.29% while, PSU down by 0.66%, Power down by 0.56%, FMCG down by 0.55%, Auto down by 0.44% and Capital Goods down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 2.18%, Infosys up by 1.86%, Maruti Suzuki up by 1.38%, Dr. Reddys Lab up by 0.92% and HDFC up by 0.43%. On the flip side, GAIL India down by 2.99%, NTPC down by 2.44%, ONGC down by 2.03%, Bharti Airtel down by 1.44% and Bajaj Auto down by 1.44% were the top losers.

Meanwhile, United Nations has downgraded its GDP growth forecast for India for 2016 to 7.5 per cent from 8.2 per cent estimated earlier amid slow progress in implementing reform policies proposed by the new administration. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its report has said that the potential for even higher economic growth in some other major economies in the region has been held back due to slow progress in implementing reform policies. UN has said that implementation of such reforms can lead to significant growth acceleration in India.

The UN report further highlighted that instead of any significant acceleration, India is forecast to record growth that is largely unchanged from that recorded in 2014. In the year 2015, India is expected to see better growth compared to China, but the higher rate is due to a change in the methodology of computing GDP in recent years rather than an increase in the growth rate. ESCAP says that China is expected to grow at 6.5 per cent in 2016, lower from 6.8 per cent estimated earlier.

The report notified that despite expectations of expedient implementation by new administrations, India has already undertaken a number of significant economic reforms.These include reform of land acquisition and labour laws and establishment of a nationwide goods and services tax. It further stated that there have been delays in instituting some major reforms which had been expected. It also stated that the government eased restrictions on foreign direct investment and introduced online services to enhance the business environment.

Meanwhile, the government recently lowered its economic growth forecast for 2015-16 to 7-7.5 per cent from 8.1-8.5 per cent. UN said that Indian government had considerable success in improving financial inclusion, which will help to spur domestic consumption.

The CNX Nifty is currently trading at 7525.95, down by 10.85 points or 0.14% after trading in a range of 7502.80 and 7566.50. There were 11 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Reliance Industries up by 2.23%, BPCL up by 2.05%, Tech Mahindra up by 1.34%, Infosys up by 1.31% and Maruti Suzuki up by 1.28%. On the flip side, GAIL India down by 2.99%, NTPC down by 2.65%, Ambuja Cement down by 2.15%, Bajaj Auto down by 1.50% and Tata Motors down by 1.47% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 246.59 points or 1.24% to 19,570.82, Nikkei 225 decreased 143.82 points or 0.83% to 17,097.13, Shanghai Composite decreased 88.32 points or 2.94% to 2,919.33 and KOSPI Index decreased 18.85 points or 0.99% to 1,881.16, while FTSE Bursa Malaysia KLCI increased 5.02 points or 0.31% to 1,638.46, Jakarta Composite increased 16.6 points or 0.37% to 4,529.78 and Taiwan Weighted increased 19.13 points or 0.25% to 7,762.01.