Benchmarks continue to trade in narrow range with positive bias

Indian equity benchmarks continued to trade near the neutral line with positive bias in the early noon session amid buying witnessed in frontline blue chip stocks such as Power, PSU, Realty, Auto and Oil & Gas stocks. Investors got some encouragement with the Standard & Poor's Rating Services’ statement that the Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly. However, investors remained cautious ahead of the expiry of January derivative contracts tomorrow. Further, investors also await the outcome of the US Fed meet which ends later today. 

On the global front, Asian markets were trading mostly in green, following Wall Street's gain as investors looked ahead to the U.S. Federal Reserve's latest statement on interest rates and the economic outlook. Back home, both the sensex and nifty were trading above the crucial 24,500 and 7,400 levels, respectively. In scrip specific development, share of Vardhman Textiles surged 6.08% after the company reported a strong 66% year on year (YoY) growth in consolidated net profit at Rs 161 crore for the third quarter ended December 31, 2015 (Q3) due to lower raw material cost. The company engaged in textiles business had profit of Rs 97 crore in the same quarter year ago.

The BSE Sensex is currently trading at 24515.28, up by 29.33 points or 0.12% after trading in a range of 24464.33 and 24645.70. There were 16 stocks advancing against 13 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 0.28%, while Small cap index up by 0.49%.

The top gaining sectoral indices on the BSE were Power up by 1.34%, PSU up by 0.65%, Realty up by 0.51%, Auto up by 0.40% and Oil & Gas up by 0.39%, while Consumer Durables down by 0.45%, Capital Goods down by 0.42%, Bankex down by 0.36% and Metal down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.83%, Sun Pharma Inds. up by 1.51%, Tata Motors up by 1.41%, Maruti Suzuki up by 1.12% and GAIL India up by 1.05%. On the flip side, BHEL down by 2.85%, Coal India down by 1.44%, Hindustan Unilever down by 1.40%, Axis Bank down by 1.25% and Asian Paints down by 1.08% were the top losers.

Meanwhile, bucking the global trend of a consistent decline in steel production, India is the only country among major steel producing countries such as China, Japan, South Korea and the US which recorded a positive trend in steel production and consumption in 2015. The World Steel Association (WSA) report notified that India world’s third largest steel producer rose 2.6% in 2015 to 89.6 million tonne (MT), against 87.3 mt in 2014. Though world steel output went down 2.8% to 1.6 billion tone in the same year, reflecting a global economic slowdown. India became the third largest producer of steel in the world in January 2015, leaving behind the US as the fourth largest producer.

Globally, the report highlighted that crude steel output in China the world’s largest steel maker fell by 2.3 per cent to 803.8 mt in 2015 compared to the year-ago period. Japan produced 105.2 mt in 2015, down 5 per cent compared to 2014, while output in South Korea decreased by 2.6 per cent to 69.7 mt during the same period. Further, in 2015, the US produced 78.9 mt of crude steel, a decline of 10.5 per cent compared to 2014, whereas Russia showed a decrease of 4.3 per cent in 2015 with an output producing 101.5 mt of crude steel.

As per WSA data, the last decline in global steel output was witnessed in 2009, when production fell by 8 per cent to 1,238.8 mt from 1,343.4 mt in 2008. Since then it has continuously risen till 2014. Global steel production stood at 1,433.4 mt in 2010, 1,538 mt in 2011, 1,560.1 mt in 2012, 1,650.4 mt in 2013 and 1,670.2 mt in 2014.

The CNX Nifty is currently trading at 7441.75, up by 5.60 points or 0.08% after trading in a range of 7419.70 and 7476.05. There were 26 stocks advancing against 23 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Power Grid up by 3.38%, NTPC up by 2.86%, Idea Cellular up by 2.34%, Zee Entertainment up by 1.67% and Sun Pharma up by 1.58%. On the flip side, BHEL down by 2.58%, Hindustan Unilever down by 1.61%, Coal India down by 1.59%, Bank of Baroda down by 1.51% and Axis Bank down by 1.51% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 5.61 points or 0.34% to 1,632.27, Taiwan Weighted increased 21.16 points or 0.27% to 7,849.83, KOSPI Index increased 23.75 points or 1.27% to 1,895.44, Jakarta Composite increased 31.36 points or 0.7% to 4,541.82, Hang Seng increased 150.32 points or 0.8% to 19,011.12 and Nikkei 225 increased 486.71 points or 2.91% to 17,195.61, while Shanghai Composite decreased 82.71 points or 3.01% to 2,667.07.