Benchmarks continue to trade in narrow range with positive bias

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading flat with bit of positive bias on selective buying by funds and retail investors ahead of RBI’s monetary policy to be announced later in the day.  Sentiments got some support with Core sector output returning to positive territory in December 2015 by registering a 0.9 per cent growth after shrinking (-) 1.3 per cent in November last year. Some support also came with the report that rising disposable income, a normal monsoon, boost from the sixth pay commission and public infrastructure by the government will support India's growth next fiscal even as the rest of the world faces concerns. However, investors remained worried that the union budget might increase effective corporate tax rate by doing away with a host of tax exemptions.

On the global front, Asian markets trading mostly in red as crude oil prices slid on rekindled oversupply fears and after downbeat manufacturing data from the world's two largest economies raised concerns about global momentum. Furthermore, US equities closed flat taking cues from a downbeat China manufacturing data and falling oil prices. Back home, stocks from IT, Power and Realty counters were supporting the markets’ uptrend, while those from Metal, Oil & Gas and PSU counters were adding to the underlying cautious undertone. In scrip specific development, Shares of State Bank of Travancore have surged after the bank reported a 23% increase in its net profit at Rs 91.5 crore in the third quarter despite higher provisioning and higher income from operations. Furthermore, TVS Motor Company has gained after the company has recorded 12.1% growth in sales during the month of January 2016, with total sales increasing from 185,997 units recorded in the month of January 2015 to 208,485 units in the month of January 2016.

The market breadth on BSE was positive, out of 2149 stocks traded, 1106 stocks advanced, while 946 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24876.57, up by 51.74 points or 0.21% after trading in a range of 24829.41 and 24892.53. 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 0.07%, while Small cap index up by 0.23%.

The top gaining sectoral indices on the BSE were IT up by 0.66%, TECK up by 0.65%, Power up by 0.46%, Realty up by 0.44% and Auto up by 0.27%, while Metal down by 1.53%, Oil & Gas down by 1.29%, PSU down by 0.40% and Capital Goods down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.60%, Dr. Reddys Lab up by 1.38%, Infosys up by 1.20%, Lupin up by 1.13% and Bajaj Auto up by 1.05%. On the flip side, Tata Steel down by 2.99%, ONGC down by 2.16%, GAIL India down by 1.24%, Coal India down by 1.02% and Reliance Industries down by 0.87% were the top losers.

Meanwhile, amid China’s decision to cut steel capacity, Union Minister Narendra Singh Tomar has said that additional steps will be taken to protect domestic steel industry, which is going through a bad phase, in wake of cheap Chinese imported steel. According to Tomar, his ministry along with the Finance and Commerce ministries is working to bring out the steps that need to be taken for protecting domestic steel industry in the near future.

Tomar said that China is offering steel at half price compared to domestic industry in India. The way China is working, it appears that an economic war was on. Tomar further said that there was mounting concern among the domestic steel industry as China was trying to dump its cheap steel in India. In order to protest domestic industry, the government has enhanced import duty and imposed safeguard duty which is not sufficient to overcome the problem and hence the government is going to take additional steps in this regard.

He  also said that state run steel production centres are been expanded and modernised and four new steel plants were being set up in Jharkhand, Odisha, Chhattisgarh and Karnataka and added that the Centre is also going to set up 6 to 7 plastic parks across the country.

China’s decision to cut steel capacity is not a relief to India as they already have a massive production capacity of around 1.25 billion tonne, and produce 800 million tone. Until and unless the Centre takes some drastic measures of anti-dumping or safeguard duties or minimum import price, everything is likely to remain very gloomy.

The CNX Nifty is currently trading at 7561.05, up by 5.10 points or 0.07% after trading in a range of 7549.75 and 7568.55. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 1.98%, Bharti Airtel up by 1.60%, PNB up by 1.44%, Dr. Reddys Lab up by 1.40% and Bank of Baroda up by 1.39%. On the flip side, Tech Mahindra down by 3.41%, Cairn India down by 3.29%, Tata Steel down by 2.93%, Vedanta down by 2.91% and ONGC down by 2.24% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 0.79%, Taiwan Weighted down by 0.31%, Jakarta Composite down by 0.74%, KOSPI Index down by 0.68%, FTSE Bursa Malaysia KLCI down by 0.66% and Nikkei 225 down by 0.86%. On the flip side, Shanghai Composite was up by 2.36%.