Benchmarks trade choppy in noon deals; Nifty holds 7,000 mark

Indian equity benchmarks continued to trade choppy in noon deals lacking any major supportive cues. Depreciation in Indian rupee dampened sentiments. The rupee fell to near record lows against the dollar on Wednesday, forcing the Reserve Bank of India (RBI) to intervene to stem further falls on a tough day for Asian currencies. Market participants also remained wary as global crude oil prices continue to remain volatile after the world’s largest oil producers Russia and Saudi Arabia dampened prospects of a supply cut by deciding to freeze oil output.

On the global front, Asian markets were trading mostly in green, following the positive cues overnight from Wall Street, though gains are muted in most markets amid subdued risk aversion. Closer home, PSU banking stocks remained under pressure after the Standard & Poor's Ratings Services has said that Capital requirements of PSU banks for provisioning of bad loans are likely to shoot up exposing them to possible downgrades. It said that PSU lenders are in a weaker position on the capitalisation front than their private sector peers and may find it difficult to raise capital given their weak performance. The broader indices were reeling under pressure, while the market breadth on the BSE was positive; there were 1,689 shares on the gaining side against 578 shares on the losing side while 117 shares remain unchanged.

The BSE Sensex is currently trading at 23135.07, down by 56.90 points or 0.25% after trading in a range of 22920.84 and 23241.88. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.20%, while Small cap index down by 0.98%.

The few gaining sectoral indices on the BSE were Capital Goods up by 0.92%, Energy up by 0.46%, Oil & Gas up by 0.30% and Industrials up by 0.16%, while Consumer Durables down by 3.00%, Metal down by 1.63%, Bankex down by 1.27%, PSU down by 0.58% and Power down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 2.50%, Larsen & Toubro up by 2.13%, BHEL up by 1.55%, Reliance Industries up by 1.46% and Dr. Reddys Lab up by 1.39%. On the flip side, ICICI Bank down by 2.49%, Bajaj Auto down by 2.16%, Coal India down by 2.14%, GAIL India down by 2.08% and Axis Bank down by 1.81% were the top losers.

Meanwhile, with a view to bring interest on small savings in line with market rates, the government has slashed interest rate on short-term post office saving deposits by 0.25 percent. This advantage has been withdrawn with effect from April 1, 2016 and henceforth the rates would be revised every quarter and would be decided on the 15th of the preceding month. Besides, the compounding of interest, which is biannual in the case of 10-year National Saving Certificate, 5-year National Saving Certificate and KVP, shall be done on an annual basis from April 1. The Finance Ministry said that small saving interest rates are perceived to limit the banking sector’s ability to lower deposit rates in response to the monetary policy of the Reserve Bank of India. This move would help the economy move to a lower overall interest rate regime eventually and thereby help all, particularly low-income and salaried classes.

Besides, Sukanya Samriddhi Yojana, Senior Citizen Savings Scheme and the Monthly Income Scheme (MIS) which command 0.75 per cent, 1 per cent and 0.25 per cent higher interest rate respectively than G-secs will remain untouched as they are linked to social security goals. Similarly, long-term instruments such as 5-year term deposit and similar tenure National Saving Certificates as well as Public Provident Fund (PPF) have been left unchanged. Currently, PPF deposits get 8.7 per cent interest rate while girl child scheme Sukanya Samriddhi Yojana commands 9.2 per cent. MIS gets 8.4 per cent interest rate.

At present Post office savings of 1, 2 and 3 year term deposits, Kisan Vikas Patra (KVP) as well as 5-year Recurring Deposits till now earned 0.25 per cent higher interest than the Government securities of similar tenures.

The government has also permitted pre-mature closure of PPF accounts in genuine cases, like cases of serious ailment, higher education of children. This shall be permitted with a penalty of 1 per cent reduction in interest payable on the whole deposit and only for the accounts having completed five years from the date of opening.

The CNX Nifty is currently trading at 7034.90, down by 13.35 points or 0.19% after trading in a range of 6960.65 and 7059.75. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.94%, Adani Ports & Special up by 2.77%, Larsen & Toubro up by 2.44%, Tata Motors up by 1.53% and Dr. Reddys Lab up by 1.48%. On the flip side, Yes Bank down by 3.42%, Vedanta down by 2.66%, Cairn India down by 2.07%, GAIL India down by 2.05% and Bajaj Auto down by 2.03% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 1.86 points or 0.11% to 1,666.85, Taiwan Weighted rose 2.18 points or 0.03% to 8,214.25, Shanghai Composite gained 11.01 points or 0.39% to 2,847.58 and Jakarta Composite was up by 17.07 points or 0.36% to 4,762.08.

On the flip side, Nikkei 225 declined 218.07 points or 1.36% to 15,836.36, Hang Seng decreased 172.34 points or 0.9% to 18,949.74 and KOSPI Index was down by 4.36 points or 0.23% to 1,883.94.