Markets trade flat with positive bias; Sensex above 23100 mark

In an extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were trading flat with bit of positive bias on buying by investors ahead of the Rail Budget to be announced later in the day, amid mixed global cues. Besides, covering-up of short positions in view of February derivatives expiry gave the upside some momentum. Sentiments also got some support with Finance Minister Arun Jaitley’s statement, ahead of the Union Budget 2016-17, that India needs competitive tax rates to become an attractive manufacturing hub that will help create jobs and boost economic growth. Appreciation in Indian rupee too aided sentiments. Indian rupee rose by 7 paise to 68.50 against the dollar in early trade on fresh selling of the US currency by banks and exporters. Some support also came with the report that merchant exporters, who procure goods from manufacturers for exports, are likely to be granted a three per cent interest subsidy on pre and post-shipment rupee export credit in certain sectors such as handicrafts, farm products, processed food and carpets.

On the global front, Asian market trading mostly in green, taking the positive cues overnight from Wall Street and the rebound in crude oil prices that lifted investor sentiment. Japanese stocks rose as the yen moved away from its recent highs. Meanwhile, investors largely focused on Friday’s G-20 meeting in Shanghai as one potential catalyst for troubled, directionless markets. Overnight, US markets closed in the green as the oil prices stabilised helping the index to recover from an intraday decline of about 2%.

Back home, stocks from Metal, FMCG and PSU counters were supporting the markets’ uptrend, while those from Power, IT and Oil & Gas counters were adding to the underlying cautious undertone. Sugar stocks edge higher on the report that there is likely to be global sugar shortfall of 5 million tonnes in FY16, much higher than November estimates of 3.5 million tonnes. In scrip specific development, Shilp Gravures surged after the company received the permission from Gujarat Pollution Control Board (GPCB) to commence the operations of the plant. Furthermore, RS Software has gained after the company bagged additional projects from National Payments Corporation (NPCI) of Rs 36 crore, which is to be executed and supported over a period ranging from 3 to 5 years.

The market breadth on BSE was positive, out of 1975 stocks traded, 975 stocks advanced, while 890 stocks declined on the BSE. 

The BSE Sensex is currently trading at 23113.53, up by 24.60 points or 0.11% after trading in a range of 23029.89 and 23138.96. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mix; the BSE Mid cap index was down by 0.20%, while Small cap index was up by 0.06%.

The top gaining sectoral indices on the BSE were Metal up by 1.33%, FMCG up by 0.50%, PSU up by 0.19% and Realty up by 0.02%, while Power down by 1.05%, IT down by 0.94%, TECK down by 0.88%, Oil & Gas down by 0.46% and Consumer Durables down by 0.12% were the top losing indices on BSE.

The top gainers on the Sensex were Coal India up by 2.35%, Sun Pharma Inds. up by 2.14%, Lupin up by 1.30%, HDFC up by 1.03% and Mahindra & Mahindra up by 0.95%. On the flip side, Wipro down by 1.98%, GAIL India down by 1.73%, TCS down by 1.34%, Adani Ports &Special down by 1.32% and Bharti Airtel down by 1.02% were the top losers.

Meanwhile, the SBI Composite Index, an indicator for tracking India's manufacturing activity in the country bounced back and entered the expansion territory in February. The yearly SBI composite index for February 2016 inched up to 51.3 (moderate growth) from 47.3 (low decline) in January 2016. However, it has registered a month-on-month decline to 49.5 (low decline) in February 2016 from 52.4 (moderate growth) in January 2016.

The report noted that the credit growth touched a 10-month high as on February 5. However, refinancing constituted much of the credit growth; hence it may be difficult to say whether credit growth has picked up materially or in a sustained manner. Further it highlighted that bank credit to domestic export sector suffered due to fall in external demand as visible in major export sectors like textile, gems and jewellery. This has led to contraction in demand of credit. Furthermore instances of dumping have made revival of certain sectors difficult, thus depressing the demand of credit. In case of pure intermediate goods sector like mining, the fall in commodity prices dented margins in mining. At the current low levels of prices, it is difficult to market a low grade ore with higher extraction cost.

As per the SBI’s composite index, a value of less than 42 means large decline while a value of 42 to 46 means moderate decline, 46 to 50 (low decline), 50 to 52 (low growth), 52 to 55 (moderate growth) and above 55 (high growth). Manufacturing activity in the country bounced back and entered the expansion territory in February. The SBI Composite Index mirrors the credit demand in the country, and other data sets available in public domain.

The CNX Nifty is currently trading at 7023.25, up by 4.55 points or 0.06% after trading in a range of 6997.80 and 7034.20. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.62%, Hindalco up by 2.41%, Sun Pharma up by 2.20%, Vedanta up by 1.41% and Tata Power up by 1.38%. On the flip side, Power Grid down by 4.47%, Tech Mahindra down by 2.14%, BPCL down by 1.91%, Wipro down by 1.79% and Adani Ports &Special down by 1.35% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI was up by 0.06%, Jakarta Composite up by 0.04%, Taiwan Weighted up by 0.97%, KOSPI Index up by 0.03% and Nikkei 225 up by 1.7%. On the other hand, Hang Seng declined by 1.23% and Shanghai Composite was lower by 3.61%.