Benchmarks continue to trade in red in late morning session

Indian bourses continued their weak trade in the late morning session on reduced bets by cautious retail investors amid continued capital outflows by foreign funds. Market participants remained cautious as all eyes remained on the biggest economic event of the year - Union Budget 2016-17. Corporate tax reduction, increasing service tax rate, some steps towards GST implementation, capital support for PSU banks and divestment of government stakes in PSUs along with some reforms are among the broad expectations.  Besides, weak trend in Asian stocks coupled with depreciation in rupee value have also weighed on the sentiment. However, losses remained capped with statement of Chief Economic Adviser Arvind Subramanian that India is expected to accelerate to 8-10 per cent growth rate in two to five years on account of structure reforms and encouraging competitive federalism.

On the global front, Asian markets trading mostly in red as investors turned cautious after a week-end meeting of the Group of 20 economic policymakers ended with no new coordinated action to spur global growth. Investor sentiment is also cautious ahead of the release of a slew of economic data globally this week.

Back home, stocks from Banking, Metal and PSU counters were supporting the markets’ uptrend, while those from Consumer Durables, IT and FMCG counters were adding to the underlying cautious undertone.  In scrip specific development, shares of Jaiprakash Associates have surged after the company signed a binding Memorandum of Understanding (MOU) with UltraTech Cement for divestment of part of its cement businesses. Furthermore, Aurobindo Pharma has rallied on the reports that the company has received tentative approval from the United States Food and Drug Administration (USFDA) for its Ritonavir tablets which is used for treatment of human immunodeficiency virus (HIV) infection.

The market breadth on BSE was negative, out of 2013 stocks traded, 888 stocks advanced, while 999 stocks declined on the BSE. 

The BSE Sensex is currently trading at 23127.84, down by 26.46 points or 0.11% after trading in a range of 23066.41 and 23248.27. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.27%, while Small cap index down by 0.10%.

The top gaining sectoral indices on the BSE were Bankex up by 0.92%, Metal up by 0.84%, PSU up by 0.77%, Capital Goods up by 0.33% and Realty up by 0.13%, while Consumer Durables down by 1.31%, IT down by 0.88%, TECK down by 0.84%, FMCG down by 0.83% and Auto down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 4.61%, Tata Steel up by 2.40%, ICICI Bank up by 2.03%, ONGC up by 1.72% and Dr. Reddys Lab up by 1.52%. On the flip side, GAIL India down by 2.70%, Hero MotoCorp down by 2.04%, Wipro down by 1.77%, Cipla down by 1.65% and Hindustan Unilever down by 1.55% were the top losers.

Meanwhile, India’s exports which are in the negative zone since December 2014 will continue its slowdown for a while and are likely to start picking up from the fiscal year 2016-17, according to the Economic Survey tabled in Parliament on February 26. The survey said that the continuance of low commodity prices globally promises well for sustaining low trade and current account deficit. It further said that the trade policy has focused on promoting exports and thereby moderate the levels of trade deficit. The moderation in the levels of trade deficit had a useful effect on sustaining the moderation in the overall balance-of-payments outcome in the current fiscal.

The survey said that since the latter half of 2014, there has been a southward movement in the growth of exports from India and major countries of the world, as export growth of different countries moves in tandem with the world economic situation. India’s merchandise exports dipped for the 14th month in a row, down 13.6 percent in January to $21 billion due to fall in shipments of petroleum and engineering goods, although trade deficit showed improvement.

The survey further highlighted that the global economic outlook has remained under the cloud of uncertainty for long, with periodic financial market turmoil and heightened risk aversion. However, India's external sector outcome continues to be strong and sustainable because of strong macroeconomic fundamentals and low commodity prices. Terming the current account deficit, the survey said that it is likely to be in the low range of 1-1.5 percent.

The CNX Nifty is currently trading at 7017.90, down by 11.85 points or 0.17% after trading in a range of 6999.30 and 7053.30. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were SBI up by 4.62%, Bank of Baroda up by 3.65%, PNB up by 3.31%, Tata Steel up by 2.48% and ICICI Bank up by 2.22%. On the flip side, GAIL India down by 2.89%, BPCL down by 2.37%, Hero MotoCorp down by 1.96%, Zee Entertainment down by 1.68% and Cipla down by 1.63% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 1.22%, Nikkei 225 down by 0.16%, Shanghai Composite down by 3.58% and FTSE Bursa Malaysia KLCI down by 0.4%. On the flip side, KOSPI Index was up by 0.16%, Jakarta Composite up by 0.49%, Taiwan Weighted was up by 0.54%.