Markets trade lower in early deals led by metal stocks

After managing a flat closing in previous session, Indian equity markets have made gap-down opening and are now trading with cut of over half a percent in morning deals, dragged down by metal shares, as decline in commodity prices soured market sentiment and prompted investors to take profits off the table. The sentiments were further weighed down by decline in Indian rupee which depreciated by 15 paise to 67.50 against the dollar in early trade at the inter-bank foreign exchange market, due to appreciation of the US currency overseas. Besides, there was cautiousness in the markets, after Chief economic adviser Arvind Subramanian said that we should not peg all the hopes on a rate cut by the Reserve Bank of India to cure the economy from all that plagues it.  However, down side remained capped on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 775.07 crore yesterday, as per provisional data released by the stock exchanges. On the sectoral front, most of the sectoral indices on BSE were reeling under pressure, stocks from Metal, IT, Consumer Durables, TECK and FMCG counters were the prominent losers. On the flip side, stocks from Realty, Capital Goods and Auto counters were the gainers 

In the scrip specific development, Ashoka Buildcon was trading higher by around 4% on the BSE after the company along with Bhartia Infra Projects received letter of acceptance (LOA) from National Highways & Infrastructure Development Corporation (NHIDCL) for road project. 

On the global front, the US markets ended higher on Thursday, as the energy sector tumbled alongside the price of oil and after soft Chinese trade data rekindled fears that the global economy is weaker than anticipated. Asian markets were trading mostly in red on Wednesday, extending losses from the previous session, as investors shied away from risk amid a slump in commodities and oil prices.

The BSE Sensex is currently trading at 24513.20, down by 146.03 points or 0.59% after trading in a range of 24451.60 and 24535.38. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.08%, while Small cap index down by 0.48%.

The gaining sectoral indices on the BSE were Realty up by 2.21%, Capital Goods up by 0.18% and Auto up by 0.04%, while Metal down by 1.95%, IT down by 1.15%, Consumer Durables down by 1.09%, TECK down by 0.95% and FMCG down by 0.66% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.63%, Hindustan Unilever up by 1.09%, ONGC up by 0.79%, Lupin up by 0.79% and Asian Paints up by 0.64%. On the flip side, Tata Steel down by 3.08%, Adani Ports &Special down by 2.39%, ICICI Bank down by 2.28%, TCS down by 2.23% and Tata Motors down by 2.14% were the top losers.

Meanwhile, after Fitch, another global rating agency, Moody's Investors Service’s has said that global headwinds are no sign of a recession. The agency said that the prolonged decline in oil prices and weaker expansion in Chinese economy have dimmed growth prospects of several economies, but it does not signal a threat of global recession. It said that the positive impact of lower commodity prices on global growth helps mitigate the negative effect from the financial market turbulence.Moody’s also said that the continuous decline in crude oil prices and sluggish growth in China have prompted a reappraisal of global economic growth prospects, causing risk aversion to rise and financial market conditions to tighten. It added that oil prices continue the decline that began in June 2014, reaching lows not seen in more than a decade. It currently expect oil and gas prices to remain close to current lows for several years, as excess supply in the market is slowly absorbed. It has estimated oil prices to be around $33 per barrel in 2016, which will rise to $ 38 a barrel in the next and to $ 43 in 2018.

It further said that the main cause of the low oil prices is an 'inverse supply shock' as due to technological changes, excess investment in capacity, and geopolitical factors like OPEC's lack of agreement on curtailing supply, supply has outpaced demand even as demand has continued to grow. For advanced countries, Moody's maintained its growth forecast broadly stable and said that it expects 1.8% real GDP growth for the G-20 advanced economies in 2016 - 0.3 per cent below its November 2015 expectation - and 2.0 per cent in 2017.

Moody’s said that it believes the current macro-credit environment is similar to conditions in 1987 or 1998 when credit problems within certain sectors of the global economy were very severe, but the rest experienced only a modest slowdown in economic activity. It said that downside risks to global growth have increased as second-round effects from the fall in commodity prices, the slowdown in China, the slowdown in emerging markets and the financial markets turbulence are still working their way through the real economy.

The CNX Nifty is currently trading at 7438.00, down by 47.30 points or 0.63% after trading in a range of 7424.30 and 7447.65. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 1.24%, Hindustan Unilever up by 1.17%, Ultratech Cement up by 0.88%, Zee Entertainment up by 0.84% and ONGC up by 0.82%. On the flip side, Vedanta down by 5.53%, Hindalco down by 3.61%, Tata Steel down by 3.02%, Cairn India down by 2.85% and Adani Ports &Special down by 2.74% were the top losers.

Asian markets were trading in red, Nikkei 225 decreased 267.22 points or 1.59% to 16,515.93, Hang Seng decreased 140.05 points or 0.7% to 19,871.53, Shanghai Composite decreased 84.17 points or 2.9% to 2,817.21, Taiwan Weighted decreased 64.96 points or 0.75% to 8,599.35, Jakarta Composite decreased 20.53 points or 0.42% to 4,811.04 FTSE Bursa Malaysia KLCI decreased 8.71 points or 0.52% to 1,679.15 and KOSPI Index decreased 2.49 points or 0.13% to 1,943.63.