Markets continue to trade lower in early noon session

Indian equity benchmarks continued to trade lower in early noon session, on the back of profit booking by investors after recent gains amid a lacklustre trade in Asia. Selling pressure in the metal and banking stocks too influenced the markets. Further, depreciation in the rupee also dampened the sentiment. The rupee lost another 12 paise to 67.46 against the dollar in early noon trade at the inter-bank foreign exchange market due to appreciation of the US currency overseas. Investors overlooked Finance Minister Arun Jaitley’s statement that the India’s economic growth rate is expected to increase to 7.6 percent in 2015-16, indicating that the growth has been improving in India. While talking about the position of revival of the Indian economy from the world-wide economic recession as on date, he said that the government has taken various initiatives to boost the growth of the economy, and industrial growth in particular. The growth rate increased from 6.6 percent in 2013-14 to 7.2 percent in 2014-15.

On the global front, Asian markets were trading mostly in red, with the negative lead overnight from Wall Street and the fall in crude oil prices. Back home, both the Sensex and Nifty were trading below their crucial 24, 550 and 7,450 level, respectively. In scrip specific development, shares of Crompton Greaves were trading higher as the company is selling it overseas transmission and distribution (T&D) business to First Reserve International, a US Private Equity Fund, for an enterprise value of euro 115 million.

The BSE Sensex is currently trading at 24512.09, down by 147.14 points or 0.60% after trading in a range of 24451.60 and 24566.56. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was up by 0.10%, while Small cap index down by 0.49%.

The top gaining sectoral indices on the BSE were Realty up by 1.21%, Capital Goods up by 0.60%, Power up by 0.18% and Auto up by 0.04%, while Metal down by 2.04%, FMCG down by 1.09%, Consumer Durables down by 0.64%, PSU down by 0.52% and Bankex down by 0.39% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.36%, Asian Paints up by 1.34%, Maruti Suzuki up by 1.20%, Larsen & Toubro up by 1.12% and GAIL India up by 1.02%. On the flip side, HDFC down by 2.92%, Tata Steel down by 2.28%, ITC down by 2.13%, SBI down by 1.99% and ICICI Bank down by 1.82% were the top losers.

Meanwhile, amid mounting expectation of a rate cut by the Reserve Bank of India (RBI) after the government in its Budget 2016-17 had stuck to its fiscal deficit targets for the current and coming financial years, Chief Economic Advisor Arvind Subramanian has said that rate cut is one useful input in kick-starting the economy, but is not the only panacea for the problems plaguing the economy. He stated that “I think no one policy lever is a panacea for us. You have to work on all fronts”.

Subramanian has stressed on the need to have strategies to protect against future financial crises, though said that there is a remote likelihood of that now. He further said that the fact that there are so many vulnerabilities around the world, there is a very small probability that India could have a very major financial crisis.

RBI has been under intense pressure over the past week to cut interest rates after the government stuck to its fiscal deficit targets for the current and the next financial years. A rate cut is expected in the April review. Reviving growth continues to be a priority for the policymakers and traditionally, an easy money policy is seen as a tool to achieve the end.

Since January 2015, the RBI has cut its key rates by a cumulative 1.25 per cent, when with the ebbing of inflation worries, it switched to an accommodative stance. Last rate cut by RBI was on September 29, 2015 by 50 bps from 7.25 per cent to 6.75 per cent with immediate effect in its fourth Bi-monthly Monetary Policy Statement, 2015-16.

The CNX Nifty is currently trading at 7445.05, down by 40.25 points or 0.54% after trading in a range of 7424.30 and 7461.95. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.96%, Yes Bank up by 1.90%, ONGC up by 1.56%, Ultratech Cement up by 1.20% and Maruti Suzuki up by 1.13%. On the flip side, Vedanta down by 5.53%, Hindalco down by 4.45%, Cairn India down by 3.26%, HDFC down by 3.11% and Tata Steel down by 2.28% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 129.39 points or 0.77% to 16,653.76, Hang Seng decreased 84.5 points or 0.42% to 19,927.08, Shanghai Composite decreased 62.4 points or 2.15% to 2,838.99, Taiwan Weighted decreased 30.2 points or 0.35% to 8,634.11 and FTSE Bursa Malaysia KLCI decreased 7.59 points or 0.45% to 1,680.27, while KOSPI Index increased 6.83 points or 0.35% to 1,952.95.