Benchmarks off day’s low; Sensex hold 24,600 mark

Indian equity benchmarks have showed decent recovery in noon deals with Sensex and Nifty recapturing their crucial 24,600 and 7,450 levels, respectively as investors went for bargain hunting. Though, markets continue to reel in red terrain weighed down by metal stocks and index heavyweights like HDFC and ITC. Weak global cues too dampened sentiments with most of the Asian equity indices were trading in red at this point of time as fresh concerns about global growth driven by weak Chinese trade data hit sentiment. Closer home, losses remained capped as some support came with Moody's Investors Service stating that though 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 stated we believe that the positive impact of lower commodity prices on global growth helps mitigate the negative effect from the financial market turbulence. Meanwhile, the broader indices were outperforming benchmarks, while the market breadth on the BSE was negative; there were 1,000 shares on the gaining side against 1,263 shares on the losing side while 115 shares remain unchanged.

The BSE Sensex is currently trading at 24623.73, down by 35.50 points or 0.14% after trading in a range of 24451.60 and 24627.05. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index was up by 0.28%, while Small cap index down by 0.35%.

The top gaining sectoral indices on the BSE were Realty up by 1.53%, Capital Goods up by 0.85%, Consumer Discretionary Goods & Services up by 0.46%, Auto up by 0.45% and Power up by 0.35%, while Metal down by 1.74%, FMCG down by 1.01%, Basic Materials down by 0.75%, Consumer Durables down by 0.59% and Healthcare down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.21%, ONGC up by 1.44%, Larsen & Toubro up by 1.41%, Asian Paints up by 1.21% and BHEL up by 1.08%. On the flip side, HDFC down by 2.49%, ITC down by 2.02%, Tata Steel down by 1.92%, Sun Pharma down by 1.35% and TCS down by 1.00% 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 7479.90, down by 5.40 points or 0.07% after trading in a range of 7424.30 and 7487.85. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.04%, Yes Bank up by 2.64%, Maruti Suzuki up by 2.41%, Kotak Mahindra Bank up by 1.36% and ONGC up by 1.36%. On the flip side, Vedanta down by 4.70%, Hindalco down by 3.79%, Cairn India down by 2.93%, HDFC down by 2.52% and BPCL down by 2.13% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 decreased 140.95 points or 0.84% to 16,642.20, Hang Seng slipped 71.96 points or 0.36% to 19,939.62, Shanghai Composite declined 63.79 points or 2.2% to 2,837.60, Taiwan Weighted dipped 30.2 points or 0.35% to 8,634.11 and FTSE Bursa Malaysia KLCI was down by 7.39 points or 0.44% to 1,680.47. On the flip side, KOSPI Index was up by 6.83 points or 0.35% to 1,952.95.