Markets continue to trade lower in early noon session

Indian equity benchmarks continued to trade lower in early noon session, on account of selling in the blue chip counters, amid weak trend in the Asian markets as the Bank of Japan decided to continue applying a negative interest rate of minus 0.1 percent and keeps monetary base target unchanged at 80 trillion. Sentiments remained dented on the private report of Morgan Stanley revising its growth forecast for India for 2016 to 7.5 percent from 7.9 percent previously and noted that the country’s economy is expected to see tepid recovery largely owing to external factors. According to the global financial services firm, though the domestic macro environment has been improving steadily in the last two years, the pace of growth recovery has been slower than anticipated, held back by external factors. Investors’ sentiment turned weak despite retail inflation falling to a three-month low of 5.18 per cent in February after rising for five months in a row as food prices including vegetables, pulses and fruits became less costly.

In scrip specific development, shares of Lupin were trading down, on media reports that the United States Food and Drug Administration (USFDA) cited nine observations in its inspection of the company's Goa facility last week. However, shares of sugar producing companies continued trading higher on the bourses in otherwise weak market. Bannari Amman Sugars, Dalmia Bharat Sugar and Industries, Dwarikesh Sugar Industries, Oudh Sugar Mills and Riga Sugar Company have touched their respective 52-week highs on the BSE in intra-day trade.

The BSE Sensex is currently trading at 24656.82, down by 147.46 points or 0.59% after trading in a range of 24627.16 and 24840.77. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.39%, while Small cap index down by 0.18%.

The top gaining sectoral indices on the BSE were Metal up by 0.67%, Bankex up by 0.62%, Realty up by 0.44%, Oil & Gas up by 0.42% and PSU up by 0.35%, while FMCG down by 1.09%, TECK down by 0.62%, IT down by 0.52%, Auto down by 0.24% and Power down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were SBI up by 1.92%, Axis Bank up by 1.19%, Tata Steel up by 1.05%, Bharti Airtel up by 0.57% and BHEL up by 0.57%. On the flip side, Lupin down by 5.53%, HDFC down by 2.98%, Cipla down by 1.85%, Sun Pharma Inds. down by 1.82% and ITC down by 1.82% were the top losers. 

Meanwhile, Asian Development Bank (ADB) president Takehiko Nakao, supporting the rollout of the Goods and Services Tax (GST) regime, has said that its introduction will integrate India as “truly one single economy” and will help attract more foreign investments. Commending various reform measures taken by the government, Nakao said the pending issue of GST can be done, and it will boost growth. He further added that Indian economy should be integrated as truly one single economy and rationalisation of tax, the GST, as the government is seeking, is very important reform.

Nakao lauded the Budget 2016-17 proposals on the farm sector, and also stressed upon the need for more reforms and pushing infrastructure development. He said that one of the important agendas for India is to push infrastructure investment and it need to invest more in infrastructure. He also said that government needs to have more tax revenue to GDP ratio to do all these things. Tax to GDP ratio including state taxes can be larger. He said that Land acquisition is another area, which requires reform and State governments can frame their own land acquisitions laws.

The ADB chief further said that “We are now expecting that Indian economy will continue to exceed 7 percent in fiscal year 2016-17 and 2017-18 and we are now looking at the number again. The global economy and the Asian economy as a whole are in some form of adjustment.”

The CNX Nifty is currently trading at 7494.95, down by 43.80 points or 0.58% after trading in a range of 7483.35 and 7545.20. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were PNB up by 2.07%, SBI up by 2.04%, Yes Bank up by 1.70%, BPCL up by 1.52% and Vedanta up by 1.35%. On the flip side, Lupin down by 5.57%, HDFC down by 3.34%, Zee Entertainment down by 2.58%, Wipro down by 1.99% and ITC down by 1.95% were the top losers.

Asian markets were trading in red; Hang Seng decreased 150.47 points or 0.74% to 20,284.87, Taiwan Weighted decreased 136.72 points or 1.56% to 8,611.18, Nikkei 225 decreased 122.84 points or 0.71% to 17,110.91, Shanghai Composite decreased 31.93 points or 1.12% to 2,827.57, Jakarta Composite decreased 28.31 points or 0.58% to 4,849.22, FTSE Bursa Malaysia KLCI decreased 6.15 points or 0.36% to 1,694.16 and KOSPI Index decreased 2.3 points or 0.12% to 1,969.97.