Late rebound help Indian Benchmarks close with moderate gain

Indian benchmark indices witnessed a smart recovery in the second half of the session and ended the day in the green, however the trade remained volatile throughout the day. Investors took some encouragement with Standard & Poor's report that continued low oil prices will boost spending in India and help mitigate fiscal and current account deficits. According to the S&P report, India still leads the pack in terms of Asia Pacific GDP growth, but 2016 is shaping up as a year of reckoning on the policy front. Some support also came with the report that Foreign Direct Investment in the country increased by 29 per cent for the 15-month period -- ended December last year -- after the launch of 'Make in India' initiative.  However, market remained under pressure for most part of the session on report that India’s merchandise exports contracted for the 15th month in a row in February amid tepid global demand and a volatile global currency market. Exports fell 5.6% in February from a year earlier to $20.73 billion, the slowest decline since December 2014 when shipments fell 3.77%.

Market participants also remained cautious with the report that Agriculture sector, which provides livelihood to over 50% of the workforce in the country, grew by an average 1.6 per cent per annum in first four years of the ongoing Five Year Plan (2012-17), as against the targeted 4 per cent annual growth due to lower production. Meanwhile, metal and mining stocks dropped on the back of decline in global commodity prices, while the gold and jewellery shares reeled under pressure on report that gold imports in February declined 29.49% to $1.39 billion. Some weakness was also witnessed in fertilizers stock after the Ministry of Chemicals & Fertilizers made it mandatory for fertilizer companies to print the MRP and available subsidy on each bag of P&K fertilizers. On the other hand, banking stocks witnessed some strong buying as sharp decline in the consumer inflation and still negative wholesale inflation in February raised expectations of a rate cut by the central bank.

On the global front, Asian markets ended mostly in green, thanks to a recovery in oil prices. The Oil prices gained on an announcement that producers will meet next month in Qatar to discuss a proposal to freeze output and on growing signs of a decline in US crude production. However, the Japanese market ended in red despite the yen weakness after Japan’s central bank President floated the prospect of further interest-rate cuts. Meanwhile, European equities were trading firm as participants await the decision from the US Federal Reserve's monetary policy committee.

Back home, after getting weak start, Indian market extended their losses in late morning session, tracking weakness in their Asian peers and caution ahead of the outcome of the US Federal Reserve's two-day policy meet which ends later today. The selling pressure intensified in the noon trades as investors took to across the board risk aversion. However, the frontline gauges managed to pare the losses and rose above the neutral line in the dying hours of trade, tracking firm trade in the European markets. Eventually the NSE’s 50-share broadly followed index - Nifty garnered over half a percentage gain to settle just below the crucial 7,500 levels, while Bombay Stock Exchange’s Sensitive Index - Sensex smashed a century and closed above the psychological 24,600 mark. However, the broader markets failed to show any kind of fervor and settled with cuts of around a quarter percent. On the BSE sectoral space, banking counter remained the top gainer in the space with around a percent gains, followed by the IT and FMCG indices which ended with similar gains. On the flipside, the Consumer Durables, Metal and Auto sectors languished at the bottom of the table with losses of 3.66%, 0.75% and 0.47% respectively. The market breadth remained awful as there were 1165 shares on the gaining side against 1410 shares on the losing side, while 161 shares remained unchanged.

Finally, the BSE Sensex gained 131.31 points or 0.53% to 24682.48, while the CNX Nifty rose 38.15 points or 0.51% to 7,498.75.

The BSE Sensex touched a high and a low 24817.80 and 24552.26, respectively. The broader indices made a negative closing; the BSE Mid cap index ended down by 0.41%, while Small cap index declined by 0.17%

The top gaining sectoral indices on the BSE were Bankex up by 0.88%, IT up by 0.86%, FMCG up by 0.81% and TECK up by 0.55%, while Consumer Durables down by 3.61%, Metal down by 0.77%, Auto down by 0.51%, Oil & Gas down by 0.22% and PSU down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 2.30%, ITC up by 1.66%, Infosys up by 1.56%, Cipla up by 1.52% and Lupin up by 1.27%. On the flip side, Asian Paints down by 2.17%, Bajaj Auto down by 1.51%, Bharti Airtel down by 1.16%, Sun Pharma Inds. down by 0.86% and Hero MotoCorp down by 0.46% were the top losers.

Meanwhile, the poor run of the Indian trade continued for the 15th month in a row, with exports dipping 5.66 percent in February to $ 20738.60 million, against $21983.43 million in February 2015, due to contraction in shipments of petroleum and engineering goods amid tepid global demand. However, the trade deficit, fell to near five-year low of $ 6541.82 million during February 2016, as compared to $ 6741.95 million in February 2015, as imports too slowed down. Imports declined by 5.03 percent to $ 27280.42 million last month. The trade deficit - difference between imports and exports - was the lowest since March 2011 when it was $ 5.6 billion.

As per the data released by the commerce ministry, exports during February, 2016 were valued at $ 20738.60 million, 5.66 per cent lower in Dollar terms compared to of $ 21983.43 million in February 2015, or Rs 141515.41 crore which was 3.77 per cent higher in Rupee terms than the level Rs 136379.94 crore during February, 2015. Cumulative value of exports for the period April-February 2015-16 was $ 238418.11 million, down by 16.73 percent as against $ 286305.92 million, while in rupee term it stood at Rs. 1556576.47 crore, down 10.86 per cent at Rs. 1746265.60 crore over the same period last year.

Imports during February, 2016 were valued at $ 27280.42 million, down 5.03 per cent in Dollar terms over the level of imports valued at $ 28725.38 million in February, 2015, while in rupee term the imports was of Rs 186155.30 crore 4.46 per cent higher from Rs. 178205.35 crore in same month last year. Cumulative value of imports for the period April-February 2015-16 was $ 351806.61 million as against $ 412604.70 million registering a negative growth of 14.74 per cent, while in rupee term it was Rs 2295116.34 crore compared to Rs 2515834.93 crore, down 8.77 per cent in Rupee terms over the same period last year.

Oil imports during February, 2016 were valued at $ 4767.69 million which was 21.92 per cent lower than oil imports valued at $ 6106.33 million in the corresponding period last year. Oil imports during April-February, 2015-16 were valued at $ 77862.30 million, down 40.52 per cent from $ 130906.99 million in the corresponding period last year. Non-oil imports during February, 2016 were estimated at $ 22512.73 million, down modestly by 0.47 per cent than non-oil imports of $ 22619.05 million in February, 2015. Non-oil imports during April-February, 2015-16 were valued at $ 273944.31 million, which was 2.75 per cent lower than the level of such imports valued at $ 281697.71 million in April-February, 2014-15.

Besides a global slowdown, the severe fall in exports is attributed to a decline in global commodity prices. The government had earlier set a $300 billion export target for 2015-16, but there was talk of revising it downwards to $260 billion, even then as much as $22 billion worth of goods need to be exported in March to meet the truncated target.

The CNX Nifty touched a high and low 7,508.00 and 7,405.15 respectively. 

The top gainers on Nifty were ICICI Bank up by 2.58%, Kotak Mahindra Bank up by 2.11%, Axis Bank up by 1.68%, Cipla up by 1.66% and HDFC up by 1.50%. On the flip side, Hindalco down by 2.74%, Vedanta down by 2.27%, Asian Paints down by 2.11%, Sun Pharma down by 1.09% and YES Bank down by 0.98% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 14.62 points or 0.24% to 6,154.59, France’s CAC gained 17.76 points or 0.4% to 4,490.39 and Germany’s DAX was up by 76.38 points or 0.77% to 10,010.23.

Asian equity markets ended mostly in green on Wednesday, followed by a positive close on Wall Street overnight while traders remained cautious over the outcome of the US Federal Reserve policy meeting, scheduled for Wednesday. Markets were also watching for news from the annual session of China's National People's Congress. Concerns have been growing lately that the economy is losing momentum and can no longer serve as such a strong driver of regional growth. Meanwhile, Hong Kong shares finished down as investors sold shares on the final day of the annual meeting of China's parliament.