Markets trade lower in early deals paring some last session gains

After witnessing a sharp rise in last session, the Indian equity markets have made a flat start and are trading with cut of over quarter a percent in early deals, as traders booked some profits at higher levels. Weakness in other Asian markets also dampened the sentiment. Further, sentiment were under pressure with slow growth of the manufacturing activity, as the yearly SBI Composite Index for March declined below 50 and is at 49.5, compared with last month index of 51.3. Besides, depreciation in Indian rupee too weighed down the sentiment. The rupee depreciated 11 paise to 66.64 against the US currency in early trade on Tuesday on account of higher demand for the dollar from importers.  However, the session was productive for broader indices, which outperforming larger counterparts were trading with gains in the range of 0.20-0.35%.  Defence shares such as Reliance Defence, BEML, Bharat Electronics, Bharat Forge and Rolta were higher, as government cleared new procurement policy.

In the scrip specific development, JMC Projects (India) surged 12 percent on the BSE after the company secured new orders worth over Rs 930 crore. Indoco Remedies rallied 13 percent on the National Stock Exchange (NSE) after the company received US Food and Drug Administration (USFDA) approval for Goa solid dosages plant.

On the global front, the US markets ended flat on Monday, as investors searched for fresh catalysts and showed concerns about fully-extended share prices after a five-week rally. Asian markets were trading in green as hawkish comments from US Federal Reserve officials clouded the monetary policy outlook less than a week after Fed Chair Janet Yellen had set out a more cautious path to interest rate increases this year.

Back home, traders were seen piling up position in Capital Goods, Oil & Gas, Realty, Power and Metal, while selling was witnessed in IT, TECK, FMCG, Bankex and Auto.

The market breadth on BSE was positive in the ratio of 868: 622, while 102 scrips remained unchanged.

The BSE Sensex is currently trading at 25183.23, down by 102.14 points or 0.40% after trading in a range of 25179.59 and 25331.01. There were 11 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.33%, while Small cap index gained 0.19%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.86%, Oil & Gas up by 0.61%, Realty up by 0.60%, Power up by 0.59% and Metal up by 0.30%, while IT down by 0.78%, TECK down by 0.64%, FMCG down by 0.59%, Bankex down by 0.54% and Auto down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 3.48%, Lupin up by 1.34%, Tata Steel up by 0.83%, Reliance Industries up by 0.75% and Larsen & Toubro up by 0.71%. On the flip side, Dr. Reddys Lab down by 2.46%, Adani Ports &Special down by 1.85%, Hero MotoCorp down by 1.63%, Infosys down by 1.29% and HDFC down by 1.18% were the top losers.

Meanwhile, giving some relief to the government, India's current account deficit (CAD), which mirrors the difference between domestic savings and domestic investment, narrowed to 1.3 percent of GDP in third quarter of the fiscal as against 1.5 percent in the same period last year, mainly on account of lower trade deficit. The trade deficit was at $ 34.0 billion, lower than $ 38.6 billion in Q3 of last year and $ 37.4 billion in the preceding quarter.

Reserve Bank of India (RBI), while releasing the Balance of Payments (BoP) data for October-December quarter of 2015-16, said that India's CAD at $7.1 billion or 1.3 percent of GDP in Q3 of 2015-16 was lower than $ 7.7 billion or 1.5 percent of GDP in Q3 of 2014-15 and $ 8.7 billion or 1.7 percent of GDP in the preceding quarter. The central bank further said that private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $15.8 billion, a decline from their level in the preceding quarter as well as from a year ago. After moderating in the second quarter to $6.6 billion, net foreign direct investment (FDI) again picked up and stood at $10.1 billion in the third quarter. Against a sharp drop in net outflow in portfolio investments at $3.5 billion in the preceding quarter, net outflow was just $0.2 billion in the December quarter. Non-resident Indian (NRI) deposits moderated significantly in the third quarter of 2015-16 to $5.9 billion over the preceding quarter’s $4.2 billion.

On a cumulative basis, the CAD narrowed to 1.4 percent of GDP in April-December from 1.7 percent in the corresponding period of 2014-15, on the back of the contraction in the trade deficit. India’s trade deficit narrowed to $ 105.6 billion in April-December 2015 from $ 113.4 billion during the same period of 2014-15. RBI stated that in April-December 2015, there was an accretion of $ 14.6 billion to foreign exchange reserves (on a BoP basis) as compared with $ 31.3 billion in the corresponding period of 2014-15.

The CNX Nifty is currently trading at 7674.65, down by 29.60 points or 0.38% after trading in a range of 7672.80 and 7711.10. There were 19 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BHEL up by 3.53%, Lupin up by 1.20%, Cairn India up by 0.83%, ONGC up by 0.78% and Bosch up by 0.77%. On the flip side, Dr. Reddys Lab down by 2.55%, Adani Ports &Special down by 2.07%, Hero MotoCorp down by 1.49%, ITC down by 1.33% and Infosys down by 1.29% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 74.31 points or 0.36% to 20,609.84, Taiwan Weighted decreased 72.7 points or 0.82% to 8,740.00, Jakarta Composite decreased 24.65 points or 0.5% to 4,860.52, Shanghai Composite decreased 23.66 points or 0.78% to 2,995.14 and KOSPI Index decreased 1.22 points or 0.06% to 1,988.54.

On the flip side, FTSE Bursa Malaysia KLCI increased 0.04 points or 0% to 1,718.40, Nikkei 225 increased 176.48 points or 1.06% to 16,901.29.