Benchmarks end a lackluster session with modest gain; Nifty holds 7700 mark

After making sluggish start, Indian equity markets managed to eke out some gains by the end of trade on Wednesday, as the benchmark indices clawed back into the green terrain in the last leg of trade on getting some supportive leads from the European markets. Sentiments got a boost with a report that the current account deficit which narrowed in the October-December quarter of 2015 is likely to shrink further in the March quarter of this year. According to the report, the monthly run rate for the trade deficit is tracking well under $10 billion in 2016, which should shrink CAD further in the March quarter. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,095.44 crore on March 22, 2016. However, market participants were cautious for most part of the session ahead of a long weekend and amid geopolitical concerns after militants targeted Brussels airport and a city metro station on Tuesday.  Also, the global rating agency Standard and Poor's report that the Indian banking sector might continue to face tough times over next 12 months as their asset quality and capitalisation remain under pressure, too weighed on the sentiments. According to Standard and Poor's, the asset quality is likely to remain under pressure due to tepid domestic industrial activity, and subdued profitability and high leverage in some corporate sectors. Meanwhile, metal shares gained across the board following signs of revival in China's housing market and supply cuts by firms like Glencore and Freeport McMoRan which is likely to lift the copper prices higher, while weakness in global crude oil prices weighed on oil explorers like ONGC, Cairn India and Oil India. 

On the global front, Asian markets were largely quiet on Wednesday, as dealers remained cautious, with airlines taking a hit in the aftermath of the deadly Brussels bombings. The losses tracked a sell-off in tourism-related stocks in the United States and Europe following Tuesday's carnage in Belgium.  However, European stocks rose in early trade, with Credit Suisse among the gainers as investors welcomed the bank’s latest cost-cutting efforts. Meanwhile, oil prices were lower as investors eyed the release of US crude oil inventories later in the session amid ongoing concerns about oversupply.

Back home, the benchmark began on a cautious note tracking sluggish cues from the Asian markets which opened on a tepid note on the back of weak leads from overnight US markets. Thereafter, the key indices failed to show any kind of fervor due to lack of any encouraging leads. The selling pressure accentuated in the mid morning trades as investors took to across the board risk aversion. The key gauges made some attempts to claw back into the green zone in early afternoon trades but profit booking at higher levels dragged the key indices to the lowest point in the session. However, late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses go home with some tiny gains. Finally, the NSE’s 50-share broadly followed index Nifty, added single digit gains to settle above the crucial 7,700 support level, while Bombay Stock Exchange’s Sensitive Index or Sensex gained around seven points and ended above the psychological 25,300 mark. Moreover, the broader markets too showed some resilience and settled on a positive note, outperforming their larger peers. On the BSE sectoral space, Metal counter remained the top gainer in the space with over a percent gains, followed by the TECK, IT and Auto indices which ended with gains of over half a percent. On the flipside, the Oil & Gas and Consumer Durables sectors languished at the bottom of the table with losses of 1.10% and 1% respectively. The market breadth remained awful as there were 1287 shares on the gaining side against 1313 shares on the losing side, while 173 shares remained unchanged.

Finally, the BSE Sensex gained 7.07 points or 0.03% to 25337.56, while the CNX Nifty rose 1.60 points or 0.02% to 7,716.50.

The BSE Sensex touched a high and a low 25367.81 and 25156.82, respectively. The broader indices made a positive closing; the BSE Mid cap index ended up by 0.24%, while Small cap index gained by 0.24%

The top gaining sectoral indices on the BSE were Metal up by 1.71%, TECK up by 0.67%, IT up by 0.61%, Auto up by 0.56% and Capital Goods up by 0.47%, while Oil & Gas down by 1.10%, Consumer Durables down by 1.00%, Power down by 0.28%, Bankex down by 0.24% and Realty down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.31%, Bharti Airtel up by 2.06%, Bajaj Auto up by 2.05%, Infosys up by 1.50% and Coal India up by 1.05%. On the flip side, Reliance Industries down by 1.83%, Lupin down by 1.63%, GAIL India down by 1.56%, NTPC down by 0.82% and Mahindra & Mahindra down by 0.81% were the top losers.

Meanwhile, India has got investments over Rs 1.28 lakh crore in electronics manufacturing sector. Communications and IT Minister Ravi Shankar Prasad speaking at the Digital India summit has said that government was working towards making India a hub for electronics manufacturing, in which the Centre and states have to play a crucial part, he cited that when this government came in 2014, the total investment in electronics manufacturing was around Rs 11,700 crore and as now it is Rs 1,28,000 crore plus.

Prasad further said that the government's aim is to not only create a digital enabled society, but also a digitally- empowered and enlightened India. He added that India is fast adopting technology and the country is likely to have half a billion Internet users by the end of this year. He also said that Indians first watch technology, then they adopt it, then start enjoying it and then they become enlightened and empowered.

The communication minister said that today India has a billion plus mobile phone users, 990 million have Aadhaar card. Government has saved close to Rs 50,000 crore by directly giving subsidy to Aadhaar-enabled bank accounts. He also noted that while it took 2.5-3 years for Internet users to go from 200 to 300 million. It has taken a year to reach 400 million. He further said that when all gram panchayats are linked through the broadband network, then e-business, e-education, e-health and other projects can be started in villages.

The CNX Nifty touched a high and low 7,726.85 and 7,670.60 respectively. 

The top gainers on Nifty were Hindalco up by 4.37%, Idea Cellular up by 2.65%, Tata Steel up by 2.32%, Bajaj-Auto up by 1.99% and Yes Bank up by 1.90%. On the flip side, Reliance Industries down by 1.97%, PNB down by 1.75%, Lupin down by 1.62%, Bank of Baroda down by 1.60% and GAIL India down by 1.54% were the top losers.

European markets were trading in green; UK’s FTSE 100 increased 10.28 points or 0.17% to 6,203.02, France’s CAC gained 26.01 points or 0.59% to 4,457.98 and Germany’s DAX was up by 84.11 points or 0.84% to 10,074.11.

Asian equity markets ended mostly lower on Wednesday as falling oil prices and fresh geopolitical worries in light of Tuesday's terrorist attacks in Brussels kept risk appetite in check ahead of the long Easter break beginning on Friday. Japanese shares fell in choppy trade as investors remained wary of movements in yen, oil and China's yuan, which eased against the dollar today, despite a firmer midpoint setting by the People's Bank of China. Seoul shares ended lower as investors braced for earnings and North Korea threatened a ‘miserable end’ for South Korea's president and her American allies in its latest colorfully worded attack. But Chinese shares bucked the trend to finish higher, despite Fitch Ratings warning on banks' profitability in 2016. Fitch expects Chinese bank profits to decline this year unless authorities relax the minimum NPL provisioning requirement of 150 percent.