Benchmarks continue to trade in red; Nifty below 7700 mark

The Indian equity markets have made a lacklustre start to the new week as key benchmark indices slipped in negative territory just after few minutes of initial trade since investors turned circumspect ahead of derivatives expiry on Thursday. Profit booking in frontline blue-chip stocks, coupled with heightened chances of a US rate hike and a weak rupee subdued the Indian equity markets during the late morning trade session. Sentiments came under pressure with the Centre imposing President’s rule in Congress-ruled Uttarakhand, which could impact the functioning of the second half of the budget session and hinder passage of any crucial Bill. Further, marketmen remained cautious with the private report that indicates Indian economy is expected to grow at 7.2 per cent in 2016-17, a tad lower than Central Statistics Office's advance estimates of 7.6 per cent in the current fiscal due to weak investments and external headwinds. According to the report, Indian economy continues to face multiple challenges, and this is being reflected in high frequency data such as industrial production and trade. Meanwhile, market participants were patiently waiting for the Reserve Bank of India (RBI) monetary policy review due on April 5 amid hopes of a 25 basis points cut in interest rates. Also, volatility is likely to be witnessed this week on account of March series futures and options contracts expiry.

On the global front, some of the Asian market started the week on positive note, even though participation was still limited by the Easter holiday that kept Australia and Hong Kong traders away. Sentiments got some support after an upward revision in U.S. gross domestic product data stoked expectations for a steady recovery in the world’s largest economy. US gross domestic product increased at a 1.4 percent annual rate in Oct-Dec, above the previously reported 1.0 percent pace. Furthermore, US stocks ended five consecutive weeks of gains Thursday, as a rally that carried shares to their highest levels of the year petered out during a holiday-shortened week.

Back home, stocks from IT, Power and Oil & Gas counters were supporting the markets’ uptrend, while those from Metal, Realty and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, shares of Shree Cement gained on the report that the company is looking to ramp up capacity by another 10 million tonne (mt) in the coming three years. On the other hand, Natco Pharma has slipped 11% after the drug maker said it has received ‘minor’ observations by US Food & Drug Administration (USFDA) following recent inspections at its two facilities and they will not have an adverse impact on its current or future products.

The market breadth on BSE was negative, out of 2163 stocks traded, 873 stocks advanced, while 1148 stocks declined on the BSE.

The BSE Sensex is currently trading at 25255.89, down by 81.67 points or 0.32% after trading in a range of 25246.09 and 25432.94. 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 0.15%, while Small cap index down by 0.27%.

The top gaining sectoral indices on the BSE were IT up by 0.38%, Power up by 0.28%, TECK up by 0.16%, Oil & Gas up by 0.13% and Auto up by 0.04%, while Metal down by 1.42%, Realty down by 1.30%, Consumer Durables down by 0.59%, FMCG down by 0.33% and Bankex down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 0.99%, Mahindra & Mahindra up by 0.90%, Maruti Suzuki up by 0.84%, Infosys up by 0.82% and GAIL India up by 0.81%. On the flip side, Sun Pharma down by 2.08%, ICICI Bank down by 1.43%, HDFC down by 1.20%, Axis Bank down by 1.13% and Tata Steel down by 1.09% were the top losers.

Meanwhile, amid rising concern over the continuous decline in exports, Commerce and Industry Minister Nirmala Sitharaman will hold a meeting next week with export bodies including export promotion councils, in order to get their assessment of the global situation and look into the issue and to check whether there is a need for further government intervention. This is the first interaction that Sitharaman has scheduled with exporters after the Union Budget. The Minister has further clarified that she wants to meet the representatives from all the important sectors and it is not for any specific sector.

Over the past few months, exporters have sought a number of measures, such as extension of the Merchandise Export from India Scheme to more items, countries and also merchant exporters from identified sectors. Importing capital goods at reduced import duties under the Export Promotion Capital Goods Scheme have asked for a longer time period to meet their export obligation under the scheme due to falling exports. All such demands will be examined in the meeting.

According to estimates made by exporters’ body Federation of India Export Organisation (FIEO), Exports in the current fiscal will be around $260 billion which is about $50 billion short of exports worth $310 billion in 2014-15 and $314 billion in 2013-14.  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.

The CNX Nifty is currently trading at 7698.00, down by 18.50 points or 0.24% after trading in a range of 7690.95 and 7749.40. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Ambuja Cement up by 2.45% and BPCL up by 1.90% and Power Grid up by 1.35% and ACC up by 1.34% and Kotak Mahindra Bank up by 1.14%. On the flip side, Vedanta down by 4.13%, Hindalco down by 2.30%, Sun Pharma down by 2.09%, Cairn India down by 1.70% and Tech Mahindra down by 1.52% were the top losers.

Asian markets were trading mixed, KOSPI Index was up by 0.1%, Shanghai Composite increased 0.48% and Nikkei 225 rose 0.77%. On the flip side, Jakarta Composite was down by 1.08%, Taiwan Weighted decreased 0.09% and FTSE Bursa Malaysia KLCI was declined by 0.21%.