Markets trade in green; Sensex reclains 25,000 level

After witnessing a sharp fall in last session, Indian equity markets made a flat-to-negative opening but are now trading in green with modest gain in early deals on Tuesday. Investors’ sentiment turned positive on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 2042.94 crore on March 28, 2016, as per provisional data released by the stock exchanges. further, some support also came in with the statement of Prime Minister Narendra Modi that India will live up to the global expectation of being a bright spot for growth with requisite policy as also administrative reforms on a sustained basis. Meanwhile, amid rising concern over default by large borrowers like liquor baron Vijay Mallya, Prime Minister Modi has stressed that the government as well as RBI is taking ‘tough action’ to recover loans from corporate defaulters.  Besides, buying in banking stocks too supported the sentiment, as the government is likely to infuse additional capital of about Rs 5,050 crore in some public sector banks this week. However, traders are likely to maintain caution ahead of the expiry of derivative contracts of March series.

In the scrip specific development, Albert David surged over 8 percent, extending its previous day’s 7 percent rise on the BSE, after the Ahmedabad-based pharma major Cadila Healthcare acquired Actibile, a gastroenterology brand of the company. ARSS Infrastructure Projects was trading higher by 4 per cent on the BSE after the company won order worth of Rs 109 crore.

On the global front, US markets ended mixed on Monday as weaker-than-expected US economic data reduced concerns about potential interest rate hikes and a dip in oil prices pushed down energy shares.  Asian markets were trading mostly in red following the mixed cues overnight from Wall Street. Investors also turned cautious ahead of the U.S. Federal Reserve chair Janet Yellen's speech on the U.S. economy in New York later in the day, which might potentially shed some light on the outlook for interest rates.

Closer home, most of the sectoral indices on BSE were trading in green, with prominent gainers being the stocks from Realty, Bankex, Power, Metal and Auto counters. On the flip side, stocks from Consumer Durables, IT and TECK counters were the only losers. The market breadth on BSE was positive in the ratio of 878: 634, while 72 scrips remained unchanged.

The BSE Sensex is currently trading at 25003.16, up by 36.76 points or 0.15% after trading in a range of 24917.56 and 25018.74. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.15%, while Small cap index gained 0.24%.

The top gaining sectoral indices on the BSE were Realty up by 1.06%, Bankex up by 0.81%, Power up by 0.68%, Metal up by 0.59% and Auto up by 0.57%, while Consumer Durables down by 0.37%, IT down by 0.26% and TECK down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.49%, Axis Bank up by 1.41%, Tata Motors up by 1.39%, Asian Paints up by 1.39% and Tata Steel up by 1.25%. On the flip side, Sun Pharma Inds. down by 2.03%, Lupin down by 0.98%, HDFC down by 0.78%, Wipro down by 0.73% and GAIL India down by 0.73% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan who is known for his criticism of unconventional’ monetary policies of central banks, has said that there should be guidelines for responsible monetary policy behaviour globally, as aggressive actions by one nation can lead to significant adverse cross- border spillovers on others. Rajan said that we can pretend all is well with the global monetary non-system and hope that nothing goes spectacularly wrong, or we can start building a system fit for the integrated world of the twenty-first century.

RBI governor in a working paper titled ‘Rules of Monetary Policy’ with Prachi Mishra, advisor, RBI, has suggested that aggressive monetary policy actions by one country can lead to significant adverse cross-border spillovers on others, especially as countries contend with the zero lower bound. If countries do not internalize these spillovers, they may undertake policies that are collectively suboptimal. Perhaps instead, countries could agree to guidelines for responsible behaviour that would improve collective outcomes.

He further suggested that policies that generally have positive or domestic effects could be rated green, policies that should be used temporarily and with care could be rated orange, and policies that should be avoided at all times could be rated red. Rajan has also stated in the paper that the temptation to shift costs can create inefficiencies when countries set their policies unilaterally.

However, noting that economic analysis of the issues is at an early stage, Rajan said it is unlikely 'we will get strong policy prescriptions soon, let alone international agreement on them, especially given that a number of country authorities like central banks have explicit domestic mandates'. Following the global financial crisis of 2008, many central banks in developed countries, had followed ‘unconventional monetary policies’ by keeping their policy rates close to zero for long periods to boost economic activity.

The CNX Nifty is currently trading at 7630.30, up by 15.20 points or 0.20% after trading in a range of 7602.10 and 7634.75. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.22%, Asian Paints up by 1.58%, Axis Bank up by 1.48%, Kotak Mahindra Bank up by 1.46% and Tata Steel up by 1.45%. On the flip side, Sun Pharma Inds. down by 2.06%, Cairn India down by 1.57%, Lupin down by 1.05%, Zee Entertainment down by 1.02% and Wipro down by 0.98% were the top losers.

Asian markets were trading mostly in red, Taiwan Weighted decreased 80.15 points or 0.92% to 8,610.30, Hang Seng decreased 70.45 points or 0.35% to 20,275.16, Shanghai Composite decreased 33.72 points or 1.14% to 2,924.10, Nikkei 225 decreased 27.83 points or 0.16% to 17,106.54 and Jakarta Composite decreased 0.21 points or 0% to 4,773.42.

On the flip side, KOSPI Index increased 3.86 points or 0.19% to 1,986.40 and FTSE Bursa Malaysia KLCI increased 9.78 points or 0.57% to 1,712.19.