Markets trade flat in early delas ahead of derivatives expiry

After posting massive gains in previous session, Indian equity market have made a flat opening and are trading with modest gains in morning deals, as participants turned cautious ahead of the expiry of March derivative contracts later today.  Though, traders were getting some encouragement with Finance Minister Arun Jaitley’s atatement that Australian future and super funds be exposed to India, as he called for increase in investment by Australia businesses in India as they can get better returns on their investment. The sentiments were further supported by Indian rupee appreciating by 6 paise to 66.31 against the US dollar in early trade on continued selling of the American currency by banks and exporters amid increased foreign fund inflows. Meanwhile, foreign institutional investors were net buyers in the equities to the tune of Rs 1,442 crore on Wednesday, as per provisional stock exchange data, that added positive milieu. 

In the scrip specific development, Hindustan Zinc rallied 11 per cent on the BSE after the company’s board recommended a special dividend of 1200% or Rs 24 per equity share of face value of Rs 2/- for the current fiscal.  Kansai Nerolac Paints and Brigade Enterprises gained over 3.5 percent each after the industrial paints maker Kansai Nerolac said it has completed sale of its land in Chennai to realty firm Brigade Properties for over Rs 535 crore.

On the global front, US markets ended higher on Wednesday as traders continued to react positively to yesterday's remarks by Federal Reserve Chair Janet Yellen, which were seen as dovish regarding the outlook for interest rates.  Asian markets were trading mostly in red despite firm lead overnight from Wall Street.  The Japanese market pared its initial gains and is modestly higher, while a weaker yen is boosting exporters' shares.

Back home, traders were seen piling up position in IT, TECK, Power, Auto and FMCG, while selling was witnessed in Realty, Consumer Durables, PSU, Metal and Oil & Gas. The market breadth on BSE was positive in the ratio of 797: 597 while 86 scrips remained unchanged.

The BSE Sensex is currently trading at 25372.28, up by 33.70 points or 0.13% after trading in a range of 25341.47 and 25420.35. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.06%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were IT up by 0.96%, TECK up by 0.73%, Power up by 0.11%, Auto up by 0.01% and FMCG up by 0.01%, while Realty down by 0.49%, Consumer Durables down by 0.42%, PSU down by 0.41%, Metal down by 0.27% and Oil & Gas down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.79%, Infosys up by 1.41%, Bajaj Auto up by 1.02%, TCS up by 0.97% and Sun Pharma Inds. up by 0.84%. On the flip side, ONGC down by 2.46%, Tata Steel down by 1.36%, Asian Paints down by 1.06%, BHEL down by 0.96% and Adani Ports &Special down by 0.92% were the top losers.

Meanwhile, Reserve Bank of India has expanded the source of funding for the infrastructure sector by allowing them to raise shorter-term external commercial borrowings (ECBs). RBI in its revised framework notified that, taking into account prevailing external funding sources, particularly for long term lending and the critical needs of infrastructure sector of the country, the extant ECB guidelines have been reviewed in consultation with the Government of India.

RBI in its circular said that the companies in infrastructure sector, non-banking financial companies-infrastructure finance companies (NBFC-IFCs), NBFCs-asset finance companies (NBFC-AFCs), holding companies and core investment companies (CICs) will also be eligible to raise ECB under Track 1 of the framework with minimum average maturity period of 5 years, subject to 100 per cent hedging.

The central bank also said that for the purpose of ECB, “Exploration, Mining and Refinery” sectors which are not included in the Harmonised list of infrastructure sector but were eligible to take ECB under the previous ECB framework will be deemed as in the infrastructure sector, and can access ECB as applicable to infrastructure sector under.It has further said that companies in infrastructure sector shall utilize the ECB proceeds raised under Track I for the end uses permitted for this Track. NBFCs-IFCs and NBFCs-AFCs will, however, be allowed to raise ECB only for financing infrastructure. It added that holding Companies and CICs shall use ECB proceeds only for on-lending to infrastructure Special Purpose Vehicles (SPVs). The individual limit of borrowing under the automatic route for aforesaid companies shall be as applicable to the companies in the infrastructure sector (currently $ 750 million). Also, companies in infrastructure sector, Holding Companies and CICs will continue to have the facility of raising ECB under Track II of the ECB framework subject to the conditionalities prescribed thereof.

The CNX Nifty is currently trading at 7740.15, up by 4.95 points or 0.06% after trading in a range of 7725.50 and 7754.30. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.51%, Tata Power up by 1.92%, Hero MotoCorp up by 1.72%, Tech Mahindra up by 1.53% and Infosys up by 1.40%. On the flip side, ONGC down by 2.34%, Tata Steel down by 1.36%, Asian Paints down by 1.17%, PNB down by 1.17% and Hindalco down by 1.08% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 21.34 points or 0.1% to 20,782.05, Taiwan Weighted decreased 17.86 points or 0.2% to 8,719.18, KOSPI Index decreased 10.22 points or 0.51% to 1,991.92, FTSE Bursa Malaysia KLCI decreased 4.39 points or 0.26% to 1,713.43 and Jakarta Composite decreased 3.98 points or 0.08% to 4,812.67.

On the flip side, Shanghai Composite increased 10.89 points or 0.36% to 3,011.53, Nikkei 225 increased 11.08 points or 0.07% to 16,890.04.