Markets continue to trade lower in early noon session

Indian equity benchmarks continued to trade lower in early noon session, on account of selling by fund and retail investors in the blue-chip counters amid weak global cues. Sentiment remained downbeat with rating agency, India Ratings and Research's statement that the new fiscal (FY17) is likely to remain challenging for corporate India, and corporates are unlikely to take up new investments on weaker credit conditions than in 2015-16. It also believes the aggregate EBITDA levels of corporates will grow only modestly during 2016-17, given the budgetary focus on consolidation of fiscal deficit. Moreover, a cautious approach adopted by participants on the first trading session of fiscal 2016-17 too influenced sentiment. However, investors got some support as the growth in eight core sectors expanded to a 15-month high of 5.7% in February due to sharp pick-up in natural gas, refinery products, fertiliser, cement and electricity generation. Traders were seen piling position in Realty, Capital Goods, Power, FMCG and Consumer Durables stocks while selling was witnessed in Metal, Oil & Gas, TECK, IT and Auto sector stocks.

Asian markets were trading in lower ahead of surveys on global manufacturing and the latest reading on US jobs. Back home, both the Sensex and Nifty were trading below their crucial 25,250 and 7,710 level respectively. In scrip specific development, shares of Ashok Leyland were trading higher after the commercial vehicles maker today reported a 31% increase in total sales at 16,702 units in March. The company had sold 12,754 units in the same month last year.

The BSE Sensex is currently trading at 25249.21, down by 92.65 points or 0.37% after trading in a range of 25193.59 and 25354.94. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.65%.

The top gaining sectoral indices on the BSE were Realty up by 2.06%, Capital Goods up by 1.36%, Power up by 0.73%, FMCG up by 0.66% and Consumer Durables up by 0.19%, while Metal down by 0.89%, Oil & Gas down by 0.84%, TECK down by 0.73%, IT down by 0.47% and Auto down by 0.31% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 4.18%, ITC up by 1.92%, Larsen & Toubro up by 1.63%, Wipro up by 0.89% and Cipla up by 0.82%. On the flip side, Bharti Airtel down by 3.13%, Adani Ports &Special down by 2.08%, ONGC down by 1.96%, TCS down by 1.81% and Tata Steel down by 1.50% were the top losers.

Meanwhile, The core sectors in the country once again locked themselves into a faster growth trajectory, rising to 15 month high of 5.7 per cent in the month of February, on the back of a strong showing by fertiliser, cement, electricity and refinery products. The eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel having weightage of 38% in the overall Index of Industrial Production (IIP) rose to 5.7 per cent in February compared with 2.9% in the previous month. It is the highest growth since November 2014, when these sectors had witnessed a growth of 6.7 per cent.

According to data released by the ministry of commerce and industry, the combined Index of Eight Core Industries stands at 172.2 in February, 2016, which was 5.7 %higher compared to the index of February, 2015. Its cumulative growth during April to February, 2015-16 was 2.3 %. Seven out of eight sectors that make up the core index reported positive growth in February. Only steel sector posted negative output growth in February.

Among the eight sectors, fertilizer and cement expanded by double-digits. Fertilizer production having weightage of 1.25% increased by 16.3% in February, 2016 over February, 2015. Its cumulative index during April to February, 2015-16 increased by 10.3% over the corresponding period of previous year. Cement production having weight 2.41% rose for a third straight month by 13.5% in February, 2016 over February, 2015. Its cumulative index during April to February, 2015-16 increased by 3.9% over the corresponding period of previous year. The low base of the previous year-- a contraction of 0.4 per cent in fertiliser and growth of 2.2 per cent in cement-- pushed up the numbers this February.

Electricity generation, having 10.32% weight touched a five-month high of 9.2 per cent in February, led by a double-digit growth of thermal electricity generation of 12 per cent, the impact of which was dampened by an 11 per cent contraction in hydroelectricity generation. Its cumulative index during April to February, 2015-16 increased by 4.6% over the corresponding period of previous year. Coal production having 4.38% weight increased by 3.9% in February, 2016 over February, 2015. Its cumulative index during April to February, 2015-16 increased by 5.0% over corresponding period of previous year. Crude Oil production having weight 5.22% increased by 0.8% in February, 2016 over February, 2015. Its cumulative index during April to February, 2015-16 decreased by 1.0% over the corresponding period of previous year. Natural Gas production having weight 1.71% increased by 1.2 % in February, 2016 over February, 2015. Its cumulative index during April to February, 2015-16 declined by 3.6% over the corresponding period of previous year. Petroleum Refinery production having weight of 5.94% increased by 8.1% in February, 2016 over February, 2015. Its cumulative index during April to February, 2015-16 increased by 3.1 % over the corresponding period of previous year.

Despite the improvement, steel remained the only core to record a contraction in February, thanks to poor demand from end-users as well as availability of cheaper imports. The imposition of minimum import price for steel imports helped to restrict the contraction to just 0.5 per cent in February 2016 from an average of 5% in the previous three months.

The broad-based improvement in core-sector growth in February will likely support the IIP estimate for the month, although the performance of the IIP in February could remain weak due to an unfavorable base.

The CNX Nifty is currently trading at 7705.65, down by 32.75 points or 0.42% after trading in a range of 7692.05 and 7740.15. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were BHEL up by 4.13%, Bank of Baroda up by 1.97%, ITC up by 1.86%, Larsen & Toubro up by 1.64% and HCL up by 0.87%. On the flip side, Bharti Airtel down by 3.32%, Idea Cellular down by 2.77%, Adani Ports &Special down by 2.12%, TCS down by 1.99% and Aurobindo Pharma down by 1.95% were the top losers.

Asian markets were trading in red; Nikkei 225 decreased 617.79 points or 3.69% to 16,140.88, Hang Seng decreased 243.75 points or 1.17% to 20,532.95, Taiwan Weighted decreased 87.28 points or 1% to 8,657.55, KOSPI Index decreased 22.28 points or 1.12% to 1,973.57, Shanghai Composite decreased 19.45 points or 0.65% to 2,984.46, Jakarta Composite decreased 10.08 points or 0.21% to 4,835.29 and FTSE Bursa Malaysia KLCI decreased 6.86 points or 0.4% to 1,710.72.