Markets pare gains after gap-up opening

After posting huge losses in the last session, Indian equity markets made gap-up opening but pared most of gains and are now trading near neutral line with modest gains in morning deals. Traders were getting encouragement with IMF chief Christine Lagarde’s statement that with strong growth and rising real income, India remains a bright spot in the global economy. Further, some support also came in with NITI Aayog member Bibek Debroy’s statement that India's growth could be around 7.8 percent in 2015-16, higher than the Finance Ministry's projection of 7.5 percent. However, foreign portfolio investors (FPIs) sold shares worth a net Rs 800.79 crore yesterday, 5 April 2016, as per provisional data released by the stock exchanges that kept pressurizing the sentiment.  

In the scrip specific development, RPG Life Sciences surged 8 per cent on the BSE after the company received GMP Certificate from Bavarian Authority, a competent authority in Germany.

On the global front, US markets ended lower on Tuesday amid mounting fears of a weakening long-term economic outlook, as the major indices posted their worst two-day decline since early-February. Asian markets were mostly trading in green despite the weak cues overnight from Wall Street and European markets amid worries about global economic growth.

Back home, traders were seen piling up position in Metal, Realty, Power, Auto and Capital Goods, while selling was witnessed in IT, Oil & Gas and TECK. The market breadth on BSE was positive in the ratio of 876: 514 while 57scrips remained unchanged.

The BSE Sensex is currently trading at 24914.69, up by 31.10 points or 0.12% after trading in a range of 24858.05 and 25000.65. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.18%, while Small cap index added 0.25%.

The top gaining sectoral indices on the BSE were Metal up by 1.12%, Realty up by 0.83%, Power up by 0.44%, Auto up by 0.43% and Capital Goods up by 0.32%, while IT down by 0.26%, Oil & Gas down by 0.20% and TECK down by 0.10% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.95%, BHEL up by 1.77%, Tata Motors up by 1.48%, Mahindra & Mahindra up by 1.06% and Lupin up by 0.93%. On the flip side, Cipla down by 0.99%, HDFC down by 0.97%, Wipro down by 0.91%, Adani Ports &Special down by 0.73% and Infosys down by 0.30% were the top losers.

Meanwhile, after cutting the repo rate by 25 basis points, Reserve Bank of India (RBI) has projected the retail inflation to decelerate modestly and remain around 5 per cent for the current fiscal with small inter-quarter variations. RBI in its first bi- monthly monetary policy report for 2016-17 has said “Assuming that the government implements the 7th Pay commission recommendations by the second quarter of 2016-17, CPI inflation could be, on average, 100-150 bps higher than the baseline in 2016-17 and its impact is expected to persist up to 24 months”.

RBI in its report said that the pay hike impact will also jack up food prices, adding that food prices could consequently increase, leading to inflation rising above the baseline by 80-100 bps in 2016-17, even assuming effective government policies relating to food stocks, procurement and minimum support prices. Furthermore, RBI said there are uncertainties surrounding this inflation path originating from recent unseasonal rains, the likely spatial and temporal distribution of monsoon, the low reservoir levels by historical averages, and the strength of the recent upturn in commodity prices, especially oil.

RBI also said there will be some offsetting downside pressures from tepid demand in the global economy, effective supply side measures by government keeping a check on food prices, and commendable commitment to fiscal consolidation. Meanwhile, RBI in its report is expected to boost GDP by around 40 bps during the current fiscal.The CNX Nifty is currently trading at 7607.75, up by 4.55 points or 0.06% after trading in a range of 7594.20 and 7638.65. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.94%, Tata Steel up by 1.57%, BHEL up by 1.46%, Idea Cellular up by 1.10% and ACC up by 1.09%. On the flip side, Bosch down by 1.23%, Cipla down by 1.09%, BPCL down by 0.92%, HDFC down by 0.90% and Wipro down by 0.89% were the top losers.

Asian markets were trading mostly in green, FTSE Bursa Malaysia KLCI increased 1.37 points or 0.08% to 1,719.45, Shanghai Composite increased 2.62 points or 0.09% to 3,055.68, KOSPI Index increased 8.18 points or 0.42% to 1,970.92, Jakarta Composite increased 16.35 points or 0.34% to 4,874.42, Nikkei 225 increased 44.31 points or 0.28% to 15,777.13 and Hang Seng increased 52.06 points or 0.26% to 20,229.06.

On the flip side, Taiwan Weighted decreased 148.31 points or 1.71% to 8,509.24.