Benchmarks end volatile session on a flat note

After remaining volatile throughout the session, Indian equity benchmarks ended the session on a flat note on Friday,  as participants remained cautious ahead of the March quarter earnings due to kick start in the coming week. Sustained capital outflows by foreign funds and volatility in the oil and commodity segments too dented sentiment. Investors remained cautious with a report that drought in southern states has affected the cultivation of major commodities like rice, cotton and spices. Production of these commodities is likely to come down sharply if the absence of summer rains prevails. However, market participant got some comfort with a private report that Indian consumers remain most optimistic, among nine nations surveyed. According to the report India topped the chart, while China and Saudi Arabia shared the second position. Some support to the market also came with global rating agency Moody’s Investors Service's latest report stating that low commodity prices and better FDI inflows have reduced India's vulnerability to external shocks which is 'credit positive' for India. It also said that India's external financing needs have diminished significantly over the last three years.

On the global front, Asian markets ended mostly in red on Friday, as investors grow concerned about the ability of central bankers to boost growth when the global economy remains sluggish. However, Hong Kong ended on a high in late buying, while Japan also recovered from a morning sell-off to close the day in positive territory after its finance minister pledged to guard against strong moves in the yen in either direction.  European equities rose in early trading on Friday as firmer prices of metals and crude oil boosted resource-related stocks. The positive sentiment in Europe came after some key comments for global central bankers and some sharp moves for world currencies.

Back home, the benchmark got off to a sedate opening tracking the dismal leads prevailing in Asian markets and overnight losses on Wall Street on concerns over global economy slowdown. Thereafter, the indices kept oscillating in a narrow range for most part of the session in the absence of any positive triggers. But some final hour profit booking followed by mild short covering ensured that the key gauges end the session on a flat note. Finally, the NSE’s 50-share broadly followed index - Nifty settled with trivial gains of eight points, above the psychological 7,550 levels, while Bombay Stock Exchange’s sensitive Index - Sensex shed eleven points and closed near the psychological 24,650 mark. Moreover, broader markets showed some resilience by outclassing their larger peers by a big margin as investors carried forward their value hunting in beaten down shares from the midcap and small cap space. On the BSE sectoral space, the IT index remained the top laggard in the space and settled with around a percent cuts. While counters like TECK and Consumer Durables too suffered severe pounding. On the flipside, Power, Realty and Capital Goods pockets managed to go home with the gains of around a percent. The market breadth remained optimistic, as there were 1723 shares on the gaining side against 816 shares on the losing side while 104 shares remained unchanged.

Finally, the BSE Sensex declined 11.58 points or 0.05% to 24673.84, while the CNX Nifty rose 8.75 points or 0.12% to 7,555.20.

The BSE Sensex touched a high and a low 24736.03 and 24608.51, respectively. The broader indices too made a positive closing; the BSE Mid cap index ended up by 0.64%, while Small cap index gained 0.63%

The top gaining sectoral indices on the BSE were Power up by 1.58%, Realty up by 1.44%, Capital Goods up by 0.97%, PSU up by 0.60% and Oil & Gas up by 0.40%, while IT down by 0.82%, TECK down by 0.66%, Consumer Durables down by 0.59% and Auto down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.95%, BHEL up by 2.64%, Lupin up by 2.27%, Mahindra & Mahindra up by 1.69% and GAIL India up by 1.57%. On the flip side, TCS down by 1.71%, Hero MotoCorp down by 1.62%, Hindustan Unilever down by 1.23%, Maruti Suzuki down by 1.22% and Infosys down by 1.21% were the top losers.

Meanwhile, Moody's Investors Service in its report has said that the India’s increasing foreign direct investment (FDI) provides stable financing of the country’s current account deficit (CAD) and is a credit positive, added that the efforts to liberalise foreign investment limits in several sectors and the 'Make in India' campaign are bearing fruit.

The rating agency further said that the rising FDI will continue to cover CAD. Net FDI inflows hit an all-time high in January 2016, at $3.0 billion, more than financing the CAD for the first time since 2004. It further said, 'We expect FDI inflows to continue to rise. It provides a stable source of financing that will help to mitigate India's external financing risks'. It hoped that smart cities, industrial corridors and investment and manufacturing zones will boost FDI inflows further.

 Moody’s, however, cautioned that weakening remittances and services exports could weigh on current account deficit. Worker remittances dropped 30% in October-December 2015 from a year ago, albeit from unusually high levels. It said that against a backdrop of subdued global economic activity in particular in the Gulf, the origin of more than half of remittances to India remittance inflows could weaken further in the coming months.

The CNX Nifty touched a high and low 7,569.35 and 7,526.70 respectively. 

The top gainers on Nifty were NTPC up by 4.15%, BHEL up by 2.98%, Tata Power up by 2.74%, Tech Mahindra up by 2.55% and YES Bank up by 1.96%. On the flip side, Hero MotoCorp down by 1.68%, TCS down by 1.57%, Infosys down by 1.21%, Bharti Infratel down by 1.18% and Hindustan Unilever down by 1.06% were the top losers.

European markets were trading in green; France’s CAC increased 24.41 points or 0.57% to 4,270.32, UK’s FTSE 100 gained 32.98 points or 0.54% to 6,169.87 and Germany’s DAX increased 63.14 points or 0.66% to 9,593.76.

Asian equity markets ended mostly lower on Friday after oil prices fell over 1 percent overnight and shares in leading European and US banks fell sharply on earnings worries. China’s shares ended lower as investors awaited a slew of March economic indicators including exports, new lending and inflation due over the next week, with some investors locking in profit from a month-long rebound that reflects expectations for a strong first quarter. However, Japanese markets stood out in a subdued trading session as the yen weakened slightly against the dollar in the wake of comments from Japan's Finance Minister and Fed Chair Janet Yellen. While Japanese Finance Minister Taro Aso warned against rapid yen rise and vowed to take action if necessary, Yellen touted the strength of the world's largest economy while speaking in New York alongside three of her predecessors - Ben Bernanke, Paul Volcker, and Alan Greenspan.