Choppiness continues on Dalal Street in noon deals

Indian equity benchmarks continued to trade choppy in afternoon session, as sentiment remained weak in the absence of any positive trigger amid sustained capital outflows by foreign funds. Muted expectation of fourth quarter earnings weighed on the domestic sentiment. Traders also remained cautious with the Reserve Bank of India (RBI) in a report stating that India`s power reforms are likely to put pressure on state governments' budgets, potentially forcing them to cut spending needed to support economic growth. However, some support 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.

On the global front, Asian shares extended losses to three-week lows on Friday, while the yen soared to a 17-month high against the dollar as investors bet Japan would be hard pressed to drive down its currency in the face of widespread foreign opposition. Closer home, Pharma shares were among the top gainers amid renewed buying interest. Banking stocks remained on buyers’ radar after Reserve Bank of India (RBI) issued instructions on trading in priority sector lending certificates. However, Telecom stocks remained under pressure despite Union cabinet deciding to allow telecom companies to use spectrum allocated to them without auction to offer new services to consumers at a provisional price recommended by the telecom regulator.

The broader indice, however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1,758 shares on the gaining side against 899 shares on the losing side while 120 shares remain unchanged.

The BSE Sensex is currently trading at 24683.21, down by 2.21 points or 0.01% after trading in a range of 24608.51 and 24736.03. There were 15 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index up by 0.47%.

The top gaining sectoral indices on the BSE were Basic Materials up by 1.10%, Power up by 0.75%, Capital Goods up by 0.66%, Metal up by 0.45% and PSU up by 0.40%, while Telecom down by 1.10%, Consumer Durables down by 0.66%, TECK down by 0.51%, IT down by 0.44% and Auto down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 2.19%, NTPC up by 2.09%, BHEL up by 1.13%, Dr. Reddys Lab up by 1.01% and ICICI Bank up by 0.86%. On the flip side, Hero MotoCorp down by 2.40%, Bharti Airtel down by 1.45%, Hindustan Unilever down by 1.27%, TCS down by 1.06% and Axis Bank down by 1.02% 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 is currently trading at 7553.65, up by 7.20 points or 0.10% after trading in a range of 7526.70 and 7569.35. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.21%, Lupin up by 2.00%, ACC up by 1.94%, Tech Mahindra up by 1.68% and Tata Power up by 1.56%. On the flip side, Hero MotoCorp down by 2.47%, Idea Cellular down by 1.46%, Bharti Airtel down by 1.28%, Hindustan Unilever down by 1.18% and TCS down by 1.15% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 97.78 points or 0.48% to 20,168.27, Shanghai Composite declined 38.43 points or 1.28% to 2,969.99, Jakarta Composite shed 35.97 points or 0.74% to 4,831.32, FTSE Bursa Malaysia KLCI dipped 6.67 points or 0.39% to 1,717.62 and KOSPI Index was down by 1.84 points or 0.09% to 1,972.05.

On the flip side, Taiwan Weighted increased 51.25 points or 0.6% to 8,541.50 and Nikkei 225 was up by 71.68 points or 0.46% to 15,821.52.