Markets trade near highs of the day ahead of WPI numbers

Indian markets recovering from their initial fall have once again picked up pace and were trading near the high points of the day in early noon session. It was IT bellwether Infosys which after a good Q4 numbers and a bold guidance for the next year that was fuelling the markets higher, not only the IT pack but whole markets was taking encouragement with over 7% surge in Infosys stocks.  The company reported a better-than-expected 1.6% rise in fourth quarter dollar revenue and expects dollar revenue to grow between 11.8% and 13.8% in the current financial year. Traders have overlooked the decline in other major Asian markets, which were showing a weak trend after oil prices tumbled following collapse of talks among the world’s top oil producers. Markets are witnessing good buying interest ahead of the release of macroeconomic data of wholesale price index (WPI) Inflation for March 2016 due later today, which is expected to remain in negative territory. Though, some gains were capped by the weakness in rupee, which is down due to increased demand for the dollar from importers.

The BSE Sensex is currently trading at 25739.32, up by 112.57 points or 0.44% after trading in a range of 25634.12 and 25870.03. There were 14 stocks advancing against 16 stocks declining on the index.(12.02 PM)

The broader indices were trading in green; the BSE Mid cap index was up by 0.79%, while Small cap index gained 0.85%.

The top gaining sectoral indices on the BSE were IT up by 3.10%, TECK up by 2.80%, Consumer Durables up by 1.30%, FMCG up by 0.61%, Capital Goods up by 0.53% while, Bankex down by 0.68%, PSU down by 0.58%, Auto down by 0.41%, Oil & Gas down by 0.29% were the losing indices on BSE.

The top gainers on the Sensex were Infosys up by 6.53%, Cipla up by 2.00%, Lupin up by 1.22%, Asian Paints up by 0.74% and Sun Pharma Inds. up by 0.69%. On the flip side, ONGC down by 2.65%, SBI down by 2.11%, Adani Ports &Special down by 1.95%, ICICI Bank down by 1.87% and Hero MotoCorp down by 1.64% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest World Economic Outlook (WEO) report has said that the Indian government must stick to its fiscal consolidation path and focus on the reforms especially in the labour and infrastructure sectors. It said that fiscal consolidation should continue, underpinned by revenue reforms and further reductions in subsidies and added that sustaining strong growth over the medium term will require labour market reforms and taking apart of infrastructure bottlenecks, especially in the power sector.

The report further stated that lower commodity prices, supply side measures, and a relatively tight monetary stance have resulted in a faster-than-expected fall in inflation, making room for nominal interest rate cuts, but upside risks to inflation could necessitate a tightening of monetary policy. The report predicted that India would achieve its inflation target of 5 per cent in the first half of 2017, but has warned that an unfavourable monsoon and the effect of public sector wage increases due to the adoption of the Seventh Pay Commission’s recommendations could pose risks. The retail inflation or the Consumer Price Index (CPI) for the month March 2016 eased to a six- month low at 4.83 percent as compared to 5.18 percent in February.

The WEO report has projected that India’s current account deficit would widen sharply to $94.7 billion by 2021. The WEO data show India’s CAD, which was at $26.2 billion or 1.3 per cent of GDP in 2015, will widen to $51.8 billion (2.1 per cent of GDP) by 2017. Furthermore, IMF has retained its GDP growth forecast for India, adding that the main driver of this growth will be private consumption and investment. The report said that “In India, growth is projected to notch up to 7.5 per cent in 2016-17, as forecast in October”.

The CNX Nifty is currently trading at 7885.65, up by 35.20 points or 0.45% after trading in a range of 7842.75 and 7912.65. There were 27 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Infosys up by 6.51%, Idea Cellular up by 5.63%, Bharti Infratel up by 3.29%, HCL Tech. up by 2.44% and BPCL up by 2.24%. On the flip side, ONGC down by 2.79%, Bank Of Baroda down by 2.43%, SBI down by 2.29%, Adani Ports &Special down by 1.80% and ACC down by 1.75% were the top losers.

All the Asian markets barring Jakarta Composite which was up by modest 15.11 points or 0.31% to 4,838.68, were trading in red.

Nikkei 225 slumped by 572.08 points or 3.4% to 16,275.95, Hang Seng declined by 281.94 points or 1.32% to 21,034.53, Shanghai Composite lost 44.4 points or 1.44% to 3,033.71, Taiwan Weighted declined by 34.38 points or 0.4% to 8,666.01, FTSE Bursa Malaysia KLCI was lower by 13.61 points or 0.79% to 1,714.38 and KOSPI Index was down by 5.61 points or 0.28% to 2,009.10.