Benchmarks reverse gears; slip into negative territory

Reversing gears, Indian benchmark indices have now slipped into negative territory in absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks. The sentiments were distrustful after India’s merchandise exports extending its decline for the sixteen months in row, contracted by 5.47 percent to $22718.69 million in the month of March, as shipments of petroleum and engineering products shrunk sharply due to tepid global demand. Besides, sharp fall in the Asian stocks with China’s benchmark index Shanghai Composite losing over three percent amid drop in the oil prices also weighed on the sentiment. However, losses remained capped with Finance minister Arun Jaitley’s stamenent that India's economic growth could surge to 8.5%, especially if the monsoon is as bountiful as forecast, adding that he hopes interest rates will fall further as prices trend lower. Some support also came with report that India Inc's business optimism index remained stable for the April-June quarter of this year, thanks to a rate cut by the RBI and Government's recent policy reforms.

On the global front, Asian markets were trading mostly in red as investor attention turned to upcoming remarks from a European Central Bank official. Sentiments remained down-beat as oil prices took a fresh spill on news Kuwaiti oil workers ended a three-day strike, leaving markets suddenly directionless. Meanwhile, the US markets made a mixed closing on Tuesday, with the Dow climbing to its best closing level since last July, while the S&P 500 rising to a nearly five-month closing high. Fall in the technology pack and consumer discretionary stocks due to mixed earnings reports hurt the sentiment.

Back home, stocks from Metal, Consumer Durables and Power counters were supporting the markets’ uptrend, while those from TECK, Oil & Gas and Realty counters were adding to the underlying cautious undertone. In scrip specific development, shares of Steel Strips Wheels (SSWL) have surged after the company received exports order for supply of high speed trailer (Caravan) steel wheels for the European trailer market. Furthermore, CRISIL has rallied after the company reported 40% year on year (YoY) jump in its consolidated net profit at Rs 78.60 crore for the first quarter (Q1) ended March 31, 2016.

The market breadth on BSE was positive, out of 2189 stocks traded, 1220 stocks advanced, while 850 stocks declined on the BSE.

The BSE Sensex is currently trading at 25814.01, down by 2.35 points or 0.01% after trading in a range of 25786.56 and 25956.34. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.20%, while Small cap index up by 0.47%.

The gaining sectoral indices on the BSE were Metal up by 2.89%, Consumer Durables up by 1.58%, Power up by 1.03%, Capital Goods up by 0.62%, PSU up by 0.41% while, TECK down by 0.68%, Oil & Gas down by 0.60%, IT down by 0.56%, Realty down by 0.39%, FMCG down by 0.39% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.55%, Axis Bank up by 2.71%, Adani Ports &Special up by 1.69%, NTPC up by 1.40% and HDFC up by 1.35%. On the flip side, Mahindra & Mahindra down by 1.80%, TCS down by 1.76%, Reliance Industries down by 1.27%, Maruti Suzuki down by 1.05% and Sun Pharma Inds. down by 1.01% were the top losers.

Meanwhile, Finance Minister Arun Jaitley expressing his concern about the global economic condition has said that the global economic situation is “grim” and “worrisome” and that has prompted the nations to put up “firewalls” around their own systems to save themselves from the slowdown and grow within the limitations. He said that “Low oil prices have helped some people, it has hurt some people...Each one is trying to put firewalls around their own system so that within the limitations how best you can save yourself from the slowdown and grow within the limitations that the world has created for you.'

Jaitley stating his prognosis for the global economy for the next couple of years said that global economic situation is grim and worrisome and what will be the state of play a year or two years from now, I don't think anybody has been able for sure to hazard even a significant guess.

He further said that global situation is challenging, and added that global factors have impacted India also and they are hurting us in terms of exports in particular. Jaitley said each of the regions in the world is trying to do its best within the limitations that exist. He also said that said given the challenging global economic situation, the level of ambition in nations is such that even an one-two percent economic growth is considered 'good growth” under the circumstances.

The CNX Nifty is currently trading at 7905.70, down by 9.00 points or 0.11% after trading in a range of 7896.95 and 7950.40. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 4.28%, Hindalco up by 2.89%, Axis Bank up by 2.58%, Tech Mahindra up by 2.24% and Adani Ports &Special up by 1.51%. On the flip side, Bharti Infratel down by 2.75%, Mahindra & Mahindra down by 2.17%, TCS down by 1.70%, Idea Cellular down by 1.70% and Zee Entertainment down by 1.67% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 1.33%, Taiwan Weighted down by 1.23%, Shanghai Composite down by 3.71%, Jakarta Composite down by 0.22%, FTSE Bursa Malaysia KLCI down by 0.25% and KOSPI Index was down by 0.01%. On the flip side, Nikkei 225 was up by 0.5%.