Benchmarks recover from day's low; bounce back into positive territory

Reversing gears, Indian benchmark indices have now entered into positive territory in late morning deals on emergence of buying by funds and retail investors in select stocks. Sentiments got some support with Niti Aayog Chief Executive Officer Amitabh Kant’s statement that India needs to grow at ten percent to become ten trillion dollar economy and eliminate poverty by 2032. He also said a growth rate of ten percent would also help in creation of 175 million jobs by 2032. Investors also took some encouragement with the report that India replaced China as top destination for foreign direct investment by attracting $63 billion worth FDI projects in 2015. However, weak trend in Asian stocks coupled with depreciation in rupee value have limited the gains. Indian rupee depreciated by 15 paise to quote at 66.55 against the dollar in early trade on increased demand for the American currency from importers and banks. Further, market participants remained cautious as they looked forward to earnings show of blue-chip companies, including Reliance Industries, which is set to release its numbers after trading hours on Friday.

On the global front, most of the Asian stock markets declined on Friday as investors move to the sidelines ahead of a Federal Reserve rate review next week that is expected to hold steady, but also possibly adopt a more hawkish tone. Overnight, US stock indices slipped on Thursday after rising for the previous three sessions, as investors examined a slew of mixed earnings and crude oil prices softened. Declines in defensive sectors such as Consumer Staples, Telecom and Utilities too weighed on the main indexes. Meanwhile, oil prices also fell after scaling five-month high, pausing from a two-day rally as producers from Russia to Saudi Arabia and Iran to Libya hinted at more output, and on growing US crude stocks.

Back home, stocks from Auto, Realty and Metal counters were supporting the markets’ uptrend, while those from IT, Consumer Durables and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of IndusInd Bank have gained after the bank posted a rise of 25.25% in its net profit at Rs 620.35 crore for the quarter ended March 31, 2016 as compared to Rs 495.27 crore for the same quarter in the previous year. Furthermore, Salora International rose after the company started commercial production of LED TVs on the new Production Conveyor Line with a capacity of 10,000 units per month installed at its factory premises situated in Noida (U.P.).

The market breadth on BSE was positive, out of 2083 stocks traded, 1131 stocks advanced, while 831 stocks declined on the BSE.

The BSE Sensex is currently trading at 25898.35, up by 17.97 points or 0.07% after trading in a range of 25771.88 and 25922.02. 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 0.23%, while Small cap index up by 0.22%.

The top gaining sectoral indices on the BSE were Auto up by 0.76%, Metal up by 0.57%, Oil & Gas up by 0.41%, PSU up by 0.40% and Realty up by 0.40%, while Consumer Durables down by 0.41%, IT down by 0.24% and TECK down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.04%, Tata Steel up by 1.86%, ONGC up by 1.57%, Maruti Suzuki up by 1.49% and Tata Motors up by 0.96%. On the flip side, Asian Paints down by 1.38%, Sun Pharma down by 0.74%, HDFC down by 0.73%, Infosys down by 0.69% and BHEL down by 0.62% were the top losers.

Meanwhile, referring the spate of reforms happening in India, Finance Minister Arun Jaitley has asserted that the structural changes are underway in India, which would place the economy and the country on a stronger footing as one of the leading economies of the world. Comparing the situation of the county two years back with the current global context, he said India is doing a lot better on all fronts, especially on the key economic parameters; however, there is scope to do better.

Jaitley pointed-out that the discourse about reforms is changing in India with a larger constituency being in support rather than against. He further added that India has moved from being the state of policy paralysis to the economic bright spot of the world.

Finance Minister highlighted the initiatives taken by the Indian government which are geared towards helping the Indian economy focus on value added manufacturing which is at the heart of ‘Make in India’.  Jaitely referred in particular to the key reforms including opening-up of FDI in multiple sectors; reduction in the corporate tax rate, movement on GST, lowering of interest rates as well as process reforms with an emphasis on ease of doing business that can help decrease transaction costs.

He also mentioned about the huge resource allocation in infrastructure development particularly for national highways, roads, railway stations, airports and seaports will also help unleash economic activity in these capital intensive sectors. Moreover, Jaitley emphasized on infrastructure development in rural areas, rationalization of government support subsidies, and so forth will further help reduce stresses on the economic fundamentals in the country.

The CNX Nifty is currently trading at 7918.50, up by 6.45 points or 0.08% after trading in a range of 7873.35 and 7920.65. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.19%, Tech Mahindra up by 1.88%, Tata Steel up by 1.73%, ONGC up by 1.43% and Maruti Suzuki up by 1.42%. On the flip side, Ambuja Cement down by 1.33%, Asian Paints down by 1.31%, ACC down by 1.07%, Kotak Mahindra Bank down by 1.03% and BHEL down by 0.78% were the top losers.

Asian markets were trading mostly in red; Hang Seng was down by 0.8%, Taiwan Weighted down by 0.45%, Shanghai Composite down by 0.6%, KOSPI Index down by 0.33%, Jakarta Composite down by 0.06% and FTSE Bursa Malaysia KLCI down by 0.25%. On the other hand, Nikkei 225 was up by 0.6%.