Markets recover most of the previous session losses with a positive opening

With a positive opening Indian equity markets recovered most of their previous session losses and are now trading up by over quarter a percent. The session was also proving positive for broader indices, which are trading with gains in the range of 0.10-0.20%. Traders were getting encouragement on report that the monsoon is expected to hit Kerala by May-end or early June and that a formal forecast may be issued by May 15. Further, buying in Telecom stocks too aided the sentiment, as Telecom Minister Ravi Shankar Prasad said that Telecom sector attracted over $4 billion worth foreign direct investments in nearly two years since April 2014. FDI equity inflow in telecom sector from April 2014 to February 2016, has reached $4,091 million which was more than double that came in the corresponding period of previous two years ie. April 2012 to March 2014 ($1,611 million). However upside remained capped with a private report stating that government must focus on structural reforms to put the country on the path of faster economic growth, as the ‘several reforms’ implemented so far may not be enough in a fast-changing world.  Besides, weakness in Indian rupee also prevented markets to go further higher. The rupee depreciated by 6 paise to 66.61 against the US currency in early trade today due to sustained demand for the dollar from importers. 

In the scrip specific development, V-Guard Industries rallied 14 per cent on the BSE after the company's net profit more than doubled to Rs 42 crore for the quarter ended March 31, 2016 (Q4FY16), on back of strong revenue growth.

On the global front, US markets ended lower on Wednesday as tepid US economic data and lackluster corporate results added to concerns about the health of the global economy. Asian markets were trading in red following the weak cues overnight from Wall Street. Sentiments also remained weak on report that the Nikkei Hong Kong Purchasing Managers Index fell to an eight-month low of 45.3 in April from 45.5 in March, suggesting a further deterioration in Hong Kong's private sector amid China's economic slowdown.

Back home, traders were seep piling up position in Realty, Auto, Power, Banking and Capital Goods, while selling was witnessed in Consumer Durables, TECK, Oil & Gas and IT. The market breadth on BSE was positive in the ratio of 882:533, while 64 scrips remained unchanged.

The BSE Sensex is currently trading at 25199.99, up by 98.26 points or 0.39% after trading in a range of 25166.55 and 25236.59. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index gained 0.16%.

The top gaining sectoral indices on the BSE were Realty up by 1.42%, Auto up by 0.34%, Power up by 0.26%, Bankex up by 0.25% and Capital Goods up by 0.21%, while Consumer Durables down by 0.92%, TECK down by 0.11%, Oil & Gas down by 0.08% and IT down by 0.07% were the losing indices on BSE.The top gainers on the Sensex were Sun Pharma Inds. up by 2.27%, Tata Motors up by 1.22%, ONGC up by 1.14%, HDFC up by 1.06% and Lupin up by 0.98%. On the flip side, Adani Ports &Special down by 1.90%, Mahindra & Mahindra down by 0.41%, Tata Steel down by 0.38%, Wipro down by 0.33% and Axis Bank down by 0.18% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest report has pointed that India and China are the two among Asia Pacific countries, where the financial inequality is highest, despite the two being among the fastest growing economies. The fund further said that China and India have grown rapidly and reduced poverty sharply; however this impressive economic performance has been accompanied by increasing levels of inequality.

The report talking about India said that differences between rural and urban areas have increased, and have been accompanied by rising intra-urban inequality. Though, the report also said that inter provincial inequality is lower in India than in China, and rising inequality in India has been found to be primarily an urban phenomenon.

The report identified many factors as key drivers of the inequality between rural and urban areas in China and India. In China, rapid industrialisation in particular regions and the concentration of foreign direct investment in coastal areas have led to substantial inequalities between coastal and interior regions. Other factors also include low educational attainment and low returns to education in rural areas.

IMF though also noted that the two countries have introduced a number of policies to tackle the rising inequality. In India, the government introduced the Mahatma Gandhi National Rural Employment Guarantee Act to support rural livelihoods by providing at least 100 days of employment. Programs to improve education include the National Education Scheme and Midday Meal Scheme. The Fund also lauded the JAM (Jan Dhan-Aadhaar-Mobile) initiative and said that 'the JAM trinity initiative helped India in making substantial advances in financial inclusion.

The CNX Nifty is currently trading at 7727.75, up by 21.20 points or 0.28% after trading in a range of 7716.15 and 7741.45. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 2.00%, Tata Motors up by 1.30%, Bank Of Baroda up by 1.28%, Lupin up by 1.22% and HDFC up by 1.18%. On the flip side, Adani Ports &Special down by 2.38%, Zee Entertainment down by 1.69%, Ultratech Cement down by 1.31%, ACC down by 1.13% and Ambuja Cement down by 0.88% were the top losers.

Asian markets were trading in red, Hang Seng decreased 92.72 points or 0.45% to 20,433.11, Taiwan Weighted decreased 53.06 points or 0.65% to 8,132.41, FTSE Bursa Malaysia KLCI decreased 12.22 points or 0.74% to 1,645.36 and Shanghai Composite decreased 8.22 points or 0.27% to 2,983.06.