Markets trade marginally in red in early deals

Indian equity markets, after making a positive start, have turned lower and are now trading near neutral line with marginal losses in early deals. There was cautiousness in the markets on report that India’s exports dipped by 6.74 percent to $20.5 billion in April on account of sharp fall in shipments of petroleum and engineering products amid tepid global demand. further, there was some worries in the markets with Indian Meteorological Department’s statement that monsoon rains are expected to arrive on southern Kerala coast by June 7, about a week later than usual.  Besides, selling in banking stock too weighted down sentiments. Bank of Baroda, Union Bank of India, UCO Bank, Dena Bank, Allahabad Bank and Central Bank of India were trading in red after they posted huge losses in the March quarter.  However, down side remained capped with Economic think-tank NCAER projecting India's economic growth rate to improve marginally to 7.7 percent in 2016-17 against the backdrop of IMD's forecast of better monsoon rains this year.  Meanwhile, foreign investors were net buyers in equities to the tune of Rs 1,494 crore on Friday, as per provisional stock exchange data.

In the scrip specific development, Nilkamal rallied 8 per cent on the BSE after the company reported 50% year on year (YoY) growth in standalone net profit at Rs 33 crore for the quarter ended March 31, 2016 (Q4FY16).

On the global front, US markets ended lower on Friday as strong retail sales and consumer sentiment figures were overshadowed by a decline in oil prices and gloomy earnings reports from retailers.  Asian markets were trading mostly in green as strong US data offset some of the worries over softness in Chinese economic indicators. 

Back home, traders were seen piling up position in Realty, Metal, IT, TECK and Power, while selling was witnessed in Bankex, PSU, FMCG and Oil & Gas. The market breadth on BSE was positive in the ratio of 892: 589 while 83 scrips remained unchanged.

The BSE Sensex is currently trading at 25473.22, down by 16.35 points or 0.06% after trading in a range of 25421.31 and 25606.92. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index gained 0.13%.

The top gaining sectoral indices on the BSE were Realty up by 0.77%, Metal up by 0.51%, IT up by 0.50%, TECK up by 0.33% and Power up by 0.31%, while Bankex down by 0.73%, PSU down by 0.64%, FMCG down by 0.47% and Oil & Gas down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Dr. Reddys Lab up by 3.53%, Tata Motors up by 1.36%, Asian Paints up by 1.32%, BHEL up by 1.18% and Adani Ports &Special up by 0.85%. On the flip side, Bharti Airtel down by 2.55%, SBI down by 2.14%, Hindustan Unilever down by 1.36%, GAIL India down by 1.07% and ICICI Bank down by 0.84% were the top losers.

Meanwhile, after a weak industrial growth numbers, industry body, the Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest survey has hinted at a slower growth in manufacturing and stated that growth of India's manufacturing sector may decelerate during June quarter due to factors like bleak export outlook, poor demand and high cost of borrowing. FICCI said that its survey had earlier indicated revival in the manufacturing activity in fourth quarter of 2015-16, which seems to be slowing down in first quarter of this fiscal now.

The industry body in its quarterly survey has further stated that the percentage of respondents expecting higher growth in the April-June quarter has gone down to 53% compared with 60% for January-March. As per the survey, the hiring outlook too seems bleak in manufacturing in coming months as over 80% respondents were not likely to hire additional workforce in the next 3 months.

The survey has also said that the outlook for export continues it’s downward trend with the proportion of respondents expecting higher exports in the quarter falling to 36 per cent, much lower than 41 per cent in the fourth quarter of 2015-16. The survey also noted that only 38 per cent respondents reported higher order books for the April-June quarter which is less compared to the 44 per cent of previous quarter. In terms of investment, for Q1 2016-17, 75 per cent respondents as against 68 in the previous quarter reported that they don't have any plans for capacity additions for the next six months implying a slack in private sector investments in manufacturing to continue.

The survey responses which have been drawn from 308 manufacturing units from large, medium and small segments with a combined annual turnover of over Rs 4 lakh crore, gauged the expectations of manufacturers for 13 major sectors namely textiles, capital goods, metals, chemicals, cement and ceramics, electronics, auto, leather & footwear, machine tools, food, tyre, paper and textiles machinery.

The CNX Nifty is currently trading at 7812.80, down by 2.10 points or 0.03% after trading in a range of 7796.90 and 7845.65. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 3.39%, Tech Mahindra up by 3.04%, Zee Entertainment up by 2.16%, Bosch up by 1.44% and Tata Motors up by 1.44%. On the flip side, Bank Of Baroda down by 6.67%, Bharti Airtel down by 2.72%, SBI down by 2.11%, Hindustan Unilever down by 1.44% and GAIL India down by 0.95% were the top losers.

Asian markets were trading mostly in green, KOSPI Index increased 0.34 points or 0.02% to 1,967.33, Shanghai Composite increased 6.37 points or 0.23% to 2,833.48, Taiwan Weighted increased 26.76 points or 0.33% to 8,080.45, Nikkei 225 increased 219.2 points or 1.34% to 16,631.41 and Hang Seng increased 249.82 points or 1.27% to 19,969.11.

On the flip side, Jakarta Composite decreased 27.22 points or 0.57% to 4,734.50 and FTSE Bursa Malaysia KLCI decreased 12.14 points or 0.75% to 1,616.12.