Benchmarks pare some early losses; still continue to trade in red

Recovering from day’s low, benchmark equity indices have gained momentum however were still trading below the neutral line as investors remained cautious ahead of the Assembly election results in four states - Tamil Nadu, Kerala, West Bengal and Assam.  Besides, fall in the crude oil prices and weakness in the Asian peers after FOMC meeting minutes raised hopes of an interest rate hike in the near future has also dampened the sentiments. The minutes of the US central bank’s April policy meeting showed that although several policymakers thought there were still risks to the economic outlook, a number of committee members believed it would be “appropriate” to lift benchmark interest rates on June 15 if economic data and labour market conditions keep strengthening and inflation approaches the 2% target. On the domestic front, sentiments got undermined with the reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 250.70 crore on May 18, 2016. Depreciation in rupee value against the US dollar too weighed down sentiments. Indian rupee plummeted 23 paise against the US dollar to 67.20 in early trade, its weakest level since March, due to appreciation of the American currency overseas amid foreign fund outflows. However, losses remained capped with global rating agency Standard and Poor’s (S&P) statement that India is likely to remain insulated from the developments in the Chinese economy provided the government carries out structural reforms to take the economy to an eight per cent growth path.

On the global front, Asian markets, with the exception of China, were lower on Thursday after minutes of the U.S. Federal Reserve's latest monetary policy meeting hinted that the central bank could soon raise interest rates. Besides, a stronger US dollar weighed on commodity prices and dragged down resources stocks. However, China’s stocks climbed for the first time in three days as steelmakers rallied after the government called on state-owned enterprises to further cut capacity to support prices. Meanwhile, Wall Street had a volatile session on Wednesday, with the S&P 500 closing flat in the wake of the Fed minutes, and the Nasdaq Composite ending 0.5 per cent higher.  Back home, stocks from FMCG, PSU and Consumer Durables counters were among the worst performers, while Metal, Realty and Auto counters battled out against all odds. In scrip specific development, shares of JK Lakshmi Cement have rallied after the company reported a around eight fold jump in its net profit of Rs 48.38 crore for the quarter ended March 31, 2016 as compared to of Rs 6.05 crore for the same quarter in the previous year. On the flip side, shares of Torrent Power have tanked after the company reported a consolidated net profit of Rs 28 crore for the quarter ended March 2016 as compared to Rs 182 crore in the same quarter of the previous year.

The market breadth on BSE was positive, out of 2120 stocks traded, 1172 stocks advanced, while 819 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25643.49, down by 61.12 points or 0.24% after trading in a range of 25555.42 and 25714.56. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index up by 0.51%.

The gaining sectoral indices on the BSE were Metal up by 1.05%, Realty up by 0.89%, Auto up by 0.46%, IT up by 0.07% while, FMCG down by 0.57%, PSU down by 0.22%, Consumer Durables down by 0.19%, TECK down by 0.10%, Power down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.46%, Lupin up by 2.02%, Tata Motors up by 1.62%, BHEL up by 1.17% and Wipro up by 0.62%. On the flip side, HDFC down by 1.75%, NTPC down by 1.61%, ITC down by 1.44%, Bharti Airtel down by 1.08% and ONGC down by 0.93% were the top losers.

Meanwhile, the government has approved three Foreign Direct Investment (FDI) proposals worth Rs 60.73 crore, based on the recommendations of the Foreign Investment Promotion Board (FIPB) in its 234th meeting, all related to the pharmaceutical sector viz. Wockhardt, Aurobindo Pharma and Advanced Enzyme Technologies. FIPB has also recommended one Axis Bank’s proposal worth Rs. 12,973.14 crore for approval of Cabinet Committee on Economic Affairs (CCEA). This is in line with the government's decision to refer all FDI proposals above Rs. 5,000 crore to the CCEA.

The highest FDI proposal which got the nod was from Advanced Enzyme Technologies. The company sought approval for investment proposed to be made by FIIs / NRIs / FPIs / QFIs / AIF/FVCIs pursuant to fresh issue of and offer for sale of 44,73,470 equity shares by certain NRIs and resident shareholders worth Rs 60 crore. The other two companies whose proposals were approved include Wockhardt, which asked for post facto approval for issuance of ESOPs to its two NRI employees, and Aurobindo Pharma which sought clarification and approval regarding grant of ESOPs to a non-resident employee.

Meanwhile, eight FDI proposals including those from Macmillan Publishers, UK, JCB International, Janalakshmi Financial Services and Fans Asia have been deferred, while a proposal by Rafique Dawood in the manufacturing sector has been rejected.

The CNX Nifty is currently trading at 7847.05, down by 23.10 points or 0.29% after trading in a range of 7826.20 and 7876.20. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.20%, Lupin up by 1.76%, Hindalco up by 1.74%, Tata Motors - DVR up by 1.60% and Tata Motors up by 1.59%. On the flip side, HDFC down by 1.88%, ITC down by 1.58%, NTPC down by 1.54%, Bharti Airtel down by 1.21% and Eicher Motors down by 1.05% were the top losers.

Asian markets were trading mostly in red, Hang Seng was down by 0.49%, Taiwan Weighted down by 0.84%, Jakarta Composite down by 0.71%, Nikkei 225 down by 0.16%, KOSPI Index down by 0.66% and FTSE Bursa Malaysia KLCI down by 0.07%. On the flip side, Shanghai Composite was up by 0.36%.