Markets trade flat with positive bias in range-bound session

In the extremely range-bound session of trade, Indian equity benchmarks altering between positive and negative territory, were now trading flat with bit of positive bias as participants remained wary on hopes of an interest rate hike by the US Federal Reserve in the month of June. William Dudley, one of the influential members of the US Fed, believes the current sound economic fundamentals warrant a rate hike by the US Fed in June or July. However, investors got some confidence with Moody's Investors Service, forecasting Indian economy to grow 7.5 percent in the current and next year and stating that the expansion is primarily driven by rising consumption and sustained improvement in private investment was needed to maintain the momentum. The ratings agency also said India has benefited from lower commodity prices as it is a net importer of commodities and a low exposure to trade has also helped. Some support also came with Indian Meteorological Department’s statement that the monsoon has made its much-awaited entry into the Andaman & Nicobar Islands, though it also said that it may get delayed a bit due to an ongoing cyclonic activity in the Bay of Bengal.

On the global front, most of the Asian markets are trading up in the early deals on Friday, shrugging off the weak cues overnight from Wall Street and European markets. However, gains remained weak as investors in the region have grappled with concerns ranging from the Federal Reserve’s decision on monetary policy in June to continued volatility in the oil market and uncertainty around how Japanese authorities will halt the strength of the yen. The Japanese central bank chief, who has made it a habit to surprise financial markets time and again, has said he will take all measures possible to bring inflation close to 2% mark. Meanwhile, Wall Street closed down on Thursday with the Dow Jones industrial average and the S&P 500 both touching roughly two-month lows before paring losses.

Back home, stocks from Consumer Durables, FMCG and Power counters were supporting the markets’ uptrend, while those from Realty, Metal and Banking counters were adding to the underlying cautious undertone. In scrip specific development, shares of Pidilite Industries have rallied after the company reported a strong 89% year on year (YoY) jump in its consolidated net profit at Rs 153 crore for the quarter ended March 31, 2016 (Q4FY16). On the flip side, Lupin has dipped, as investors concerns about observations from the US drug regulator continue to remain an overhang for the near-term on the stock.

The market breadth on BSE was negative, out of 2109 stocks traded, 857 stocks advanced, while 1134 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25431.02, up by 31.30 points or 0.12% after trading in a range of 25379.75 and 25498.95. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mix; the BSE Mid cap index was up by 0.07%, while Small cap index down by 0.33%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.48%, FMCG up by 0.35%, Power up by 0.23%, Capital Goods up by 0.20% and Oil & Gas up by 0.13%, while Realty down by 0.20%, Metal down by 0.09%, Bankex down by 0.04% and IT down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &Special up by 2.33%, ONGC up by 1.43%, HDFC up by 1.13%, NTPC up by 1.07% and GAIL India up by 0.83%. On the flip side, Lupin down by 6.79%, ICICI Bank down by 1.29%, Cipla down by 0.75%, Bharti Airtel down by 0.55% and Maruti Suzuki down by 0.52% were the top losers.

Meanwhile, global rating agency Moody’s Investors Service has projected that Indian economy will grow 7.5 percent in the current as well as next year in real terms from 7.3 percent in 2015, on the back of private consumption growth. Moody's in its latest Global Macro Outlook 2016-17 has said that India’s overall economic growth is supported by robust consumer spending, which makes up 55% of aggregate demand in the economy and added that private spending will be supported by the implementation of the public sector salary increases, mandated by the 7th Pay Commission, and a rise in rural incomes, provided the forecast of a good monsoon is realized.

Moody's in its report has further said that the India, being a net importer of commodities, has benefited from falling prices and growth will be driven by rising consumption. But, for the growth momentum to be sustained, a continuous improvement in domestic private investment would be required. It added that sustained improvement in private investment was needed to maintain the momentum.  The report said that the monsoon this year will be crucial for inflation projections and interest rates and added that “Prevailing low headline inflation is expected to remain so, given the current forecast of a good monsoon season, and should allow the Reserve Bank of India to sustain its current accommodative stance”.

Referring to the pressure points, Moody’s had said that India has a strong GDP growth, but private investment remains weak. Modest exposure to trade in goods and a net-commodity importing status has shield the economy from external headwinds to some extent. It also pointed that investment spending fell in the last quarter of 2015, as did industrial output and capital utilisation rates remain low.

The CNX Nifty is currently trading at 7786.90, up by 3.50 points or 0.04% after trading in a range of 7773.40 and 7811.10. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 2.13%, ONGC up by 1.40%, NTPC up by 1.22%, HDFC up by 1.20% and Tata Power up by 1.10%. On the flip side, Lupin down by 6.73%, BPCL down by 1.75%, ICICI Bank down by 1.44%, Ultratech Cement down by 1.01% and Cipla down by 0.88% were the top losers.

Asian markets were trading mostly in green, KOSPI Index was up by 0.07%, FTSE Bursa Malaysia KLCI up by 0.08%, Shanghai Composite up by 0.12%, Nikkei 225 up by 0.46%, Taiwan Weighted up by 0.51% and Hang Seng was up by 0.93%. On the flip side, Jakarta Composite was down by 0.1%.