Markets trade flat with positive bias in late morning session

In the extremely range-bound session of trade, Indian benchmark indices altering between positive and negative territory, were now trading flat with bit of positive bias on buying by funds and retail investors in select stocks. However, investors in emerging markets, including India are worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies. Besides, a further depreciation in the rupee, which fell 18 paise to over 2-1/2 month low of 67.67 against the dollar, also weighed on sentiment. some weakens also came with SBI report stating that Credit growth in the country is unlikely to revive 'materially' in near term as demand conditions are still acting as a laggard. The yearly SBI Composite Index for May this year declined to 51.6, mainly due to lower credit growth. The monthly index, however, jumped to 50.3 in May from 46.5 in April due to increase in commercial vehicle and consumer durables sales. 

On the global front, Asian markets, led by Japan, were trading lower on Tuesday following the lackluster cues overnight from Wall Street amid rising expectations that the U.S. Federal Reserve will lift interest rates as early as June. In addition, lower commodity prices weighed on resources stocks.  With economic growth across emerging markets showing fresh signs of flagging - ratings agency Moody's growth in G20 emerging markets to ease to 4.2 per cent in 2016 compared with 4.4 per cent last year - investors are growing more bearish on the outlook for stocks. Back home, stocks from Power, Auto and FMCG were supporting the markets’ uptrend, while those from Capital Goods, information technology (IT) and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, shares of Novartis India have surged after the company announced that its board will meet on May 26, 2016, to consider a proposal for buyback of the company's equity shares. On the flip side, VRL Logistics has declined after the company reported 32% year-on-year (YoY) decline in net profit at Rs 13.21 crore for the quarter ended March 2016 (Q4FY16).

The market breadth on BSE was negative, out of 2044 stocks traded, 801 stocks advanced, while 1127 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25240.01, up by 9.65 points or 0.04% after trading in a range of 25181.47 and 25274.21. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.14%, while Small cap index down by 0.30%.

The top gaining sectoral indices on the BSE were Power up by 0.39%, Auto up by 0.35%, FMCG up by 0.31% and Consumer Durables up by 0.11%, while Capital Goods down by 0.74%, TECK down by 0.55%, IT down by 0.51%, Oil & Gas down by 0.48% and Realty down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.87%, Tata Motors up by 2.00%, Reliance Industries up by 1.11%, ICICI Bank up by 0.93% and ITC up by 0.73%. On the flip side, BHEL down by 1.64%, ONGC down by 1.34%, Sun Pharma down by 1.12%, SBI down by 1.09% and TCS down by 0.95% were the top losers.

Meanwhile, giving a boost to economic partnership in the post-sanctions era, India signed a 'milestone' pact with Iran to develop strategic Chabahar port in southern coast of Iran that will give India easy access to landlocked Afghanistan and Europe, bypassing its archrival Pakistan. It was the most significant of the 12 agreements the two countries signed during Indian Prime Minister Modi’s two-day visit.   India and Iran also agreed to cooperate on combating radicalism and terror.

India committed around $500 million for the important Chabahar port, which will serve as a ‘point of connectivity' between India, Afghanistan, Commonwealth of Independent States (CIS) countries and East Europe. The trilateral agreement on Transport and Transit Corridor, linked to the Chabahar port development, was signed by India, Iran and Afghanistan in the presence of Modi, Rouhani and Afghan President Ashraf Ghani.

Calling the project “an important milestone,” the Indian Prime Minister Narendra Modi said it is a “major effort to boost economic growth in the region. We are committed to take steps for early implementation of the agreement signed.” The agreements, aimed at further deepening India-Iran ties in diverse fields, covered areas of economy, trade, transportation, port development, culture, science and academic cooperation.

The other key agreement signed were a contract for development of Phase I of the Chabahar port on the southern coast of Iran by an Indian joint venture, setting up of an aluminium plant and another on laying a railway line to give India access to Afghanistan and Central Asia. Chabahar port, located in the Sistan-Balochistan Province on the energy-rich Persian Gulf nation's southern coast, lies outside the Persian Gulf and is easily accessed from India's western coast. India is also eyeing Chabahar free trade zone as a viable option for investment by its industries in urea, aluminium smelter, etc

The CNX Nifty is currently trading at 7734.75, up by 3.70 points or 0.05% after trading in a range of 7715.80 and 7744.80. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.87%, Tata Motors up by 2.11%, ACC up by 1.54%, Tata Power up by 1.34% and Reliance Industries up by 1.12%. On the flip side, BHEL down by 1.85%, ONGC down by 1.47%, Idea Cellular down by 1.32%, Bank of Baroda down by 1.29% and Sun Pharma down by 1.20% were the top losers.

Asian markets were trading in red, Nikkei 225 was down by 0.79%, Hang Seng down by 0.32%, Taiwan Weighted down by 0.30%, Shanghai Composite down by 0.77%, KOSPI Index down by 0.61%, Jakarta Composite down by 0.27% and FTSE Bursa Malaysia KLCI was down by 0.24%.