Benchmarks trade marginally in red in early deals

Indian equity markets have made a weak opening and are currently trading with marginal losses, as traders booked profit at higher levels in early deals. Further, caution prevailed in the markets as participants were keenly watching out for the European Central Bank (ECB) and Organization of the Petroleum Exporting Countries (OPEC) meet scheduled today. However, losses remained capped on report that foreign portfolio investors (FPIs) bought shares worth a net Rs 259.90 crore on June 1, 2016, as per provisional data released by the stock exchanges. Further, rupee opened higher against the dollar on Thursday and was trading at 67.36, up 9 paise at the Interbank Foreign Exchange, capping some losses. Besides, some support also came in with Organisation for Economic Cooperation and Development (OECD) in its Global Economic Outlook stating that India's growth rate is expected to hover near 7.5% this year as well as next even as many emerging market economies continue to lose momentum. In the scrip specific development, TVS Motor Company was trading higher on the BSE after the company reported 11% year on year increase in total sales at 243,783 units in May 2016 against sale of 220,079 units in May 2015.

On the global front, US markets ended marginally higher as oil prices recovered from the day's worst levels. Further, investors processed data on global manufacturing, US auto sales and inflation for clues about the Federal Reserve's next interest rate hike. Asian markets were trading mostly in green following the modest gains overnight on Wall Street. However, Japanese market was trading lower on the back of a strengthening Yen.

Back home, traders were seen piling up position in IT, TECK, Auto, Metal and Consumer Durables, while selling was witnessed in Capital Goods, Oil & Gas, Banking, FMCG and Power. The market breadth on BSE was negative in the ratio of 701:781, while 80 scrips remained unchanged.

The BSE Sensex is currently trading at 26657.89, down by 56.04 points or 0.21% after trading in a range of 26655.77 and 26745.20. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.03%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were IT up by 0.82%, TECK up by 0.66%, Auto up by 0.58%, Metal up by 0.36% and Consumer Durables up by 0.09%, while Capital Goods down by 0.53%, Oil & Gas down by 0.46%, Bankex down by 0.20%, FMCG down by 0.17% and Power down by 0.15% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.36%, Infosys up by 1.23%, Coal India up by 1.01%, Mahindra & Mahindra up by 0.76% and Wipro up by 0.68%. On the flip side, Bajaj Auto down by 1.43%, Sun Pharma Inds. down by 0.98%, ITC down by 0.87%, Axis Bank down by 0.85% and Larsen & Toubro down by 0.80% were the top losers.

Meanwhile, after slew of good economic data, the government has got another reason to cheer, the Paris based Organisation for Economic Cooperation and Development (OECD) in its Global Economic Outlook has said that India's growth rate is expected to hover near 7.5% this year as well as next even as many emerging market economies continue to lose momentum.

The OECD projections incorporated an increase in public sector wages, pensions and efforts to improve tax compliance. But it also cautioned that non-performing loans in the banking sector have been rising in several countries, including India where growth has been comparatively robust. It said they add to “moral hazard” and if maintained for a long period would prevent resource reallocation from non-viable firms, with negative effects on productivity and employment growth.

The organisation recommended Indian authorities to continue to reduce budget deficit via improved tax mobilisation, while shifting more spending towards physical and social infrastructure. The OECD said “almost all countries have room to reallocate spending and taxation towards items that offer more support to growth” like investments in infrastucture as well as education.

The organization is increasingly pessimistic about the global economy and expects the combined economy of its member nations, which does not include India or China, to grow 1.8 percent this year instead of its earlier forecast of 2.2 percent and at 2.1 percent instead of 2.3 percent in 2017. Apart from longer-term headwinds like soft demand, weak investment sentiment and sluggish trade, the OECD has also pointed Britain’s potential exit from the European Union. The OECD said countries have relied too much on central banks to stimulate demand and should instead look to strengthen public investment and make their economies more competitive through structural reforms.

The CNX Nifty is currently trading at 8174.50, down by 5.45 points or 0.07% after trading in a range of 8154.75 and 8185.85. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.93%, Tech Mahindra up by 1.72%, Infosys up by 1.09%, Tata Motors - DVR up by 0.92% and Mahindra & Mahindra up by 0.65%. On the flip side, Bajaj Auto down by 1.49%, Bharti Infratel down by 1.16%, ITC down by 1.04%, Asian Paints down by 0.99% and Lupin down by 0.89% were the top losers.

Asian markets were trading mostly in green, KOSPI Index increased 2.26 points or 0.11% to 1,984.98, FTSE Bursa Malaysia KLCI increased 2.58 points or 0.16% to 1,629.08, Jakarta Composite increased 5.84 points or 0.12% to 4,845.51, Hang Seng increased 12.39 points or 0.06% to 20,773.37

On the flip side, Nikkei 225 decreased 353.56 points or 2.09% to 16,602.17, Taiwan Weighted decreased 31.01 points or 0.36% to 8,566.15 and Shanghai Composite decreased 6.34 points or 0.22% to 2,907.17.