Markets trade flat with positive bias in early noon session

Indian equity benchmarks continue to trade flat with a positive bias in early noon session. Sentiment got some support with the Commerce Minister Nirmala Sitharaman’s statement that India has received highest ever foreign direct investment (FDI) in FY 2015 - 16. FDI went up 42% since the NDA government assumed office in May 2014. She said 17 more sectors were further liberalized for FDI. While FDI dipped 16% globally, India continued to remain an attractive destination for foreign investors. Some support also come in with the India Meteorological Department’s report that Southwest monsoon has hit Kerala and seeing heavy rains for last few hours. It also said that coast of Maharashrtra may see rains in next 4 days. However, there was some cautiousness in the markets with World Bank in its Global Economic Prospects cutting India’s growth projections to 7.6-7.7 per cent for 2016-17 and 2017-18 from 7.9 per cent pegged earlier in January. Though, it said that even then, India will continue to be the fastest growing major economy in the world. Meanwhile, defence companies stocks rallied on the BSE after reports showed India was on its way to becoming a member of the Missile Technology Control Regime (MTCR).  On the other hand, shares of aviation companies took a beating as crude oil prices continued their upward surge and may result in higher ATF prices. Oil prices hit their eight-month high in overnight trade, buoyed by a plunge in the dollar and falling Nigerian oil output after a spate of attacks on its infrastructure.

On the global front, Asian markets were trading mostly in red, as investors braced for Chinese economic data and a key decision next week by benchmark provider MSCI Inc. Back home, in scrip specific development, share of Asian Granito India surged over 8% after the company won 12 lakh square meters order for its recently launched innovative vitrified tiles.

The BSE Sensex is currently trading at 27041.51, up by 31.84 points or 0.12% after trading in a range of 26997.42 and 27105.41. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index gained 0.75%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.17%, Power up by 1.15%, Auto up by 0.58%, PSU up by 0.50% and Oil & Gas up by 0.33%, while IT down by 0.40%, TECK down by 0.18% and Metal down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.14%, Bharti Airtel up by 2.13%, ICICI Bank up by 1.63%, Hero MotoCorp up by 1.38% and ONGC up by 1.29%. On the flip side, Asian Paints down by 1.25%, Infosys down by 0.92%, Coal India down by 0.81%, HDFC Bank down by 0.74% and TCS down by 0.73% were the top losers.

Meanwhile, amid sluggish corporate lending, World Bank in its Global Economic Prospects has cut India’s growth projections by up to three percentage points to 7.6-7.7 per cent for 2016-17 and 2017-18 from 7.9 per cent pegged earlier in January. Even then, India will continue to be the fastest growing major economy in the world.

World Bank in its report cautioned India against 'notable headwinds' stating that rural consumption has been hard-hit by two years of poor monsoons. It further said that despite five interest rate cuts since 2015, credit growth to the corporate sector remains sluggish because of stressed asset quality in the banking sector. It also said that private investment will still be held back by infrastructure bottlenecks, a challenging regulatory environment, and by tight credit amidst the ongoing resolution of stressed assets in the banking sector. On the global front, the Bank downgraded its 2016 global growth forecast to 2.4 per cent from the 2.9 per cent pace projected in January.

However, World Bank in its report said that growth in India picked up to 7.6 per cent in 2015-16, a 0.4 percentage point increase over that in 2014/15, driven largely by domestic demand. Further, it said that the government's planned investment in infrastructure, and the streamlining of business procedures and of the tax regime, are expected to alleviate some constraints, and crowd in private investment. It also added that the increased public investment in power generation, roads, railways and urban infrastructure is contributing to an improved business environment and reduced supply-side constraints

The CNX Nifty is currently trading at 8269.70, up by 3.25 points or 0.04% after trading in a range of 8256.45 and 8288.90. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.16%, BHEL up by 2.14%, HCL up by 1.73%, ICICI Bank up by 1.53% and Bank of Baroda up by 1.51%. On the flip side, Kotak Mahindra Bank down by 1.88%, Zee Entertainment down by 1.77%, Asian Paints down by 1.32%, Yes Bank down by 1.13% and Infosys down by 1.03% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite decreased 24.9 points or 0.5% to 4,909.09, Hang Seng decreased 24.64 points or 0.12% to 21,303.60, Shanghai Composite decreased 7.4 points or 0.25% to 2,928.64 and FTSE Bursa Malaysia KLCI decreased 6.08 points or 0.37% to 1,654.54, while KOSPI Index increased 15.45 points or 0.77% to 2,027.08, Taiwan Weighted increased 35.58 points or 0.41% to 8,715.48 and Nikkei 225 increased 155.47 points or 0.93% to 16,830.92.