Benchmarks continue to trade in green in late afternoon session

Stock markets in India continued to trade on an uninspiring note in Wednesday late afternoon trades as the benchmark equity indices traded with small gains. It is turning out to be a choppy session of trade with the frontline indices trading in an extremely tight range. Inventors got some confidence with the government pitching for a ratings upgrade with global agency Fitch Ratings citing improvement in macroeconomic conditions and its commitment to fiscal consolidation. Fitch Ratings had in December affirmed India's 'BBB-' rating with a stable outlook. Some support also came 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, gains remained capped with the report that the World Bank has slashed global growth outlook for 2016 to 2.4 per cent from 2.9 per cent, citing sluggishly low commodity prices, uncertain capital flow and lukewarm demand in advanced economies. Meanwhile, shares of defence-related stocks rallied after the private reports showed India was on its way to becoming a member of the Missile Technology Control Regime (MTCR). The deal will pave way for India to procure high-end missile technology and surveillance systems by leading manufacturers.  Furthermore, logistics companies like Patel Integrated Logistics, Gati, Snowman Logistics have surged on hopes of clearance of the crucial Goods and Services Tax (GST) Bill in the upper house of the Parliament.

On the global front, Asian stock markets mixed on Wednesday after Japan revised its growth estimate for the first quarter of the year to 1.9%, while China reported exports and imports contracted again in May in a sign of weak global and domestic demand. Further, European shares fell in early trade, retreating after two straight days of gains, as a drop in Austrian bank Erste knocked back financial stocks. However, energy stocks advanced as crude oil prices rose above the $50 mark for the first time in ten months. 

Back home, stocks from Capital Goods, Power and PSU counters were supporting the markets’ uptrend, while those from information technology (IT) and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, shares of Siemens have gained after the company together with Siemens Bangladesh has won an order worth approximately Rs 113 crore from Power Grid Company of Bangladesh Limited (PGCB). Moreover Bharat Forge rose after the company’s joint venture with Alstom has received an order from NTPC.

The market breadth on BSE was positive, out of 2609 stocks traded, 1489 stocks advanced, while 966 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27057.74, up by 48.07 points or 0.18% after trading in a range of 26997.42 and 27105.41. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index up by 0.90%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.74%, Power up by 1.39%, PSU up by 0.77%, Auto up by 0.55% and Realty up by 0.38%, while IT down by 0.45%, TECK down by 0.26% and FMCG down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were BHEL up by 2.43%, Bharti Airtel up by 1.88%, ICICI Bank up by 1.85%, Larsen & Toubro up by 1.58% and Hero MotoCorp up by 1.40%. On the flip side, Asian Paints down by 1.62%, Infosys down by 1.26%, HDFC Bank down by 0.87%, Adani Ports &Special down by 0.85% and TCS down by 0.53% 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 8274.70, up by 8.25 points or 0.10% 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 BHEL up by 2.51%, Bank of Baroda up by 2.27%, HCL Tech up by 2.08%, Bharti Airtel up by 1.89% and ICICI Bank up by 1.69%. On the flip side, Zee Entertainment down by 1.98%, Kotak Mahindra Bank down by 1.76%, Asian Paints down by 1.68%, Yes Bank down by 1.52% and Adani Ports &Special down by 1.31% were the top losers.

Asian markets were trading mixed; Shanghai Composite increased marginally 0.01%, KOSPI Index gained 0.77%, Taiwan Weighted rose 0.41% and Nikkei 225 was up by 0.93%. On the flip side, Jakarta Composite decreased 0.67%, Hang Seng slipped 0.14% and FTSE Bursa Malaysia KLCI was down by 0.3%.

European markets were trading in red; UK’s FTSE 100 decreased 0.02%, France’s CAC declined by 0.46% and Germany’s DAX was down by 0.47%.