Benchmarks pare gains, trade continues marginally in green

Indian equity benchmarks have pared most of their initial gains and are trading slightly in green, as traders turned cautious ahead of macro data scheduled to be announced through the week starting with factory output numbers later in the day. Overall sentiments remained up-beat with credit rating agency Crisil in its latest report stating that revenues of companies in key sectors such as automobiles, IT services, power, steel products, telecom services, pharmaceuticals and FMCG are expected to grow 7 per cent in the July-September 2016 quarter, compared with a marginal 2 per cent in the year ago period. Traders also took some encouragement with NITI Aayog Vice-Chairman Arvind Panagariya’s statement that India can become a $ 10 trillion economy in the next 15 years, from the existing $ 2 trillion, like China did in last one and a half decade. However, gains remained capped with the World Bank in a new report stating that India, the world's largest remittance recipient in 2015, may receive a remittance of $ 65.5 billion this year, a drop of 5 percent due to weak economic growth in remittances-source countries and cyclic low oil prices. Weak global cues too capped further upsides in the domestic markets. Asian markets were exhibiting mixed trend as crude extended losses.

The BSE Sensex is currently trading at 28105.99, up by 44.85 points or 0.16% after trading in a range of 28086.04 and 28216.64. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.42%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Metal up by 1.53%, Consumer Durables up by 1.19%, Basic Materials up by 1.17%, Power up by 0.44% and Auto up by 0.42%, while Realty down by 0.54% was the lone losing index on BSE.

The top gainers on the Sensex were Tata Steel up by 2.40%, Asian Paints up by 1.36%, Cipla up by 1.03%, Maruti Suzuki up by 0.77% and ITC up by 0.71%. On the flip side, HDFC down by 0.99%, Bharti Airtel down by 0.94%, Adani Ports &Special down by 0.51%, TCS down by 0.38% and ONGC down by 0.34% were the top losers.

Meanwhile, the World Bank in its latest report on remittances has said that India, the world’s largest remittance recipient in 2015, may receive a remittance of $65.5 billion this year, a drop of 5 per cent due to weak economic growth in remittances-source countries and cyclic low oil prices. Despite the drop this year, India is likely to top the list of countries receiving remittance. In 2015, India has received about $69 billion in remittances.

As per the report, in 2016, remittance flows are expected to decline by 5 per cent in India, followed by China $65.2 billion. Pakistan positioned at number five is estimated to receive $20.3 billion. Remittance to South Asia is expected to decline by 2.3 per cent in 2016, following a 1.6 per cent decline in 2015. Remittances from the Gulf Cooperation Council (GCC) countries continued to decline due to lower oil prices and labour market ‘nationalization’ policies in Saudi Arabia. Further, it said against a backdrop of tepid global growth, remittance flows to low and middle income countries (LMICs) seem to have entered a ‘new normal’ of slow growth. In 2016, remittance flows to LMICs are projected to reach $442 billion, marking an increase of 0.8 per cent over 2015.

The World Bank said that low oil prices continued to be a factor in reduced remittance flows from Russia and the GCC countries. In addition, structural factors have also played a role in dampening remittances growth. It further said that remittances continue to be an important component of the global economy, surpassing international aid and this ‘new normal’ of weak growth in remittances could present challenges for millions of families that rely heavily on these flows and in turn, can seriously impact the economies of many countries around the world bringing on a new set of challenges to economic growth.

The CNX Nifty is currently trading at 8712.50, up by 14.90 points or 0.17% after trading in a range of 8710.65 and 8745.80. There were 34 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.47%, Tata Steel up by 2.39%, ACC up by 2.20%, Ambuja Cement up by 1.50% and Asian Paints up by 1.39%. On the flip side, HDFC down by 0.94%, BPCL down by 0.88%, Bharti Airtel down by 0.77%, Aurobindo Pharma down by 0.37% and Adani Ports &Special down by 0.34% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI increased 2.21 points or 0.13% to 1,667.59 and Shanghai Composite was up by 37.47 points or 1.25% to 3,042.18, while KOSPI Index decreased 3.45 points or 0.17% to 2,050.35 and Jakarta Composite was down by 1.69 points or 0.03% to 5,375.46.