Benchmarks manage to trade above water in early deals

Indian equity benchmarks have made a positive start and are trading slightly in green in early deals on Monday. Sentiments remained up-beat with CII Business Confidence Index released during the weekend, which said that India Inc.'s perceptions about the state of the economy slid in the last quarter of 2016-17, yet industry’s confidence levels about the future have peaked to their highest level in more than six years. However, gains remained capped as traders remained on sidelines ahead of March quarter earnings, which begin later this week.

On the global front, Asian markets were trading mixed at this point of time on geopolitical concerns. The US markets ended modestly in red in the last session on reports that employment in the US rose by much less than anticipated in the month of March. Back home, stocks related to software space edged higher with Commerce Minister Nirmala Sitharaman’s statement that the government is holding talks with the US administration over the H1-B visa issue and also working with the industries. She said that the government is in close touch with those industries which have a stake and which need to be assisted during this transitional phase. The market breadth indicating the overall health of the market was strong, with 1,490 shares gaining and 613 shares declining, while a total of 80 shares were unchanged.

The BSE Sensex is currently trading at 29746.00, up by 39.39 points or 0.13% after trading in a range of 29676.80 and 29831.32. There were 17 stocks advancing against 13 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 0.51%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.23%, Energy up by 1.06%, PSU up by 0.59%, Industrials up by 0.52% and Basic Materials up by 0.46%, while Realty declined 0.66% and Consumer Durables was down by 0.19% were the only losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.16%, Reliance Industries up by 0.74%, Axis Bank up by 0.67%, TCS up by 0.55% and Tata Motors was up by 0.54%. On the flip side, HDFC down by 0.84%, Asian Paints down by 0.73%, Lupin down by 0.42%, Hindustan Unilever down by 0.34% and Mahindra & Mahindra was down by 0.30% were the top losers.

Meanwhile, Indian companies look optimistic about the economy as the Confederation of Indian Industry (CII) Business Confidence Index (BCI) for the January-March quarter has surged to a record high of 64.1 as against 56.5 recorded in the previous quarter. There has been a sharp rise in the index after it remained subdued in the last few quarters.

The industry body has said that a sharp uptick in business outlook, at the onset of 2017, underpins the hope that the reform initiatives of the government would unravel a host of investment opportunities for firms, going forward. It further said that the significant rise in the index this quarter could be attributed to the distinct improvement in the ‘expectations index’ even as there is a marginal uptick in the ‘current situation index’, indicating that business sentiment is strong and firms are particularly upbeat about activity in their sectors in the future.

According to the survey report, business conditions are expected to improve as over 63 percent of the firms expect an increase in sales during January-March 2017, as compared to only 39 percent who experienced the same in October-December 2016. Moreover, 60 percent of the respondents expect an increase in new orders during January- March 2017, as compared to 41 percent who witnessed the same in the preceding quarter. Majority of the firms also expect no change in their domestic and international investment plans during the last quarter of the previous fiscal ended March 31.

More than half of the firms expect to maintain status quo on their plans about investing in the domestic economy during the quarter. Also, firms are keeping investment plans on hold despite the expectation of an improvement in sales and new orders in the January-March quarter owing to the existing excess capacity in the economy. However, on the question of their concerns in the coming six months, a majority of the companies listed low domestic demand followed by fragile global economic recovery and rise in commodity prices as the key issues. The findings are a part of CII’s 98th edition of quarterly Business Outlook Survey, which was based on around 200 responses from large, medium, small and micro firms, covering all regions of the country.

The CNX Nifty is currently trading at 9206.85, up by 8.55 points or 0.09% after trading in a range of 9191.10 and 9225.65. There were 30 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.77%, Indian Oil Corporation up by 2.53%, Bharti Infratel up by 2.00%, Grasim Industries up by 1.69% and Coal India was up by 1.09%. On the flip side, Indiabulls Housing down by 1.35%, Asian Paints down by 1.06%, HDFC down by 0.87%, Hindustan Unilever down by 0.62% and Lupin was down by 0.46% were the top losers.

Asian markets were trading mixed; Jakarta Composite rose 1.35 points or 0.02% to 5,654.84, Taiwan Weighted gained 5.56 points or 0.06% to 9,878.93, Hang Seng added 6.3 points or 0.03% to 24,273.60 and Nikkei 225 was up by 115.74 points or 0.62% to 18,780.37.

On the flip side, KOSPI Index decreased 19.04 points or 0.88% to 2,132.69, Shanghai Composite shed 9.76 points or 0.3% to 3,276.86 and FTSE Bursa Malaysia KLCI was down by 2.43 points or 0.14% to 1,739.29.