Markets trade in tight band with positive bias

Holding their earlier gains, Indian equity benchmarks continued to trade in tight band with positive bias in late afternoon session ahead of release of key macroeconomic data and start of March quarter earnings season due later this week. Investors remained optimistic with the report that India’s oil consumption fell for the third straight month in March as the demand growth in diesel, petrol and other products came to a crawl. The oil demand fell by 0.65% in March to 17,358 thousand metric tonnes (TMT). The country consumed 6,805 TMT of diesel in March, compared with 6,783 TMT in the year-ago period. Demand for petrol was 2,106 TMT as against 2,047 TMT in March 2016. Some support also came with Niti Aayog vice-chairman Arvind Panagariya’s statement that ‘new tax regime should be implemented as scheduled despite all challenges as progress will take place only after we move ahead in this regard’. Meanwhile, private electricity generation companies, Adani Power and Tata Power Company were trading in red on reports that the Supreme Court has disallows compensatory tariff to both the companies.

On the global front, European markets were trading mixed as increased geopolitical risks in the Middle East and Korean Peninsula added to existing uncertainty over the upcoming French election. Further, losses in the banks and tech stocks also weighed on the sentiments, though energy stocks provided some support. Asian markets were trading in red. Back home, in scrip specific development, HDFC Bank edged higher after the bank proposed to raise funds by issuing Perpetual Debt Instruments (part of Additional Tier I Capital), Tier II Capital Bonds and Senior Long Term Infrastructure Bonds up to a total amount of Rs 50,000 crore in the period of next twelve months through private placement mode.

The BSE Sensex is currently trading at 29767.82, up by 192.08 points or 0.65% after trading in a range of 29570.58 and 29790.11. There were 20 stocks advancing against 9 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index was up by 0.71%.

The top gaining sectoral indices on the BSE were PSU up by 1.46%, Capital Goods up by 1.42%, FMCG up by 1.27%, Realty up by 1.14% and Telecom up by 1.06%, while Metal down by 1.40%, Basic Materials down by 0.37% and Auto down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.52%, Power Grid up by 2.18%, Larsen & Toubro up by 1.57%, ICICI Bank up by 1.49% and SBI up by 1.38%. On the flip side, Adani Ports & SEZ down by 4.63%, Tata Steel down by 1.33%, Cipla down by 0.94%, Tata Motors down by 0.65% and Bajaj Auto down by 0.54% were the top losers.

Meanwhile, indicating a slight decline in manufacturing activity during the January-March quarter (Q4), industry body, the Federation of Indian Chambers of Commerce and Industry (FICCI) has said that increased cost of production due to rise in minimum wages and raw material costs along with hardening of commodity prices in the international market has impacted manufacturing competitiveness.

FICCI latest quarterly survey on 'Indian manufacturing sector' which assessed the expectations of manufacturers for Q-4 (January-March 2017) for twelve major sectors, noted that the proportion of respondents expecting higher growth during the January-March 2017 quarter has slightly fallen to 46 per cent as against 48 per cent (revised) for October-December 2016-17 and the percentage of respondents reporting fall in exports reduced to 18 per cent in the fourth quarter from 30 per cent in the previous quarter.

In terms of order books, almost 47 per cent respondents reported higher order books for the fourth quarter as compared to 48 per cent in October-December quarter of last year, which is almost the same. Besides, hiring outlook remains subdued in manufacturing in coming months as 77 per cent of the participants said that they are unlikely to hire additional workforce in next three months.

However, in terms of capacity utilisation, there was a decline and over 35% respondents in the January-March 2017 quarter as compared to 43% respondents in previous quarter reported to have higher capacity utilization. Accordingly, the future investment outlook was less optimistic, with 75% respondent in Q-4 (Jan-March 2017) as against 77% respondents in Q-3 (October-December 2016) reporting that they don’t have any plans for capacity additions for the next six months. Responses were drawn from 320 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 3.8 lakh crore.

The CNX Nifty is currently trading at 9223.95, up by 42.50 points or 0.46% after trading in a range of 9172.85 and 9237.60. There were 32 stocks advancing against 18 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were ITC up by 2.43%, Power Grid up by 1.95%, Larsen & Toubro up by 1.54%, ICICI Bank up by 1.51% and SBI up by 1.37%. On the flip side, Adani Ports & SEZ down by 5.17%, Tata Power down by 3.45%, Zee Entertainment down by 2.73%, Tata Steel down by 1.24% and Cipla down by 1.14% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 173.72 points or 0.72% to 24,088.46, Taiwan Weighted decreased 50.12 points or 0.51% to 9,832.42, Nikkei 225 decreased 50.01 points or 0.27% to 18,747.87, Jakarta Composite decreased 11.61 points or 0.21% to 5,632.69, KOSPI Index decreased 9.47 points or 0.44% to 2,123.85 and FTSE Bursa Malaysia KLCI decreased 2.25 points or 0.13% to 1,737.27. On the flip side, Shanghai Composite increased 19.57 points or 0.6% to 3,288.97.

European markets were trading mixed; Germany’s DAX decreased 10.8 points or 0.09% to 12,189.72 and France’s CAC decreased 1.22 points or 0.02% to 5,106.23. On the flip side, UK’s FTSE 100 increased 37.15 points or 0.51% to 7,386.09.