Benchmarks erase losses to trade in green

Indian equity benchmarks erased losses and started trading in green in late morning session on account of buying in frontline blue chip counters. The Indian rupee was trading marginally higher against the US dollar. Investors were taking support from India Meteorological Department’s (IMD’s) statement that India will get normal rainfall this monsoon season, somewhat allaying fears that an El Nino phenomenon may disrupt the weather system that’s the lifeline for the country’s rural economy. The June-September monsoon rainfall this year is expected to be 96% of the long-term average with a 5% error margin bringing relief to millions of farmers in the country. Separately, some support also came with reports that India has jumped one spot to 8th rank in the 2017 on Global FDI Confidence Index. Governance and regulatory issues made up 7 of the top-10 factors that investors consider when deciding on an investment destination according to the report. Traders were seen piling position in Utilities, Power and Basic Materials stocks, while selling was witnessed in IT, Bankex and TECK sector stocks. In scrip specific development, Tata Consultancy Services (TCS) was trading under pressure on reporting weak numbers. The company yesterday post market hours reported 2.51% quarter on quarter (QoQ) fall in bottom line figures at Rs 6,608 crore for the quarter ended March 31, 2017. It had posted a net profit of Rs 6,778 crore in the sequential quarter ended December 31, 2016.

On the global front, Asian shares were trading mostly in red. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,100 and 29,300 levels respectively. The market breadth on BSE was positive in the ratio of 1343:981, while 116 scrips remained unchanged.

The BSE Sensex is currently trading at 29351.15, up by 32.05 points or 0.11% after trading in a range of 29241.48 and 29373.55. 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 0.48%, while Small cap index was up by 0.48%.

The gaining sectoral indices on the BSE were Utilities up by 1.79%, Power up by 1.76%, Basic Materials up by 0.55%, Metal up by 0.52% and Industrials up by 0.43%, while IT down by 0.35%, Bankex down by 0.26%, TECK down by 0.16% and Oil & Gas down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.79%, NTPC up by 1.86%, Adani Ports & Special Economic Zone up by 1.83%, Sun Pharma up by 1.31% and Tata Steel up by 0.71%.

On the flip side, Axis Bank down by 1.08%, TCS down by 0.78%, Infosys down by 0.61%, ONGC down by 0.55% and Bajaj Auto down by 0.48% were the top losers.

Meanwhile, easing concerns over farm and economic growth in the country, the India Meteorological Department (IMD), the country's national weather forecaster, has said that India would receive 'normal' monsoon, with a fair distribution of rainfall across major parts of country. It added that seasonal monsoon rainfall is likely to be 96% of the long period average (LPA), which is at the lower end of the normal range (96-104%), with a model error of plus or minus 5 percent. Though, it did not give the probability of below normal rainfall. Besides, the last year monsoon rainfall was 97%.

IMD has assured that India is in for a normal monsoon season this year which will be good for agriculture and the economy of the country. It further added that the chances of an El Nino (which negatively affects monsoon rainfall in India) developing later in the year had fallen from over 50% to about 40% in April. Additionally, an Ocean Dipole (IOD) development over the equatorial Indian Ocean could have a positive impact on rainfall in India. Thus, there is a 38% probability of going beyond 96% and moving towards near normal (100%).

El Nino is a complex set of weather cycles that occur over the Pacific Ocean and affect climate patterns worldwide. The El Nino is characterised by warm surface temperatures over the Eastern Pacific Ocean, which results in heavy rain in South America and drier conditions over South and South East Asia and Australia. As per the IMD parameter rainfall less than 90% of the LPA is considered as deficient, between 90-96% below normal, between 96-104% normal, 104-110% above normal and above 110% of LPA is considered as excess.

Meanwhile, IMD will issue the update forecasts in early June, 2017 as a part of the second stage long range forecast of monsoon rainfall. Along with the update forecast, separate forecasts for the monthly (July and August) rainfall over the country as a whole and seasonal (June-September) rainfall over various geographical regions of India will also be issued.

The CNX Nifty is currently trading at 9113.55, up by 8.40 points or 0.09% after trading in a range of 9079.50 and 9120.50. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 3.53%, Power Grid up by 2.87%, Bharti Infratel up by 2.51%, NTPC up by 2.01% and Adani Ports & Special Economic Zone up by 1.91%.

On the flip side, Indiabulls Housing down by 1.58%, Axis Bank down by 1.34%, TCS down by 0.75%, Bosch down by 0.68% and Infosys down by 0.56% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 140.73 points or 0.59% to 23,783.81, Taiwan Weighted decreased 114.11 points or 1.17% to 9,632.45, Shanghai Composite decreased 35.92 points or 1.12% to 3,160.79, KOSPI Index decreased 7.61 points or 0.35% to 2,140.85 and FTSE Bursa Malaysia KLCI decreased 1.54 points or 0.09% to 1,739.06.

On the other hand, Nikkei 225 increased 7.05 points or 0.04% to 18,425.64 and Jakarta Composite increased 29.03 points or 0.52% to 5,606.52.