Indian markets settle with paltry gain

After trading on a feeble note for most part of the session, Indian equity indices managed to negotiate a close in the green terrain, breaking the two-session downtrend, as investors showed renewed buying interests in Realty, Consumer Durables and Oil & Gas counters. Sentiments remained muted with the UN report indicating that India is expected to clock 7.1% growth this year before edging up to 7.5% in 2018, and warned that the country faces heightened risks related to the concentration of bad loans in the public sector banks. Inflation is projected to reach 5.3% to 5.5% in 2017 and 2018. The report also warned that the rise in protectionism put economic growth in Asia Pacific at risk and urged countries in the region to improve governance and fiscal management to bolster development. Further, investors' confidence improved on the report that Factory output increased for the fourth straight month in April 2017. The Nikkei India Manufacturing Purchasing Managers' Index (PMI) - compiled by Nikkei and research firm Markit - remained at 52.5 in April, same as that recorded in March. A reading above 50 on the index denotes expansion, while that less than 50 indicates contraction. Stronger growth in new orders and improving demand conditions were some of the key factors behind the expansion in manufacturing activity in April. Furthermore, some support also came with Prime Minister Narendra Modi's assertion that India was never a more promising investment destination than it is today. He said that today, Indian economy is the fastest growing major economy in the world. In addition to maintaining this pace, our focus is to remove the inefficiencies from the system. Meanwhile, closing the fiscal year on a high, the index of eight core industries rose by 5% in March, a three-month high, led by double-digit growth in steel and coal sectors. The core industries grew by a mere 1% in February this year, and 9.3% in March 2016.

On the global front, Asian markets ended mostly higher on Tuesday, helped by rising optimism on the technology industry and easing concerns over North Korea, while the dollar edged up to one-month high versus the yen. Further, the US Federal Reserve begins its two-day monetary policy meeting later today, with many expecting the US central bank to leave interest rates unchanged. However, weaker than expected China manufacturing data appeared to have a muted impact. China's factory sector lost momentum in April, with growth slowing to its weakest pace in seven months as domestic and export demand faltered and commodity prices fell. The Caixin/Markit Manufacturing Purchasing Managers' index (PMI) fell to 50.3 in April, missing economist forecasts' of 51.0 and a significant decline from March's 51.2. Meanwhile, Wall Street climbed on Monday, boosted by gains in Apple and other big tech stocks that more than offset weak economic data and pushed the Nasdaq Composite to another record high. Investors bought stocks and sold bonds and gold after Congress agreed to a deal that will keep the government operating for the rest of the fiscal year, averting a shutdown, so they bought riskier stocks and sold government bonds, gold, and high-dividend stocks.

Back home, after getting a strong start, the local benchmarks slipped into red in late morning session on profit booking in frontline blue-chip stocks ahead of a Federal Reserve meeting this week, a U.S. jobs report on Friday and the final round of the French presidential election on Sunday. The frontline indices kept losing steam thereafter and even drifted to the lowest point in the session in mid morning trades. But the indices managed to pare most of the losses in late afternoon trades on the report that Uttar Pradesh cabinet approved the GST Bill ahead of introducing it in the forthcoming assembly session so that the new tax regime could be rolled out from July 1, 2017. In another cabinet decision, all manual tendering will be done away with in Uttar Pradesh within the next three months and it would be replaced by e-tendering and e-procurement process. Finally, the NSE's 50-share broadly followed index Nifty, added single digit gains to settle above the crucial 9,300 support level, while Bombay Stock Exchange's Sensitive Index or Sensex gained around three points and ended below the psychological 30,000 mark. Moreover, broader markets showed some resilience by outclassing their larger peers by a big margin. On the BSE sectoral space, Realty counter remained the top gainer in the space with over two percent gains followed by the high beta- Consumer Durables index, which ended with over a percent gains. On the other hand, the Telecom index slipped by over a percent followed by Healthcare, Metal and Capital Goods counters, which too settled with over half a percent losses.

The market breadth remained pessimistic, as there were 1355 shares on the gaining side against 1518 shares on the losing side, while 177 shares remained unchanged.

Finally, the BSE Sensex gained 2.78 points or 0.01% to 29921.18, while the CNX Nifty was up by 9.75 points or 0.10% to 9,313.80. 

The BSE Sensex touched a high and a low of 30069.24 and 29804.12, respectively and there were 10 stocks on gainers side as against 20 stocks on the losers side on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.38%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Realty up by 1.99%, Consumer Durables up by 1.21%, Oil & Gas up by 1.05%, Consumer Disc up by 0.82% and PSU up by 0.64%, while Telecom down by 1.22%, Healthcare down by 0.78%, Metal down by 0.57%, Capital Goods down by 0.56% and Power down by 0.50% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 2.79%, ONGC up by 2.66%, Maruti Suzuki up by 2.52%, Hero MotoCorp up by 1.70% and Bajaj Auto up by 1.45%. On the flip side, Lupin down by 2.38%, Bharti Airtel down by 2.09%, Reliance Industries down by 1.59%, NTPC down by 1.40% and Sun Pharma Industries down by 1.33% were the top losers.

Meanwhile, aided by stronger growth of new orders and lengthening delivery times, India’s manufacturing sector growth improved for the fourth consecutive month in April. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI)-a composite single-figure indicator of manufacturing performance- remained at 52.5 in April to match March’s reading.

The survey results showed that new export orders rose for the third month in a row, but the rate of expansion eased from March and was slight overall. Further, even though growth softened slightly since the preceding survey period, output expansion witnessed solid growth. The survey also found that stocks of finished goods dropped for the twenty-second month running during April. However, the rate of depletion slowed to the weakest in the year-to-date. It further noted that stocks of purchases continued to rise, albeit growth eased from the preceding survey period.

On inflation front, purchasing costs increased for the nineteenth straight month in April on the back of higher prices in metals, chemicals and plastics. The rate of cost inflation gathered pace since March and was above the average recorded over the current sequence of rises. Moreover, Less than 5 per cent of manufacturers raised their output prices in April, while almost 93 per cent signalled no change. Nonetheless, the pace of employment growth remained slight overall.

The CNX Nifty traded in a range of 9,352.55 and 9,269.90. There were 24 stocks in green as against 27 stocks in red on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 5.71%, HDFC up by 3.15%, BPCL up by 3.07%, ONGC up by 2.81% and Maruti Suzuki up by 2.53%. On the flip side, Lupin down by 2.57%, Tata Motors - DVR down by 2.48%, ACC down by 2.12%, Bharti Airtel down by 2.11% and Tata Motors down by 1.83% were the top losers.

European markets were trading in green; Germany’s DAX rose 12.24 points or 0.1% to 12,450.25, France’s CAC increased 17.95 points or 0.34% to 5,285.28 and UK’s FTSE 100 was up by 36.34 points or 0.5% to 7,240.28.

Asian equity markets ended mostly in green on Tuesday as the yen weakened for a fourth straight session and US Treasury Secretary Steven Mnuchin said the White House is making steady progress on its tax reform plan. Also, worries over North Korea eased somewhat after US President Donald Trump said that he would be ‘honored’ to meet North Korean leader Kim Jong Un under the right circumstances to defuse tensions over the country's nuclear program. Meanwhile, the US Federal Reserve begins its two-day monetary policy meeting later today, with many expecting the US central bank to leave interest rates unchanged. However, traders will examine the accompanying statement for clues about future rate hikes. Japanese shares ended higher as the yen extended its losing trend and a survey showed Japan's services sector continued to expand in April, although at a slower pace. Though, Chinese shares ended lower after a private survey showed China's manufacturing activity expanded at a slower pace in April on weak output and new orders. The Caixin manufacturing PMI hit a seven-month low of 50.3 in the month.