Indian benchmarks continue to trade in red in noon session

Indian equity benchmarks continued to trade in red in late morning session as funds and retail investors engaged in reducing positions 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. Sentiments remained subdued on report that Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 1,150.45 crore on April 28, 2017. However, losses remained capped 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. Further, 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 per cent in February this year, and 9.3 per cent in March 2016.

On the global front, Asian markets were trading mostly higher on Tuesday as investors turned optimistic after an upbeat day on Wall Street. US stocks rose on Monday as big technology companies like Apple continued to rally. 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. However, weaker than expected China manufacturing data appeared to have a muted impact. Caixin China purchasing managers survey found Chinese factories slowed production and slashed jobs in April as new orders weakened. The index fell to 50.3 from 51.2 in March, on a scale of 0-100 with readings above 50 indicating expansion.

Back home, stocks from Realty, Consumer Durables and Oil & Gas counters were supporting the markets’ uptrend, while those from Telecom, Basic Materials and Utilities counters were adding to the underlying cautious undertone. In scrip specific development, Federal Bank rallied after the bank reported a strong 2400% year on year (YoY) growth in net profit at Rs 257 crore for the quarter ended March 2017 (Q4FY17). Furthermore, Kokuyo Camlin surged after the company started operations from its new factory in Patalganga in state of Maharashtra. With an investment of Rs 100 crore the Patalganga factory located at MIDC will serve as a hub for meeting demand in the Indian market as well as fulfilling the role of a manufacturing centre of products for Japan and other international markets.

The market breadth remained pessimistic, as there were 1110 shares on the gaining side against 1424 shares on the losing side, while 129 shares remained unchanged.

The BSE Sensex is currently trading at 29833.80, down by 84.60 points or 0.28% after trading in a range of 29804.12 and 30069.24. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.34%, while Small cap index down by 0.16%.

The top gaining sectoral indices on the BSE were Realty up by 1.50%, Consumer Durables up by 0.98%, Oil & Gas up by 0.60%, IT up by 0.28% and PSU up by 0.26%, while Telecom down by 1.08%, Basic Materials down by 0.88%, Utilities down by 0.72%, Power down by 0.70% and Industrials down by 0.63% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.44%, Maruti Suzuki up by 1.74%, HDFC up by 1.62%, TCS up by 0.79% and Bajaj Auto up by 0.74%. On the flip side, Reliance Industries down by 1.76%, Bharti Airtel down by 1.61%, Tata Motors down by 1.61%, Sun Pharma down by 1.37% and Lupin down by 1.18% were the top losers.

Meanwhile, Prime Minister Narendra Modi has asserted that India was never a more encouraging destination for investment than it is today. He also highlighted that at present, Indian economy is the world's fastest growing major economy. Therefore, to maintain this pace, he said that their focus is to eliminate the inefficiencies from the system.

The Prime Minister has stated that the government has launched several initiatives to reform the economy and administrative processes. He also said that the government also launched several flagship programmes like Make in India, Startup India and Digital India. Adding further, he said that the government is in the process of building a New India and their focus is on improving ease of doing business by reforming policies, processes and procedures.

In order to develop economic ties with Turkey, Modi has invited Turkish companies to invest in sectors such as rail, ports, airport, textile, auto, energy, tourism and housing. He also said that there is a huge potential and opportunity to boost bilateral engagement. He felt that this is possible through trade and FDI inflows, technology tie-ups and cooperation on various projects. He further highlighted that the bilateral trade between two countries rose to $6.4 billion in 2016 from $2.8 billion in 2008, it is still far behind the real potential.

The CNX Nifty is currently trading at 9278.70, down by 25.35 points or 0.27% after trading in a range of 9269.90 and 9352.55. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.30%, Indiabulls Housing up by 2.45%, BPCL up by 1.73%, Maruti Suzuki up by 1.69% and HDFC up by 1.61%. On the flip side, Ambuja Cement down by 3.92%, ACC down by 3.17%, Tata Motors - DVR down by 2.95%, Tata Motors down by 1.94% and Reliance Industries down by 1.82% were the top losers.

Most of the Asian markets were trading in green, FTSE Bursa Malaysia KLCI was up by 0.46%, Jakarta Composite gained 0.19%, KOSPI Index was higher by 0.59%, Taiwan Weighted added 0.7% and Nikkei 225 surged by 0.64%. On the other hand, Shanghai Composite declined by 0.27% and Hang Seng was down by 0.04%.