Markets turn cautious, trade continues in green

Indian markets giving up some of the early gains have turned cautious in the morning deals, though the benchmarks are above the neutral line but they are lacking any major supportive cue that could led them higher. Trade remained cautious with Fitch Ratings maintaining the ‘BBB-’ sovereign rating - the lowest investment grade -on India, due to weak fiscal position and difficult business environment. It said that India is not immune to external shocks, but the country’s strong external finances make it less vulnerable than many of its peers, but weak public finances continue to constrain India’s ratings. However, it also predicted India’s gross domestic product (GDP) to grow 7.7% in both 2016-17 and 2017-18, compared with 7.1% in 2015-16. The regional markets too were trading cautiously ahead of the US Federal Reserve's monetary policy decision due later in the day, amid signs of softening inflation which eases the pressure to raise interest rates. Back home, modest support to the markets was coming with Finance Minister Arun Jaitley’s statement that the whole debate over the political cost of economic reforms has dissipated with the benefits reaching the deprived sections of society. There were lots of earnings announcements keeping the markets buzzing. FMCG major Marico was trading higher after it announced a strong set of quarterly numbers despite higher raw material costs.

In scrip specific action, Infosys was trading higher by about a percent after the company announced that it plans to hire 10,000 American workers over the next two years. As part of this initiative, Infosys will open four new Technology and Innovation Hubs across the country focusing on cutting-edge technology areas.

The BSE Sensex is currently trading at 29956.04, up by 34.86 points or 0.12% after trading in a range of 29905.19 and 30020.59. 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 0.26%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Realty up by 2.59%, IT up by 1.15%, Power up by 1.05%, TECK up by 0.86%, Utilities up by 0.84%, while FMCG down by 0.32%, Consumer Durables down by 0.30%, Bankex down by 0.27%, Healthcare down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 3.67%, Infosys up by 1.38%, TCS up by 1.31%, Coal India up by 0.80% and Dr. Reddy’s Lab up by 0.66%. On the flip side, Maruti Suzuki down by 0.77%, Lupin down by 0.73%, Adani Ports & SEZ down by 0.71%, ITC down by 0.59% and ICICI Bank down by 0.54% 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 is currently trading at 9329.95, up by 16.15 points or 0.17% after trading in a range of 9313.10 and 9346.30. There were 31 stocks advancing against 18 stocks declining on the index, while 2 stocks remained unchanged.

The top gainers on Nifty were Power Grid Corporation up by 3.54%, Ultratech Cement up by 2.73%, Indiabulls Housing Finance up by 1.62%, ACC up by 1.57% and Bharti Infratel up by 1.57%. On the flip side, Tata Power down by 1.37%, ITC down by 0.77%, Zee Entertainment down by 0.76%, Lupin down by 0.67% and Yes Bank down by 0.67% were the top losers.

Asian markets have turned cautious and were showing mixed trend, Shanghai Composite declined 10.31 points or 0.33% to 3,133.40, Jakarta Composite was down by 4.3 points or 0.08% to 5,671.50, and FTSE Bursa Malaysia KLCI was tad lower by 0.03 points to 1,778.44. On the flip side, Straits Times added 20.12 points or 0.63% to 3,231.23, and Taiwan Weighted was up by 6.02 points or 0.06% to 9,947.29.