Benchmarks continue to trade in green in noon session

In an extremely range-bound session of trade, Indian equity indices altering between green and red terrain, are now trading marginally higher as investors and foreign funds are adopting a cautious approach, ahead of the fourth quarter gross domestic product (GDP) numbers to be released post market hours. Sentiments got some support with report that Southwest monsoon arriving in Kerala on the expected date this year and also advancing into some parts of the Northeast India. Also, Prime Minister Narendra Modi while speaking at the Indo-German Business Summit in Berlin has said that India has one of the most liberal FDI policy regimes in the world and more than 90 percent of foreign investment flows are under automatic route. Meanwhile, India’s former chief statistician Pronab Sen has said that the country’s GDP for 2016-17 will get 50 basis points (bps) push to 7.6 percent from the government’s estimate of 7.1 percent, due to the recent revision of the base year of the Wholesale Price Index (WPI) and the Index of Industrial Production (IIP).

On the global front, Asian markets were trading mostly lower on Wednesday as investors turned cautious amid political worries in Europe as well as weaker commodity markets. Japanese stocks dropped after weakness in US shares and a stronger yen hurt sentiments, while sliding oil prices dragged down the mining sector. However, investors got some confidence after China reported official manufacturing PMI for May at 51.2, compared with a level of 51.0 seen, and steady with 51.2 in April. The non-manufacturing PMI came in at 54.5, up from a level last at 54.0 in April. A figure above 50 denotes expansion. In commodities, oil prices remained soft, as concerns lingered about whether the extension of output cuts by OPEC and other producing countries will be enough to support prices.

Back home, stocks from Utilities, Auto and Power counters were supporting the markets’ uptrend, while those from Metal, Telecom and Energy counters were adding to the underlying cautious undertone. In scrip specific development, Natco Pharma surged after the company posted around 3-fold jump in its consolidated net profit at Rs 176.40 crore for the quarter ended March 31, 2017 as compared to Rs 63 crore for the same quarter in the previous year. Moreover, Ujaas Energy surged after the company received letter of intent (LOI) from MOIL for designing, engineering, procurement, supplying, construction, erection, testing and commissioning of 5.5 MW (AC) Solar PV Plants with tracking system on turnkey basis at Mines in the state of Madhya Pradesh.

The market breadth remained optimistic, as there were 1333 shares on the gaining side against 1041 shares on the losing side, while 141 shares remained unchanged.

The BSE Sensex is currently trading at 31195.11, up by 35.71 points or 0.11% after trading in a range of 31107.48 and 31233.68. There were 15 stocks advancing against 14 stocks declining on the index, while one stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index up by 1.01%.

The top gaining sectoral indices on the BSE were Utilities up by 1.19%, Auto up by 1.01%, Power up by 1.00%, Consumer Durables up by 0.96% and Consumer Disc up by 0.96%, while Metal down by 0.83%, Telecom down by 0.46%, Energy down by 0.23%, TECK down by 0.17% and IT down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.43%, Lupin up by 3.93%, Dr. Reddy’s Lab up by 2.16%, Power Grid up by 2.16% and GAIL India up by 1.48%. On the flip side, ONGC down by 0.76%, Tata Motors down by 0.62%, Infosys down by 0.57%, Reliance Industries down by 0.52% and Tata Steel down by 0.43% were the top losers.

Meanwhile, domestic rating agency, ICRA in its latest report has said that steel mills in India likely to benefit from lower iron ore and coking coal prices in the current year. Though, it also said that continued weakness in demand remains a worry for the steel industry with a growth of mere 4.6 percent and 2.6 percent in FY16 and FY17 respectively, due to sluggishness in key end-user industries. It added that weak demand conditions have also led to a correction in domestic hot rolled coil (HRC) prices by 7 percent in May 2017.

The ratings agency has said that prices of seaborne iron ore have corrected by 36% between February and May of 2017, pulled down by a correction in Chinese steel prices, rising inventory levels at Chinese ports, and addition of low cost fresh supplies from Australia and Brazil. It also said that during this period, domestic lump ore prices have shown a diverging trend, rising by around 4 percent. However, it added that this weakening in seaborne prices will make iron ore exports by domestic miners less remunerative, which could lead to higher domestic supplies along with a correction in domestic ore prices in the coming months.

According to the report, seaborne prices of coking coal, the other key steelmaking ingredient for which India depend on largely on Australian exports, have also witnessed a sharp decline from $314/million tonnes (MT) in mid-April 2017 to $170/MT in mid-may 2017 after the resumption of supplies from Queensland post the disruption caused by cyclone Debbie during April 2017. Besides, in the financial year 2016- 17, domestic steel production grew by 10.7 percent, buoyed by the government's trade protection measures and favourable export realisations, which led to a decline in India's steel imports, and a doubling of steel exports.

The CNX Nifty is currently trading at 9628.85, up by 4.30 points or 0.04% after trading in a range of 9609.25 and 9638.70. There were 25 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.46%, Lupin up by 3.96%, Ultratech Cement up by 3.73%, Dr. Reddy’s Lab up by 2.18% and Power Grid up by 2.03%. On the flip side, Bharti Infratel down by 2.66%, Vedanta down by 2.59%, Aurobindo Pharma down by 1.28%, Yes Bank down by 1.25% and Zee Entertainment down by 0.93% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted decreased 0.61%, Nikkei 225 shed 0.14%, Hang Seng slipped 0.03% and FTSE Bursa Malaysia KLCI was down by 0.02%.  On the flip side, KOSPI Index increased 0.13%, Shanghai Composite gained 0.3% and Jakarta Composite was up by 0.19%.