Indian benchmarks pare early gains; end on a flat note

Indian equity benchmarks showed a volte-face on Tuesday as what started on a promising note ended as a dismal show. The optimism in domestic markets petered out completely by the end of trade and the benchmarks even drifted in to the negative territory despite getting off to a gap-up opening. Marketmen were optimistic for most part of the session, as softer-than-expected inflation data fuelled hopes of a rate cut by the central bank at its next policy review in August. Data released late on Monday showed consumer inflation easing to 2.18% in May, helped by a drop in food prices - the lowest since India started publishing an economy-wide consumer price index in 2012. Some support also came with Union Finance Minister Arun Jaitley’s statement that the Reserve Bank of India (RBI) was at a fairly advanced stage of preparing a list of borrowers from whom non-performing assets (NPAs) of public sector banks could be recovered under the Insolvency and Bankruptcy Code. The move would help beleaguered public sector banks (PSBs) recover part of their NPAs, estimated at over Rs 6 lakh crore. However, the sanguinity in local markets was under check as profit booking in IT, Metal  and Auto counters exerted downside pressure on the frontline indices and dragged near the psychological 9,600 (Nifty) and 31,100 (Sensex) levels. Investors turned jittery ahead of the US Federal Reserve's two-day policy meeting that kicks off later today where they are widely expected to hike the policy rate this time. Adding the pessimism among investors, Industrial production growth slipped to 3.1% in April compared to the same period last year, when industrial production grew by 6.5%, though it was better than last month.

On the global front, Asian markets were trading mostly higher on Tuesday, as investors took a cautiously optimistic stance ahead of a US Federal Reserve policy meeting that could provide cue on the pace of rate hikes in the months to come. The positive sentiments across the region was also supported by oil prices, which edged up in early trade, following statements that OPEC leader Saudi Arabia was making significant supply cuts to customers. However, the Japanese market edged lower following the weak cues overnight from Wall Street and a stronger yen. Meanwhile, European markets gained, with technology shares in recovery mode after a selloff in the previous session that pushed the market to its worst close in nearly a month.

Back home, after getting a firm start, the local benchmarks maintained their gain for most part of the session, however profit booking in frontline blue-chip stocks in late hours dragged the key indices below neutral lines. Finally, the Bombay Stock Exchange's Sensitive Index Sensex settled a tad above of its physiological level of 31,100 mark, while the 50 share index --Nifty-- closed just above its 9,600 mark.

The market breadth remained in favor of decliners, as there were 1330 shares on the gaining side against 1336 shares on the losing side, while 200 shares remain unchanged.

Finally, the BSE Sensex gained 7.79 points or 0.03% to 31103.49, while the CNX Nifty was down by 9.50 points or 0.10% to 9,606.90. 

The BSE Sensex touched a high and a low of 31260.77 and 31062.34, respectively and there were 15 stocks on gaining side as against 15 stocks on the losing side.
The broader indices ended in green; the BSE Mid cap index gained 0.01%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Power up by 0.78%, Realty up by 0.75%, Utilities up by 0.69%, Consumer Durables up by 0.33% and FMCG up by 0.25%, while IT down by 1.00%, TECK down by 0.86%, Metal down by 0.83%, Auto down by 0.44% and Energy down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.94%, Lupin up by 1.73%, HDFC up by 1.52%, NTPC up by 1.27% and Adani Ports & SEZ up by 0.67%. On the flip side, Tata Motors down by 1.51%, TCS down by 1.47%, Wipro down by 1.44%, Hero MotoCorp down by 0.65% and Mahindra & Mahindra down by 0.65% were the top losers.

Meanwhile, emphasizing the frugal nature of India’s economic development and advantage of demographic dividend, Union minister Jayant Sinha has said that India is poised to become the entrepreneurial engine of the world and lead in innovation & economic development on the back of these two factors. He also mentioned that the country has made optimum use of resources and is extremely energy efficient which help the county to stand out in the world.

Union minister further pointing to the statistics about the county’s growing economy said that these statistics put India on par with many leading countries in the world, including the USA and China. He said that India’s Gross Domestic Product (GDP) is currently growing at 7 to 8 per cent and if it is looked at in the context of purchasing power parity (PPP) India’s economy is worth 9.5 trillion dollars and in a decade it will contribute 11 trillion dollars to the world economy.

Sinha also said that the government’s continuous focus on minimum government and maximum governance has fostered a partnership between people and government and this will lead to broader, deeper and structured reforms.

The CNX Nifty traded in a range of 9,654.15 and 9,595.40. There were 18 stocks in green as against 33 stocks in red on the index.

The top gainers on Nifty were Power Grid up by 1.72%, Lupin up by 1.56%, NTPC up by 1.20%, Bosch up by 1.07% and HDFC up by 1.06%. On the flip side, Vedanta down by 2.77%, HCL Tech down by 2.26%, Tata Motors - DVR down by 1.84%, Tata Motors down by 1.70% and Wipro down by 1.65% were the top losers.

The European markets were trading in green; UK’s FTSE 100 increased 7.25 points or 0.1% to 7,519.12, Germany’s DAX increased 65.65 points or 0.52% to 12,756.09 and France’s CAC increased 19.17 points or 0.37% to 5,259.76.

Asian equity markets ended mostly in green on Tuesday despite weak overnight cues from Wall Street. While the yen held steady against the dollar ahead of a slew of central bank meetings this week, oil prices rose on reports that Saudi Arabia was making significant supply cuts to customers. Chinese shares eked out modest gains despite speculation that the People's Bank of China will likely raise short-term interest rates this week if the Fed raises rates as expected. However, Japanese shares closed marginally lower as a selloff in technology shares ebbed somewhat and the yen held steady ahead of US Attorney General Jeff Sessions' testimony before the Senate Intelligence Committee later today to explain his role in the Russia investigation.