Benchmarks continue to trade in green

Indian equity benchmarks continued their trade above neutral line in morning session on account of buying in frontline blue chip counters. The rupee opened higher against the US dollar after US Federal Reserve hiked interest rate by 25 bps. Foreign Portfolio Investors (FPIs) bought shares worth Rs 98.44 crore on Wednesday, as per provisional data. The street took some encouragement with a private report that private equity (PE) investments witnessed a two-fold jump in February with transactions worth $1.3 billion taking the deal tally for the first two months of this year to $2.3 billion. The report added that in February, there were 62 PE deals worth $1,330 million, while in the corresponding period last year there were 45 such transactions worth $588 million. Separately, industry body FICCI said that the government’s move to extend the facility of hiring workers on fixed term employment to all sectors will boost job creation in the near future. The government has extended the facility of hiring workers on fixed term employment to all sectors for improving the ease of doing business for players intending to hire people for completing specified projects, tasks or orders.

Meanwhile, fertilizer stocks were buzzing after the government allowed 14 urea units, which could not meet the new energy norms under the 2015 policy, to continue with the existing norms for a period of two years with token penalties. The Cabinet Committee on Economic Affairs (CCEA) approved the Fertilizer Ministry’s proposal to extend the present energy norms for two years with token penalties for 14 urea units. Mixed reaction was witnessed in telecom stocks on report that telecom operators including Bharti Airtel, Vodafone India, Idea Cellular and Reliance Jio Infocomm have been served notices for exaggerated credit claims under the goods and services tax. Separately, metal stocks were slightly under pressure as the US has decided to slap anti-dumping duty on stainless steel flanges imported from India and China after it found in its preliminary probe that both the countries provided subsidies to the exporters. The Department of Commerce has found that exporters from China and India have sold stainless steel flanges in the US at 257.11% and 18.10 to 145.25% less than fair value, respectively.

Traders were seen buying in Consumer Durables, Energy and FMCG stocks, while selling was witnessed in Power, PSU and Utilities sector stocks. In scrip specific development, Punjab National Bank (PNB) was trading in red on expectation of Rs 14,500 crore loss on account of frauds in this financial year, including contingent liabilities, following the scam by diamond traders. The amount involved in the alleged fraud involving Nirav Modi, Mehul Choksi and their companies is now pegged at almost Rs 14,000 crore. Oil marketing companies Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) were trading under pressure as crude oil prices rose on surprise weekly decline in US crude inventories which had already been bolstered by renewed geopolitical risk to global output.

On the global front, Asian markets were trading mostly in green. China gingerly raised a key short-term interest rate following the US Federal Reserve Bank’s move overnight, in a symbolic reminder that Beijing is keeping an eye on global market trends even as it cracks down on financial risks at home. President Donald Trump is poised to unveil sanctions against China for the theft of US intellectual property teeing up a second potential trade war in as many months. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,200 and 10,150 levels respectively. The market breadth on BSE was negative in the ratio of 959:1247, while 129 scrips remained unchanged.

The BSE Sensex is currently trading at 33262.56, up by 126.38 points or 0.38% after trading in a range of 33107.32 and 33281.77. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.18%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.70%, Energy up by 0.70%, FMCG up by 0.32%, Healthcare up by 0.25% and Oil & Gas up by 0.24%, while Power down by 0.42%, PSU down by 0.22%, Utilities down by 0.11%, Consumer Disc down by 0.10% and Telecom down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.56%, Tata Motors up by 1.68%, Sun Pharma up by 1.60%, Reliance Industries up by 1.36% and Tata Motors - DVR up by 1.01%.

On the flip side, Tata Steel down by 1.14%, ICICI Bank down by 0.86%, Wipro down by 0.78%, SBI down by 0.69% and Adani Ports & Special Economic Zone down by 0.66% were the top losers.

Meanwhile, global credit rating agency Moody’s Investors Services in its latest report has said that India’s steel industry is yet to introduce extra stringent emission rules and increased coal utilization poses a serious problem to the potential for carbon mitigation. In addition, it noted that the imposition of tariffs under Section 232 on steel imported into the US is likely to result in some capacity restarts. Besides, it said that the global steel industry's progress in lowering emissions and energy use continues to be limited. It pointed out that the challenge for the industry will be to lower carbon intensity at a time when demand for steel is estimated to grow 31 percent by the year 2030, from 2016 levels.  

The US-based agency mentioned that the World Steel Association reports CO2 intensity has increased by more than 10 percent, to 1.9 tonnes per tonne of steel manufactured over the past decade, while energy intensity has fallen modestly. It also noted that under the Paris agreement, India has agreed to reduce the emissions intensity of its GDP by 33-35% by 2030 from 2005 levels. Adding further, it said that potentially offsetting the benefits of China's rationalisation is the expected doubling of Indian steel production by 2030, challenging the industry's efforts to correct overcapacity and reduce carbon intensity.

According to the report, India's anticipated steel growth is due to the country's rapid urbanisation, large infrastructure needs, and an increasing preference for steel and cement over materials such as clay bricks. It also said that steel making is likely to become less carbon intensive as new mills are built and more scrap becomes available, however coal is expected to remain the dominant energy source for the sector. It noted that steel-makers across the globe are facing increasing pressure to reduce greenhouse gas emissions. It added that efforts to decarbonise the global economy will bring greater scrutiny to the energy and carbon intensity of the steel sector, which is responsible for 6-7 percent of global emissions.

The CNX Nifty is currently trading at 10185.75, up by 30.50 points or 0.30% after trading in a range of 10147.40 and 10207.85. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.51%, Tata Motors up by 1.56%, Indiabulls Housing Finance up by 1.45%, Sun Pharma up by 1.43% and Reliance Industries up by 1.29%.

On the flip side, HPCL down by 2.39%, BPCL down by 2.16%, Tata Steel down by 1.55%, Indian Oil Corporation down by 1.10% and Adani Ports & Special Economic Zone down by 1.03% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 7.31 points or 0.39% to 1,873.11, KOSPI Index increased 10.94 points or 0.44% to 2,495.91, Jakarta Composite increased 11.96 points or 0.19% to 6,324.79 and Nikkei 225 increased 166.54 points or 0.78% to 21,547.51.

On the other hand, Hang Seng decreased 182.02 points or 0.58% to 31,232.50, Taiwan Weighted decreased 31.75 points or 0.29% to 10,979.32 and Shanghai Composite decreased 25.66 points or 0.78% to 3,255.30.