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 street will be eyeing Reserve Bank of India (RBI) policy meeting scheduled on April 4-5 where the Central Bank is likely to keep benchmark rates unchanged while signposting concerns over oil prices and food inflation at its first bimonthly policy review in the new financial year. A private poll showed that the central bank may be headed into an extended pause on rate action even though the US Federal Reserve is penciling in higher borrowing costs in the world’s biggest economy toward the latter half of the year. Select power companied were buzzing in today’s trade on report that power companies are expecting better margins this summer owing to higher electricity demand on the back of rising temperatures earlier than previous years. Weathermen have predicted harsh summer this year. The Met Department has forecast warmer-than-normal temperatures till May in various parts of the country. The upsides was, however, capped on report that India’s fiscal deficit, the difference between government expenditure and revenue, has accelerated to Rs 7.15 lakh crore for the period April-February 2017-18.

Traders were seen buying in Industrial, Auto and Capital Goods stocks, while selling was witnessed in Bankex, Consumer Durables and PSU sector stocks. In scrip specific development, auto component maker Sandhar Technologies was trading in green on debuting on the bourses. The company’s Rs 512-crore IPO, which was open for subscription during March 19-21, was subscribed 6.2 times. Oil marketing companies were trading under pressure as crude oil prices surged after data showed that the number of US oil rigs declined surprisingly. Crude oil is the primary raw material and an increase in its price means that these companies will have to procure the raw material at a higher premium. This will increase their operating cost thus affecting their operating profits and operating margins.

On the global front, Asian markets were trading mixed. China’s manufacturing activity expanded at its weakest pace in four months in March as export demand faltered, prompting companies to shed staff more quickly as they looked to cut costs. The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) fell to 51.0 in March from February’s 51.6. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,000 and 10,150 levels respectively. The market breadth on BSE was positive in the ratio of 1681:502, while 84 scrips remained unchanged.

The BSE Sensex is currently trading at 33064.00, up by 95.32 points or 0.29% after trading in a range of 32997.88 and 33130.13. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index was up by 1.32%.

The top gaining sectoral indices on the BSE were Industrials up by 1.55%, Auto up by 1.51%, Capital Goods up by 1.50%, Healthcare up by 1.19% and Consumer Disc up by 0.88%, while Bankex down by 0.97%, Consumer Durables down by 0.34% and PSU down by 0.25% were the only losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 2.99%, Tata Motors up by 2.43%, Maruti Suzuki up by 2.06%, Tata Motors - DVR up by 1.82% and Adani Ports & Special Economic Zone up by 1.82%.

On the flip side, ICICI Bank down by 6.16%, Axis Bank down by 2.05%, Coal India down by 1.90%, SBI down by 1.42% and Bharti Airtel down by 1.42% were the top losers.

Meanwhile, the International Monetary Fund (IMF) has acknowledged that unemployment is one of the most serious socio-economic problems that India is facing today. However, it also exuded confidence that a number of reforms being carried out for the past few years would end up creating relatively more jobs in the country.  Noting that India has been one of the fastest growing large economies in recent times, the IMF spokesperson, Gerry Rice said that this has led to improvement in poverty reduction and improvements in standard of living.

Rice has said that their view is that recent reforms, particularly the implementation of a nationwide Goods and Services Tax (GST) regime, should help boost efficiency and productivity, and overtime will help create jobs in the formal sector. In addition, he noted that the government recently took steps towards labor market flexibility by modifying labor rules. He added that these reforms will help to increase employment, perhaps not overnight but over the medium term.

The IMF spokesperson further stated that the continuation of micro economic policies, structural forms including reforms in the labor market, will not only boosts India’s long-term growth but create jobs as well. He believed that all of this will help to spur India’s continuing catch up with advanced economies and create many jobs that are needed to employ people who are going to labor force.

The CNX Nifty is currently trading at 10151.55, up by 37.85 points or 0.37% after trading in a range of 10127.75 and 10178.55. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 3.17%, Tata Motors up by 2.65%, Lupin up by 2.32%, Adani Ports & Special Economic Zone up by 2.29% and Maruti Suzuki up by 2.13%.

On the flip side, ICICI Bank down by 6.22%, Axis Bank down by 2.24%, Indian Oil Corporation down by 2.18%, Coal India down by 1.68% and SBI down by 1.44% were the top losers.

The Asian markets were trading mixed; Shanghai Composite increased 9.59 points or 0.3% to 3,178.49, Jakarta Composite increased 37.01 points or 0.6% to 6,226.00 and Nikkei 225 increased 89.33 points or 0.42% to 21,543.63.

On the other hand, Taiwan Weighted decreased 27.57 points or 0.25% to 10,891.92, FTSE Bursa Malaysia KLCI decreased 2.88 points or 0.15% to 1,860.58 and KOSPI Index decreased 1.69 points or 0.07% to 2,444.16.

Hong Kong Stock Exchange was closed on account of National holiday.