Benchmarks trim gains in morning session

Indian equity benchmarks trimmed their initial gains and continued to trade in green territory in morning session on account of buying in frontline blue chip counters. The market continued to hold its gains following positive lead from global stocks after China’s comments on free trade. The rupee opened higher against the US dollar on account of selling of American currency by banks and exporters. According to the provisional exchange data, foreign investors pulled out Rs 1,300 crore from stocks in the previous trading session. The sentiments were upbeat after Commerce and Industry Minister Suresh Prabhu expressed hopes that India can benefit from the ongoing challenges in global trade provided it makes the right moves. His statement came in the wake of steadily escalating tensions between the world’s two largest economies -- China and US. The Minister added that the Indian government is taking steps to boost exports, industrial growth and manufacturing activities. Separately, Prime Minister Narendra Modi yesterday gave a 100-day deadline to the heads of central public sector enterprises (CPSEs) to come out with a roadmap with ‘measurable targets’ for strengthening state-owned companies and promoting development activities. Modi also suggested that their CSR spend should be focused largely on one specific theme each year.

Meanwhile, sugar stocks were buzzing on reports that the government is likely to provide financial support to cane farmers for produce sold to sugar mills. Prime Minister Narendra Modi’s administration is likely to approve a proposal to pay around Rs 55 ($0.84) for every tonne of cane sold to the mills. Mixed reactions were seen in cement companies on ICRA’s report that the cement industry is likely to register a flat growth of around 5% in the current financial year despite a pick-up in demand in recent months and healthy outlook ahead. The report added that the profitability margins and debt metrics of the cement companies may also come under pressure in the coming quarters on higher petcoke, coal and diesel prices.

Investors took note that in a major boost to infrastructure development in the north-east, NITI Aayog will soon hold a high-level meeting to chalk out strategies for improving road, rail and air connectivity in the regions besides focusing on improving hydel power production and organics farming in the states. Separately, unseasonal rainfall and hailstorms in north India over the weekend, along with a forecast of more showers and storms in the days ahead, have put at risk the rabi crop, especially wheat, mustard and mangoes, raising fears of increasing rural distress.

Traders were seen buying in Metal, Capital Goods and Bankex stocks, while selling was witnessed in Telecom, Oil & Gas and Auto sector stocks. In scrip specific development, Alembic is trading in green as company is going to buy-back its equity shares. The buyback offer will open on April 16, 2018 and will close on April 27, 2018. Wipro was trading in red after the company said that its fourth-quarter revenue and profitability would be hit by the insolvency proceedings of one of its telecom clients in India, making this the second quarter in a row in which a troubled client has hurt the company’s results.

On the global front, Asian markets were trading in green. Chinese President Xi Jinping promised to open the country’s economy further and lower import tariffs on products including cars, in a speech seen as conciliatory amid rising trade tensions between China and the United States. Back home, the BSE Sensex and NSE Nifty were trading above the psychological 33,800 and 10,400 levels, respectively. The market breadth on BSE was negative in the ratio of 1101:1142, while 87 scrips remained unchanged.

The BSE Sensex is currently trading at 33873.62, up by 85.08 points or 0.25% after trading in a range of 33866.98 and 33949.98. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.12%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Metal up by 1.42%, Capital Goods up by 0.98%, Bankex up by 0.76%, Basic Materials up by 0.63%, Industrials up by 0.53%, while Telecom down by 0.63%, Oil & Gas down by 0.43%, Auto down by 0.28%, Consumer Disc down by 0.16% and FMCG down by 0.04% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.40%, Adani Ports & Special Economic Zone up by 2.98%, ICICI Bank up by 2.62%, Tata Steel up by 1.44% and Larsen & Toubro up by 1.43%.

On the flip side, Mahindra & Mahindra down by 1.67%, Bharti Airtel down by 1.41%, Tata Motors - DVR down by 1.06%, HDFC Bank down by 0.93% and Wipro down by 0.91% were the top losers.

Meanwhile, domestic credit rating agency, ICRA in its latest report has said that the cement industry is likely to witness moderate growth of around 5 percent in the financial year 2018-19, despite a pick-up in demand in recent months and healthy outlook ahead. It also noted that rising energy and freight costs due to higher pet coke, coal and diesel prices during FY18, can hit the profitability margins and debt metrics of cement companies in the coming quarters. It added that the cement demand has picked up from Q3 FY18 and the trend is expected to continue in Q4 FY18, but the growth of the industry may remain flat at 5 percent in FY19.

The rating agency has said that demand for cement has picked up in the recent months, October 2017 to January 2018 by 13.4 percent, on the back of low-cost housing in the eastern markets, Andhra Pradesh and Telangana along with the infrastructure demand from the eastern, southern and western markets. However, it pointed out that the sand availability issues persist in Rajasthan, Uttar Pradesh, Bihar and Tamil Nadu, which are adversely impacting the demand in these regions. Besides, it stated that a pick-up in the affordable and rural housing segments and infrastructure - primarily road and irrigation projects - is likely to continue the demand growth momentum of around 5 percent in FY19.

According to the report, Budget FY19 has provided higher rural credit, increased minimum support price (MSP) for all crops, and allocation for rural, agricultural and allied sectors and stressed on continued focus on the Pradhan Mantri Awas Yojna (PMAY) and infrastructure investments. However, it expects the capacity overhang and the moderate demand growth to continue to keep the industry's capacity utilisation level close to 65 percent over the medium-term. Further, it said that in Q3 FY18, cement prices remained largely similar on a quarter-on-quarter basis in most markets, except Hyderabad, where they witnessed a decline by 5 percent. It added that in other markets, a pick-up in the demand supported prices have continued to remain largely stable in January to February compared to Q3 FY18.

The CNX Nifty is currently trading at 10400.15, up by 20.80 points or 0.20% after trading in a range of 10398.70 and 10424.85. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.64%, Axis Bank up by 3.12%, Adani Ports & Special Economic Zone up by 2.81%, ICICI Bank up by 2.47% and Tata Steel up by 1.52%.

On the flip side, Mahindra & Mahindra down by 1.85%, HPCL down by 1.72%, BPCL down by 1.59%, Bharti Airtel down by 1.35% and Wipro down by 1.09% were the top losers.

The Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 2.97 points or 0.16% to 1,852.68, KOSPI Index increased 3.19 points or 0.13% to 2,447.27, Shanghai Composite increased 16.7 points or 0.53% to 3,155.00, Jakarta Composite increased 38.43 points or 0.62% to 6,284.56, Taiwan Weighted increased 43.4 points or 0.4% to 10,936.93, Nikkei 225 increased 142.18 points or 0.66% to 21,820.44 and Hang Seng increased 337.36 points or 1.12% to 30,566.94.