Benchmarks trade in fine fettle in early deals

Indian equity benchmarks made an optimistic start and are trading in fine fettle in early deals on Thursday as traders took some encouragement with the Reserve Bank of India’s (RBI) statement that it will inject long-term liquidity worth $5 billion into the system through foreign exchange swap arrangement with banks for three years, in order to meet the durable liquidity needs of the system. Some support also came with report that the private companies in manufacturing sector posted a 24.9% growth in net profit in the October-December quarter of the current fiscal on annual basis, benefitting from lower tax provisions. Traders also took some comfort with report that the RBI has relaxed norms for imports of capital and non-capital goods by raising the trade credit limit to $150 million under the automatic route.

On the global front, most of the Asian markets are trading in red at this point of time as investors await data from China for clues about the health of its economy. The US markets ended in green on Wednesday after economic data showed fresh signs of stability in the manufacturing sector and muted inflation.

Back home, the auto sector stocks remained in focus with the Federation of Automobile Dealers Associations (FADA) of India’s data stating that the auto industry’s retail sales in February dropped 8.06%, as weak consumer demand continues for the sixth straight month. The total auto sales in February were 1,452,078, compared to 1,579,349 units last year. In scrip specific developments, Deep Industries zoomed on securing order worth Rs 91.75 crore from ONGC and Essel Propack edged higher on redeeming Commercial papers worth Rs 50 crore.

The BSE Sensex is currently trading at 37842.27, up by 90.10 points or 0.24% after trading in a range of 37811.41 and 37907.78. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.01%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Energy up by 0.55%, Bankex up by 0.54%, Metal up by 0.51%, Realty up by 0.25% and Capital Goods was up by 0.23%, while Power down by 1.08%, Utilities down by 0.93%, Auto down by 0.67%, Consumer Durables down by 0.53% and PSU was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.91%, Indusind Bank up by 2.56%, Axis Bank up by 1.11%, HDFC up by 1.02% and Tata Steel up by 0.92%. On the flip side, Power Grid Corporation down by 3.21%, Hero MotoCorp down by 1.72%, Tata Motors down by 1.29%, Bajaj Auto down by 1.21% and Tata Motors - DVR down by 0.93% were the top losers.

Meanwhile, in order to meet the durable liquidity needs of the system, the Reserve Bank of India (RBI) has decided to inject long-term liquidity worth $5 billion into the system through foreign exchange swap arrangement with banks for three years. The swap will be in the nature of a simple buy/sell foreign exchange swap from the RBI side.

Under the swap, a bank would sell US dollars to the RBI and simultaneously agree to buy the same amount of US dollars at the end of the swap period. The US Dollar amount mobilised through the auction, to be conducted on March 26, would also reflect in RBI's foreign exchange reserves for the tenor of the swap while also reflecting in RBI's forward liabilities.

The Central Bank said the market participants would be required to place their bids in terms of the premium that they are willing to pay to the RBI for the tenor of the swap, expressed in paisa terms up to two decimal places. Under the swap auction, minimum bid size would be $25 million and in multiples of $1 million thereafter.

The CNX Nifty is currently trading at 11363.45, up by 21.75 points or 0.19% after trading in a range of 11356.05 and 11383.45. There were 22 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.23%, Indusind Bank up by 2.27%, Indiabulls Housing up by 2.17%, Zee Entertainment up by 1.57% and Indian Oil Corporation up by 1.45%. On the flip side, Power Grid Corporation down by 3.31%, Ultratech Cement down by 1.74%, Hero MotoCorp down by 1.65%, Adani Ports & SEZ down by 1.16% and HPCL down by 1.10% were the top losers.

Asian markets are trading mostly in red; Straits Times slipped 6.00 points or 0.19% to 3,189.59, Hang Seng dipped 7.70 points or 0.03% to 28,799.75, Taiwan Weighted shed 28.55 points or 0.28% to 10,344.77, KOSPI decreased 2.07 points or 0.10% to 2,146.34 and Shanghai Composite was down by 32.89 points or 1.09% to 2,994.06. On the flip side, Nikkei 225 gained 42.91 points or 0.20% to 21,333.15 and Jakarta Composite was up by 9.40 points or 0.15% to 6,386.98.