Markets gain traction to trade near day’s high

Indian equity bourses gained the traction in late afternoon session to trade near their intraday high points, despite weak opening in European markets. In line with the larger peers, the broader markets were too rallying with notable gains, while Energy stocks surged the most among all sectoral indices on the BSE. Traders got encouragement, after the Vice President of India, M. Venkaiah Naidu called for a renewed focus on agribusiness, value addition and diversification of agriculture to make farming much more sustainable, profitable and rewarding. Domestic sentiments were positive with the finance ministry’s statement that the liquidity situation in the economy was comfortable, and it will improve further with the central bank’s move to infuse Rs 35,000 crore through the rupee-dollar swap arrangement, announced last week. On the sectoral front, stocks related to the oil sector were in focus, amid Moody's Investors Service latest report showing that India's oil companies will continue paying high dividends, which will be negative for refiners, but the oil producers will not be as significantly affected.

On the global front, European markets were trading in red, as France's manufacturing confidence weakened slightly in March, after remaining stable in the previous two months. The survey data from the statistical office INSEE showed that the factory confidence indicator fell to 102 from 103 seen in each of the previous three months. In November, the index reading was 105. However, Asian markets were trading in green.

The BSE Sensex is currently trading at 38108.09, up by 299.18 points or 0.79% after trading in a range of 37800.08 and 38110.13. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.88%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Energy up by 1.89%, Bankex up by 1.25%, PSU up by 1.24%, Metal up by 1.23% and Utilities up by 1.20%, while IT down by 0.45% and TECK down by 0.34% were the only losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.91%, Bajaj Finance up by 2.63%, Reliance Industries up by 2.53%, SBI up by 2.38% and Asian Paints up by 2.16%. On the flip side, Infosys down by 0.89%, ITC down by 0.54%, TCS down by 0.45%, Larsen & Toubro down by 0.09% and Bajaj Auto down by 0.00% were the top losers.

Meanwhile, credit rating agency, Moody's Investors Service in its latest report has said that Indian oil companies will continue with high dividend payments, but the agency anticipates negative impact of it for oil refiners, further noting that the oil producers will not be as significantly affected.

According to the report, high shareholder returns-because of government policy-will increase the oil companies' borrowings and constrain their credit profiles, and upstream companies will be better positioned than the refiners to maintain credit quality.

Moody's Investors Service further said that the expected high dividend payments will further stress the refiners' credit metrics due to their low margins and high capital spending. However, the agency expects the regional refining margin, which has weakened significantly since June 2018, to meaningfully improve only in the second half of 2019.

Besides, the report said that credit quality of producers is supported by relatively high oil prices and the absence of a subsidy burden. At the same time, the producers will continue to invest in exploration and development activities, which will likely be funded with retained cash flow and, consequently, their borrowings are unlikely to increase.

The CNX Nifty is currently trading at 11445.20, up by 90.95 points or 0.80% after trading in a range of 11352.45 and 11447.80. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.88%, Bajaj Finance up by 2.77%, Reliance Industries up by 2.58%, NTPC up by 2.29% and Grasim Industries up by 2.27%. On the flip side, Tech Mahindra down by 2.11%, UPL down by 1.44%, Infosys down by 0.75%, ITC down by 0.58% and Wipro down by 0.29% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 gained 451.28 points or 2.15% to 21,428.39, Taiwan Weighted strengthened 79.72 points or 0.76% to 10,559.20, Jakarta Composite soared 57.19 points or 0.89% to 6,468.44, Straits Times advanced 13.12 points or 0.41% to 3,196.04, KOSPI rose 3.94 points or 0.18% to 2,148.80 and Hang Seng increased 43.56 points or 0.15% to 28,566.91. On the flip side, Shanghai Composite was down by 44.10 points or 1.45% to 2,998.93.

European markets were trading mostly in red; France’s CAC fell 1.41 points or 0.03% to 5,259.23 and Germany’s DAX was down by 41.67 points or 0.37% to 11,304.98, while UK’s FTSE 100 was up by 5.21 points or 0.07% to 7,182.79.