Indices pare some of gains in early noon session

The local equity markets have pared some of their gains but are still trading in positive terrain in noon session. Both Sensex and Nifty were trading above the crucial 38,600 and 11,550 levels, amid easing crude prices. Buying in frontline stocks such as ONGC, HCL Technologies and Bharti Airtel were aiding sentiment, while selling was witnessed in Tata Motors - DVR, Hero MotoCorp and Kotak Mahindra Bank. Some optimism came in with a private report stating that the US’ decision to end the Iran oil sanctions waiver will not affect India’s investments in Chabahar port in Iran. The revocation of the ‘significant reductions exemption’(SRE) which allowed eight countries, including India, to continue to source Iranian oil for the past six months ends on May 2, following which the US expects oil imports from Iran to go down to zero. India has been paying for a large percentage of its oil imports through a rupee mechanism that is deposited in an escrow account in an Indian bank. Traders took note of a report that around 3.10 crore small farmers have so far received the first tranche of Rs 2,000 each under the PM-Kisan scheme and 2.10 crore peasants have got the second installment as well, costing Rs 10,500 crore to the exchequer.

On the global front, Asian markets were trading mostly in red, as the rally on Wall Street, where the S&P 500 logged an all-time record high close, ran out of steam. Back on the street, in scrip specific development, ICICI Securities edged up despite reporting a fall of 19.55% in its net profit at Rs 121.53 crore for the quarter under review as compared to Rs 151.07 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 38614.70, up by 49.82 points or 0.13% after trading in a range of 38571.00 and 38701.52. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green and red; the BSE Mid cap index lost 0.05%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.13%, Energy up by 0.96%, Telecom up by 0.87%, Realty up by 0.81%, TECK was up by 0.75%, while Auto down by 1.15%, Basic Materials down by 0.68%, FMCG down by 0.67%, Metal down by 0.43% and Power was down by 0.39% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.98%, HCL Technologies up by 1.90%, Bharti Airtel up by 1.68%, Indusind Bank up by 1.51% and Asian Paints was up by 1.22%. On the flip side, Tata Motors - DVR down by 5.24%, Tata Motors down by 5.16%, Hero MotoCorp down by 1.41%, Kotak Mahindra Bank down by 1.22% and Maruti Suzuki was down by 1.22% were the top losers.

Meanwhile, credit rating agency Care Ratings in its latest report has warned that a spike in crude oil prices by 10 percent owing to the US sanctions on Iranian crude exports can result in a 0.40 percent widening of the current account deficit (CAD), which can subsequently play out into a 3-4 percent fall in the rupee and also push up inflation by 0.24 percent. It also said that Iran is India's third largest supplier and meets a tenth of India’s crude demand and the immediate challenge is to find alternate suppliers who will be able to deliver India at competitive prices as Tehran offers after May 2.

According to the report, if the crude prices remain around $75 a barrel for another month, the Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) may postpone a rate cut in the June bi-monthly committee meetings. It pointed out that rising crude prices can have a two-way impact on the domestic economy, which will play out on both the revenue and expenditure fronts. It added that while higher oil prices will mean more revenue for the states as tax is ad valorem, but for the Centre, it may not matter as the rates are fixed.

Rating agency further said that oil marketing companies would earn higher profits if there is a pass-through which can be beneficial for the government too unless the subsidy on kerosene comes in the way. With the US-directed sanctions kicking off from May 2, it would be interesting to see how the various macroeconomic indicators of the domestic economy change course owing to increase in crude prices.

The CNX Nifty is currently trading at 11596.75, up by 20.80 points or 0.18% after trading in a range of 11578.85 and 11620.85. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.17%, HCL Technologies up by 1.97%, BPCL up by 1.89%, Indusind Bank up by 1.68% and Indian Oil Corporation was up by 1.67%. On the flip side, Tata Motors down by 5.46%, Hero MotoCorp down by 1.48%, Maruti Suzuki down by 1.33%, Grasim Industries down by 1.27% and Ultratech Cement was down by 1.27% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 142.91 points or 0.48% to 29,820.33, KOSPI fell 24.42 points or 1.1% to 2,196.09, Jakarta Composite dropped 26.09 points or 0.4% to 6,436.73, Taiwan Weighted dropped 14.72 points or 0.13% to 11,010.96, Nikkei 225 slipped 72.77 points or 0.33% to 22,186.97, Shanghai Composite was down by 10.43 points or 0.33% to 3,188.16. On the flip side, Straits Times was up by 5.66 points or 0.17% to 3,359.13.