Markets post modest gain ahead of crucial economic data

The Indian markets fared comparatively better on Tuesday, to what they had gone through last session, though there was no major gain but volatility too was not seen at any point of time. There was a modest gap-up start and the benchmarks kept their spirit high, trading in a range throughout the session, there were some instances of profit booking but at no point market looked losing hold. However, sense of cautiousness too prevailed in the market ahead of the US Federal Chair Janet Yellen’s testimony on monetary policy and the nation's economic outlook.

Earlier the US markets closed modestly higher as traders remained concerned about the Janet Yellen’s stand, though not likely to differ substantively from Ben Bernanke's dovishness. The Asian markets ended with good gains with some indices posting their biggest advance since November. The European markets extending their gains made a good start, following upbeat cues from Asian markets.

Back home, the Indian markets though could not made an impressive mark but remained firm in day’s trade and never faltered from the range. The cautiousness mainly emerged in early deals with Credit Suisse and Nielsen’s latest survey showing that confidence among emerging market consumers has deteriorated during the last year and that optimism level in India has also slipped four percentage points over last year and India was ranked fifth in the list. The good economic data too was unable to put life into the market, India's trade deficit narrowed in January to $9.92 billion, helped by a 77 per cent drop in imports of gold and silver. However, exports growth remained almost flat, up by 3.79 percent year-on-year to $26.75 billion, compared with a 3.5 percent annual growth in December. Market, moves on upside was partially restricted by the weakness in heavyweight Reliance Industries, which came under pressure after Delhi Chief Minister Arvind Kejriwal has asked anti-corruption branch for legal cases to be filed against Reliance Industry Chairman Mukesh Ambani and some ministers, over pricing of gas produced from the KG-D6 basin. IT stocks were the major gainers of the trade after software industry body Nasscom forecasted that IT sector exports will grow by 13-15 percent as against 13 percent (Y-o-Y) in FY15. It also said that domestic IT market is expected to grow 9-12 percent and the additional FY15 revenue will be $13-14 billion in FY15. Sugar stocks too showed some upmove ahead of the Cabinet Committee on Economic Affairs (CCEA) meeting on sugar subsidy. The government is likely to decide on subsidy for export of 4 million tonnes of raw sugar. Broader markets too registered modest gains for the day, though the overall volume was low once again.

The market breadth remained in favor of decliners, as there were 1,266 shares on the gaining side against 1,370 shares on the losing side, while 139 shares remained unchanged.

Finally, the BSE Sensex gained 29.10 points or 0.14%, to settle at 20363.37, while the CNX Nifty added 9.25 points or 0.15% to settle at 6,062.70.

The BSE Sensex touched a high and a low of 20443.35 and 20349.51, respectively. The BSE Mid cap index was up by 0.28%, while the Small cap index gained 0.10%.

The top gainers on the Sensex were Tata Motors up by 2.83%, Tata Steel up by 2.00%, ONGC up by 1.40%, HDFC up by 1.17% and ICICI Bank up by 1.00%, while, NTPC down by 2.21%, Hindalco down by 2.01%, RIL down by 1.96%, Hero MotoCorp down by 1.83% and Maruti Suzuki down by 0.82% were the top losers in the index.

On the BSE Sectoral front, IT up by 0.99%, Auto up by 0.77%, Teck up by 0.74%, Consumer Durables up by 0.58% and Metal up by 0.37% were the top gainers, while Power down by 1.02%, Realty down by 0.90%, Oil & Gas down by 0.58%, Healthcare down by 0.32% and FMCG down by 0.11% were the top losers in the space.

Meanwhile, reacting strongly to US Food & Drug Administration (FDA) for imposing disproportionately strong penalties on Indian pharmaceutical companies, India has raised concerns over US FDA inspection on domestic pharma firms, adding that authority was not giving enough opportunity to Indian pharmaceutical companies to explain themselves before taking action against them for flouting quality norms. Commerce and Industry Minister Anand Sharma met US FDA Commissioner Margaret Hamburg and told that in some cases when clarifications were sought from pharmaceutical companies, the US FDA took strong action even before the clarifications could be given.

It is reported that both countries have agreed on plan that their regulators will inform each other before undertaking inspections, allowing host-country inspectors to join as observers. The regulators will also share information on any problem found in terms of lack of compliance with current good manufacturing practices, clinical practices and laboratory practices by manufactures and sponsors of medical products and cosmetics. The US FDA has also offered to help in the capacity development of Indian drug regulators, academics and industry so that there would be a better coordination between the two countries in the area. Presently, inspections are conducted by the regulators separately as countries do not have any data-sharing agreement.

The US market accounts for highest revenue for the Indian pharma industry as the country has the largest number of USFDA-approved plants for generics manufacturing. However, US FDA, an agency of the United States responsible for protecting and promoting public health through the regulation and supervision of drugs, has stepped up its efforts to ensure that only good quality medicines reach the American shores. Over one and half years, it has raised concerns over the quality of the drugs produced in India and imposed penalties on plants owned by large companies such as Ranbaxy, Wockhardt, RPG Life Sciences and Agila Specialities for flouting quality norms. The recent actions taken by the US FDA has hurt the reputation of the country’s drug industry, which is the largest supplier of low-cost generics in the world. 

The CNX Nifty touched a high and low of 6,081.85 and 6,053.25 respectively.

The major gainers of the Nifty were HCL Tech up 4.35%, Ranbaxy up by 2.99%, Tata Motors up by 2.76%, Tata Steel up by 2.43% and BPCL up by 1.63%. On the other hand, NTPC down by 2.92%, Reliance Industries down by 2.21%, PNB down by 2.16%, Hindalco down by 2.11% and Hero MotoCorp down by 1.91% were the top losers.

The European markets were trading in green, France's CAC 40 was up by 0.77%, Germany's DAX was up by 1.28% and United Kingdom's FTSE 100 was up by 0.98%. 

The Asian markets concluded Tuesday’s trade in green, while the Nikkei 225 was closed on account of ‘National Foundation Day’ holiday. Japan’s Economy Watchers Current Index fell to a seasonally adjusted 54.7, from 55.7 in the preceding month while Japanese Household Confidence rose to a seasonally adjusted annual rate of 40.5, from 41.3 in the preceding month. Malaysia is expected to report strong fourth-quarter GDP growth of 4.7%, benefiting from increased industrial production and a boost to exports. The Southeast Asian country is set to report its fourth quarter GDP growth early Wednesday morning. Taiwanese Trade Balance rose to a seasonally adjusted annual rate of 2.97B, from 1.41B in the preceding month.The Paris-based Organization for Economic Cooperation and Development (OECD) stated that the outlook for most advanced economies is improving, with recoveries in the United States and Japan leading the way. The monthly leading indicator covering 33 member countries had reached its highest level since February 2011 in December, indicating that growth was firming. Japan saw its indicator move up to 101.4 from 101.3 in November, also hitting its highest level since the financial crisis as the central bank boosts the economy with unprecedented monetary stimulus while China’s reading stable at 99.3.