Markets trade slightly higher on good macro economic data

Buoyed by good macro economic data, Indian equity benchmarks have made a positive start and are trading slightly in the green in early deals on Thursday. The index of industrial production (IIP) in January stood at positive 0.1 percent, highest since September 2013, against an expectation of continued contraction. Meanwhile, the consumer price index (CPI) for February slowed to 8.10 percent from 8.79 percent in January, its lowest level since January 2012. However, gains on the up-side remained capped as some cautiousness crept in the market, as the Securities and Exchange Board of India (SEBI) has tightened norms to prevent money laundering through the capital market and has asked capital market entities to conduct a detailed risk assessment of their clients, including those linked to countries facing international sanctions. Meanwhile, Infosys has tanked over 7.50% on reports that IT major expects sluggish growth in January-March (Q4FY2014) quarter mainly due to muted spending by clients, especially in the retail sector.

On the global front, the US stocks finished flat overnight, with the Nasdaq up for the first session in five, as investors grappled with the evolving situation in Ukraine but shrugged off concern over weakness in China’s economy. In Asia, most of the markets remained higher ahead of a batch of key Chinese economic data that may offer clues about the extent of any slowdown.

Back home, on the sectoral front, banking, oil and gas and capital goods witnessed the maximum gain in trade, while software, technology and healthcare remained the top losers on the BSE sectoral space. The broader indices too were going neck-to-neck with benchmarks, while the market breadth on the BSE was positive; there were 996 shares on the gaining side against 550 shares on the losing side while 76 shares remain unchanged.

The BSE Sensex opened at 21736.61; about 119 points lower compared to its previous closing of 21856.22, and touched a high and a low of 21913.04 and 21720.13 respectively. The index is currently trading at 21900.06, up by 43.84 points or 0.20%. There were 26 stocks advancing against 4 declines on the index.

The overall market breadth has made a strong start with 61.41% stocks advancing against 33.91% declines. The broader indices too were trading in green; the BSE Mid cap index up was by 0.45% and Small cap gained 0.34%. 

The top gaining sectoral indices on the BSE were, Bankex up by 1.82%, Oil & Gas up by 1.76%, PSU up by 1.33%, Capital Goods up by 1.10% and Consumer Durables up by 1.07%, while IT down by 3.54%, Teck down by 2.85% and Healthcare down by 0.42% were the top losers on the sectoral index.

The top gainers on the Sensex were SBI up by 2.45%, RIL up by 2.12%, Tata Power up by 1.98%, ICICI Bank up by 1.71% and Dr Reddys Lab up by 1.63%. On the flip side, Infosys was down by 7.51%, Sun Pharma was down by 3.81%, Wipro was down by 1.47% and TCS was down by 0.40% were the top losers on the Sensex.

Meanwhile, India has to cut its oil imports from Iran by nearly two-thirds from the first quarter of 2014 after the United States (US) asked the country to hold the shipments at end-2013 levels. The US told that it currently examines Tehran's resolve to cooperate with world powers on its controversial nuclear programme and India has to cut its purchases of the crude to about 110,000 barrels per day (bpd) from its intake average to 195,000 barrel for the six months to July 20. Further, the US insisting on keeping the 11 million tonnes (MT) quota for the 2014 calendar would mean that India could buy a total oil of not more than 5.5-6 MT during January-June ’2014 period.  

In November, the US and six other world powers attained a historic accord with Iran, allowing easing of some sanctions against the Islamic regime in exchange for halting its programme to attain nuclear weapon capability. According to the agreement, the world powers allowed Iran to maintain its oil exports at 1 million barrels a day to key buyers India, China, Japan and South Korea.

India is the world’s fourth-largest oil importer and a major customer of Iran’s 1.7 million barrels per day of oil exports. During April-December’2013, India had imported 6.74 MT of oil from Iran and planned to buy over 4.2 MT in the last quarter of current financial year. Earlier, six years ago, the international authorities had initiated a programme to halt Iran’s most sensitive nuclear work and targeted Iran’s financial and oil sectors, a main source of revenue for the country. Afterwards, the European Union (EU) had banned oil imports from Iran. In order to comply with international sanctions, Indian government had drastically cut its energy imports from Iran, which has been replaced by Iraq as the second-largest supplier of fuel to India, after Saudi Arabia.

The CNX Nifty opened at 6,491.75; about 25 point lower as compared to its previous closing of 6,516.90, and has touched a high and a low of 6,539.80 and 6,487.55 respectively. The index is currently trading at 6,533.15, up by 16.25 points or 0.25%. There were 43 stocks advancing against 7 declines on the index.

The top gainers of the Nifty were BPCL up by 3.10%, SBI up by 2.49%, PNB up by 2.12%, Bank of Baroda up by 2.10% and Reliance Industries up by 2.09%. On the flip side, Infosys down by 7.55%, Sun Pharma down by 4.03%, Wipro down by 1.51%, HCL Tech down by 1.18% and Lupin down by 0.79% were the top losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite increased 25.27 points or 1.26% to 2,022.96, Hang Seng rose 95.63 points or 0.44% to 21,997.58, Jakarta Composite soared by 30.7 points or 0.66% to 4,715.09, KLSE Composite climbed 1.69 points or 0.09% to 1,820.29, Nikkei 225 surged by 61.28 points or 0.41% to 14,891.67, KOSPI Composite spurted by 10.41 points or 0.54% to 1,942.95 and Taiwan Weighted was up by 65.38 points or 0.75% to 8,750.11.

On the flip side, Straits Times was down by 8.34 points or 0.27% to 3,089.09.