Markets end flat amid consolidation; Metals outshine

After witnessing sharp decline in the previous session markets end flat amid consolidation with metal shares gaining the most. Meanwhile, investors are keenly awaiting fourth quarter earnings slated to be commence next week.

On Tuesday, indices slumped over 2% as weak global cues took precedence over Reserve Bank of India’s rate cut by 25 bps which was in line with economists’ expectations.

“With the government having delivered a fiscally prudent FY17 budget, it was widely expected that the RBI keep its side of the bargain. Even though the central bank reduced the repo rate by 25bps the focus of the policy was more on easing liquidity in the system and ensuring that banks pass on the rate cuts,” said AK Prabhakar, Head of Research, IDBI Capital.

The S&P BSE Sensex rose 17 points to end at 24,901 and the Nifty50 gained 11 points to close at 7,614.

The broader markets, however, outperformed the benchmark indices- BSE Midcap and Smallcap indices were up 0.6%-1%.

Further, growth in India's services firms rose to a 21 month high of 54.3 in March after a sudden contraction of 51.4 in February, as new businesses increased markedly, a survey showed today.

“Although market corrected post the policy announcement focus has now shifted to earnings and global cues.

If the Nifty trades below 7560 then expect correction till 6800 or below by end of May 2016 as profit booking is likely to emerge ahead of results season,” adds Prabhakar.

In the currency front, rupee recovered by 8 paise to 66.38 against the dollar at the Interbank Foreign Exchange on fresh selling of the US currency by banks and exporters amid a higher opening of the domestic equity market.

Foreign portfolio investors sold shares worth a net Rs 801 crore yesterday, as per provisional data released by the stock exchanges.

Among overseas markets, Asian stocks held near three-week lows on Wednesday as concerns about the underlying strength of the Chinese economy dogged investors.

Oil prices jumped by nearly two percent on growing hopes a global output freeze may be agreed soon.

MSCI's broadest index of Asia-Pacific shares outside Japan was barely in positive territory after falling to its lowest level since March 16. Overnight, it dropped 1.6%, its biggest fall in almost two months.

Back home, metal shares witnessed strong momentum in trades today with Tata Steel leading the gains.

Tata Steel surged over 5% after Sanjeev Gupta, a potential buyer of Tata Steel’s British assets, decides to meet Britain’s business secretary on Tuesday to discuss his plan to turn around the struggling operations without the loss of thousands of jobs.

Prime Minister David Cameron’s government has said it was working to broker a deal with potential buyers after India’s Tata Steel put its British operations up for sale last week, threatening thousands of jobs.

Other notable gainers from the metal pack were Hindalco, Jindal Steel, NMDC, Vedanta, JSW Steel and SAIL, all surging between 2%-5%.

Hindustan Zinc ended 0.5% down after the stock turned ex-dividend for Rs 24 per share today. On Tuesday, the stock closed at Rs 187 on the NSE and BSE.

India's biggest vehicle manufacturer Tata Motors rose around 3% after launching the compact hatchback Tiago today at Rs 3.39 lakh petrol (ex-showroom, Mumbai), while the diesel is priced at Rs 4.18 lakh.

Reliance Jio Infocomm has plans to offer 0.5 paisa per 10 kb of data usage, which is substantially lower than the 4 paise per 10 Kb data being charged by India's top telcos Bharti Airtel, Vodafone India, Idea Cellular. Bharti Airtel and Idea Cellular were up 0.1%-1%.

TCS has set up an open innovation centre in Nashik to solve social problems in local communities. The stock is gained almost 1%.

On the losing side, Adani Ports, Axis Bank, ICICI Bank, Infosys and Asian Paints dipped between 1%-2%.

Financial shares extended gains for second straight day on profit booking after the Reserve Bank of India today reduced the repo rate or repurchase rate, the rate at which banks borrow from the central bank, by 25 basis points.

Adani Group is looking at buying the local assets of US-headquartered SunEdison Inc, two people familiar with the matter told Reuters, after the heavily indebted US solar power developer sought partners for its projects. Shares of Adani Ports slipped by 2%.

BROADER MARKETS IN FOCUS

Shares of chemicals companies were on a roll with most of the mid-and-small sized shares rallying by up to 20% on the BSE.

Camphor & Allied Products, Sudarshan Chemical Industries, AksharChem India, Sunshield Chemicals, Camex, Vidhi Dyestuffs Manufacturing, Thirumalai Chemicals and Kiri Industries zoomed between 10%-20%.

Gallantt Ispat rallied 18% to Rs 641, also its lifetime high on the BSE, after the company said that its board has approved the capital expenditure (capex) plan of Rs 511 crore.

Ashoka Buildcon was locked in lower circuit of 20% at Rs 136, also its 52-week low on the BSE on back of heavy volumes.

Shares of cement manufacturers were trading higher on the bourses in an otherwise range bound market on expectation of strong show in the current quarter and volume recovery led by higher government spends on infra and revival in housing demand.

UltraTech Cement, ACC, Shree Cement, Ambuja Cements, Century Textiles, Ramco Cements, Deccan Cements, HeidelbergCement, Gujarat Sidhee Cement, India Cements, Birla Corporation, Sanghi Industries, J K Cements, Ramco Cement and HeidelbergCement and Grasim Industries were up 1%-9% on the BSE.