Market holds positive zone in range bound trade

The movement for key benchmark indices continued to be in narrow range in afternoon trade. At 13:15 IST, the barometer index, the S&P BSE Sensex, was up 158.04 points or 0.64% at 24,840.52. The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was up 60.90 points or 0.81% at 7,559.65. Gains in global stocks aided the upmove on the domestic bourses. World stocks rose after the US Federal Reserve slashed its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review yesterday, 16 March 2016.

The market breadth indicating the overall health of the market was strong. On BSE, 1,496 shares rose and 884 shares fell. A total of 173 shares were unchanged. The BSE Mid-Cap index was currently up 1.03%. The BSE Small-Cap index was currently up 0.73%. Both these indices outperformed the Sensex.

In overseas stock markets, Asian stocks edged higher after the US Federal Reserve after its monetary policy review yesterday, 16 March 2016, reduced the number of interest rate hikes expected this year. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US.

US stocks rose yesterday, 16 March 2016, in the aftermath of the Fed statement. The Fed concluded a two-day policy meeting by leaving interest rates untouched, as expected, and signalling fewer rate hikes in coming months as the United States continues to face risks from an uncertain global economy. In light of the current shortfall of inflation from 2 percent, the committee will carefully monitor actual and expected progress toward its inflation goal, the Fed said in a statement. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation, it said.

Most capital goods shares edged higher. SKF India (up 2.59%), Bharat Electronics (up 2.51%), Siemens (up 2.49%), Praj Industries (up 2.38%), ALSTOM India (up 2.22%), Suzlon Energy (up 1.99%), Thermax (up 1.74%), Punj Lloyd (up 1.57%), Havells India (up 1.48%), Jindal Saw (up 1.13%), ABB India (up 1.06%), Bharat Heavy Electricals (up 0.99%), Crompton Greaves (up 0.85%) and BEML (up 0.08%), edged higher. AIA Engineering (down 0.45%), Alstom T&D India (down 0.95%), Reliance Defence and Engineering (down 1.02%) and Lakshmi Machine Works (down 1.33%), edged lower.

Most FMCG shares rose. GlaxoSmithKline Consumer Healthcare (up 3.90%), Marico (up 1.79%), Nestle India (up 1.11%), Hindustan Unilever (up 0.80%), Dabur India (up 0.77%), Procter & Gamble Hygiene & Health Care (up 0.77%), Bajaj Corp (up 0.29%), Tata Global Beverages (up 0.26%) and Godrej Consumer Products (up 0.14%), edged higher. Britannia Industries (down 0.38%), Colgate Palmolive (India) (down 0.89%) and Jyothy Laboratories (down 1.42%), edged lower.

Meanwhile, Finance Minister Arun Jaitley was today, 17 March 2016, quoted as saying that it would be difficult for the government to accept the opposition Congress party's demand to cap the goods and services tax (GST) rate in the GST constitution amendment bill stuck in parliament. The Congress wants Jaitley to cap the rate of GST at less than 20%. Considered as a major indirect tax reform in the country, GST aims to remove barriers across states and unite the country into a common market. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.

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