Market trims gains

A bout of volatility was witnessed in early afternoon trade as key benchmark indices trimmed intraday gains after the latest data showed that inflation based on wholesale price index remained in the negative territory in February 2016. At 12:17 IST, the barometer index, the S&P BSE Sensex, was up 74.54 points or 0.3% at 24,792.53. The 50-unit Nifty 50 index was up 23.60 points or 0.31% at 7,533.80. Firmness in Asian stocks supported gains on the domestic bourses.

The Sensex gained 71.57 points or 0.28% at the day's low of 24,789.56 in early afternoon trade. The barometer index hit six-week high when it rose 242.52 points or 0.98% at the day's high of 24,960.51 in early trade. The Nifty gained 20.50 points or 0.27% at the day's low of 7,530.70 in early afternoon trade. The index hit six-week high when it rose 73.50 points or 0.97% at the day's high of 7,583.70 in early trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,246 shares rose and 1,012 shares fell. A total of 161 shares were unchanged. The BSE Mid-Cap index was currently up 0.33%. The BSE Small-Cap index was currently up 0.52%. Both these indices outperformed the Sensex.

In overseas markets, Asian stocks rose, buoyed by gains on Wall Street during the previous trading session on Friday, 11 March 2016, and firmer crude oil prices. In mainland China, the Shanghai Composite was currently up 2.2%. In Hong Kong, the Hang Seng index was currently up 1.11%. In Japan, the Nikkei Average settled 1.74% higher. The Bank of Japan's (BOJ) two-day policy meeting begins today, 14 March 2016. The BOJ is seen holding policy rate steady after adopting negative interest rates at its meeting in late January.

US stocks jumped on Friday, 11 March 2016, in a rally largely fueled by a rebound in oil prices. The US Federal Reserve's crucial two-day monetary policy meeting begins tomorrow, 15 March 2016. Federal Reserve officials are likely to hold short-term interest rates steady at its policy meeting amid uncertainties about global financial markets and global growth. The Fed in December 2015 raised its benchmark federal-funds rate from near zero to a range between 0.25% and 0.5%.

Capital goods stocks were mixed. Bharat Heavy Electricals (Bhel) (up 0.29%), Havells India (up 1.62%), L&T (up 0.78%), and Thermax (up 0.3%) gained. Siemens (down 0.16%), ABB (India) (down 0.51%), BEML (down 0.07%) and Bharat Electronics (down 1.66%) declined.

Metal and mining stocks rose on gains in global commodity prices. JSW Steel (up 0.46%), Bhushan Steel (up 4.85%), Hindustan Copper (up 0.62%), Vedanta (up 1.32%), Hindalco Industries (up 1.5%), Hindustan Zinc (up 1.42%), Tata Steel (up 0.76%), National Aluminum Company (up 2.21%) and NMDC (up 1.56%) gained. Jindal Steel & Power declined 3.5%. Steel Authority of India (Sail) was flat at Rs 42.60.

High Grade Copper for May 2016 delivery was currently up 0.98% at $2.263 per pound on the COMEX.

On macroeconomic front, data announced during market hours today, 14 March 2016, showed that inflation based on wholesale price index (WPI) stood at negative 0.91% in February 2016 as compared to a reading of negative 0.9% (provisional) in January 2016. Build up inflation rate in the financial year so far was minus 1.19% compared to a build up rate of minus 2.61% in the corresponding period of the previous year. For December 2015, WPI was revised to minus 1.06% as compared to minus 0.73% reported earlier.

Meanwhile, the data announced after market hours on Friday, 11 March 2016, showed that industrial production declined for the third straight month, registering a fall of 1.5% in January 2016 over January 2015. The output of the manufacturing sector declined 2.8% in January 2016, contributing to the decline in industrial production. Meanwhile, the mining sector output improved 1.2%, while the electricity generation also galloped 6.6% in January 2016.

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