Benchmarks off day’s high after a gap-up start; mood still upbeat

After getting a gap-up start, benchmark equity indices continue to trade in fine fettle in late morning deals on continued buying activities by both funds and retail investors. However, in absence of any positive trigger, market has given up some portion of its gains and is currently trading off day’s high level.

IMF's forecast of better growth prospects for India in 2014 buttressed sentiment in early deals, triggering fresh spell of buying by foreign funds and retail investors. This combined with positive global cues led to euphoria at Dalal Street. Now, although off day’s high, both Sensex and Nifty are comfortably trading past the crucial 22,400 and 6700 levels respectively. Meanwhile, broader indices showing degree of outperformance were trading with gains of close to a percent.

On the global front, Asian shares rose in early trade on Wednesday after Wall Street reversed a three-day losing streak, but Japanese stocks dropped sharply after the yen surged on fading hopes of near-term stimulus from the Bank of Japan.

Closer home, sectorally stocks from Healthcare, Metal and Realty counters were the supporting pillars of markets, while those from Information Technology and Technology counters were trading downbeat. In stock-specific activity, Sun pharmaceuticals rallied for second consecutive session triggered by plans to acquire 100% of Ranbaxy Laboratories in an all-stock transaction. Meanwhile, Tata Steel firmed up after Steel & Tube Holdings of New Zealand agreed to acquire Tata Steel International (Australasia) for a cash consideration of NZ $27.5 million. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1259:577; while 102 shares remained unchanged.

The BSE Sensex is currently trading at 22,441.37 up by 97.92 points or 0.44% after trading in a range of 22,479.07 and 22,389.21. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.92%, while Small cap index up by 0.91%.

The top gaining sectoral indices on the BSE were, Healthcare up by 1.71%, Metal up by 1.64%, Realty up by 1.41%, Consumer Durables up by 1.31% and Auto up by 0.84%, while IT down by 1.01% and Teck down by 0.79% were the only losers on the sectoral index.

The top gainers on the Sensex were Sun Pharma up by 5.49%, Hindalco up by 4.37%, Tata Motors up by 2.39%, Tata Steel up by 2.12% and SBI up by 1.39%. On the flip side, Infosys down by 1.04%, TCS down by 0.97%, ONGC down by 0.86%, Hero MotoCorp down by 0.67% and Maruti Suzuki down by 0.56%.

Meanwhile, as per the Paris-based think-tank the Organisation for Economic Co-operation and Development (OECD), emerging economies like India, Brazil and Russia are expected to witness weak growth in coming future. The Composite Leading Indicators (CLIs), designed to anticipate turning points in economic activity, point to weakening growth in major emerging economies except China, where the CLI points to growth remaining around trend.

India’s CLI declined to 97.6 in February from 97.7 registered in January. CLI for India has been declining since November 2013 when it stood at 97.9. At present, Indian economy is struggling with a slowdown and its growth has slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarters of FY14.

Referring to global front, OECD’s report noted that the growth prospect for most of the advanced countries has stabilized. CLIs for the 33-member grouping as well as the United States and Canada indicate growth remaining around trend. The indicator points to growth returning to trend in Japan and above trend in the United Kingdom. In the Euro Zone, CLIs continue to indicate a positive change in growth momentum. CLI points to stable growth momentum in France, while in Germany, growth is expected to be above trend.

The CNX Nifty is currently trading at 6,718.80 up by 23.75 points or 0.35% after trading in a range of 6,733.60 and 6,711.70. There were 37 stocks advancing against 13 declining on the index.

The top gainers of the Nifty were Sun Pharma up by 5.42%, Hindalco up by 4.37%, Bank of Baroda up by 2.99%, Tata Motors up by 2.39% and NMDC up by 2.37%. On the flip side, Tech Mahindra down by 2.47%, HCL Tech down by 1.81%, TCS down by 1.16%, Infosys down by 1.07% and ONGC down by 0.94% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite increased by 0.20%, Hang Seng rose 0.90%, Jakarta Composite gained 0.01%, Straits Times soared 0.13%, KOSPI Composite up by 0.10% and Taiwan Weighted was up by 0.43%. On the flip side, Nikkei 225 down by 1.73% was the only loser in Asian peers.