Benchmarks recover from initial losses; Nifty reclaims 6800 level

After a strong start and subsequent fall, benchmark equity indices recovering from lows were currently holding their head above water, albeit with slender gains. Initiation of bargain buying activities after markets slipped into negative territory post a strong start mainly have led to gains in late morning deals. Nevertheless, sentiment also got a fillip after the World Bank projected a better economic growth rate of 5.7 percent in fiscal year 2015 for India on the back of a more competitive exchange rate and many large investments going forward, which was more than IMF’s forecast of 5.4% growth for Indian economy during the same fiscal. In positive territory, while Nifty was trading past the crucial 6800 level, Sensex was trading just short of the crucial 22,750 level with slim gains of over one tenth of a percent. Meanwhile, broader indices outperforming larger peers with fat margins were trading with gains of over half a percent.

On the global front, Asian shares extended recent solid gains on Thursday after minutes of the Federal Reserve's latest policy meeting suggested the Fed may be more cautious towards raising interest rates than markets had thought.

Closer home, while majority of the sectoral indices on BSE were trading in green, stocks from Fast Moving Consumer Goods (FMCG), Healthcare and Information Technology counters were languishing at the bottom. While, Healthcare counter extended previous session’s gains on the back of Piramal stocks which were trading upbeat on plans of selling its 11% stake in Vodafone for Rs 8,900 crore, Information Technology counter was beaten blue yet again in anticipation of subdued Q4 earnings.  The overall market breadth on BSE is in the favour of advances which outnumbered declines in the ratio of 1240:834, while 94 shares remained unchanged.

The BSE Sensex is currently trading at 22,738.56 up by 36.22 points or 0.16% after trading in a range of 22,792.49 and 22,672.72. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trade in green; the BSE Mid cap index was up by 0.63%, while Small cap index up by 0.59%.

The top gaining sectoral indices on the BSE were, Power up by 1.50%, Realty up by 1.05%, Capital Goods up by 1.02%, Auto up by 0.98% and Bankex up by 0.36%, while FMCG down by 0.47%, Healthcare down by 0.18%, Metal down by 0.17%, IT down by 0.09% and PSU down by 0.03% were the top losers on the sectoral index.

The top gainers on the Sensex were Tata Motors up by 2.97%, BHEL up by 2.56%, SBI up by 2.13%, NTPC up by 1.74% and Maruti Suzuki up by 0.86%. On the flip side, ONGC down by 2.05%, Dr Reddys Lab down by 1.09%, Tata Steel down by 1.07%, Cipla down by 0.88% and Hindalco down by 0.87%.

Meanwhile, in yet another development which would add to the cheer of policymakers battling to restore faltering growth in Asia's third-largest economy, the World Bank on Wednesday projected an economic growth rate of 5.7 percent in fiscal year 2015 for India on the back of a more competitive exchange rate and many large investments going forward.  This development comes a day after multilateral agency International Monetary Fund (IMF) projected India's economy to grow by 5.4% in 2014-15 and 6.4% in 2015-16 on the back of strengthening global growth, improving export competitiveness and implementation of recently approved investment projects.

World Bank in its latest edition of 'South Asia Economic Focus, bolstered by permanently more competitive exchange rate and progress towards clearance of important investment projects, forecasted India to see an acceleration of growth (factor costs) to 5.7 percent in FY 2015 from 4.8 percent in FY 2014. The Indian rupee, which plunged to all-time low of 68.85 in August last year, has since then recovered substantially to trade sub 60-levels against the US dollar.

However, it pointed that country faces significant amount of threat from its banking sector growing exposure to company debt, which could ultimately affect the government's finances through its ownership and the need to prop up distressed but systemically important banks. Nonetheless, it underscored that South Asian countries - Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka - have all largely recovered from last year's financial turmoil caused by changes in US Federal Reserve monetary policy.

Besides, World Bank in twice-a-year ‘South Asia Economic Focus’, forecasted that economic growth in the region would rise to 5.8 per cent in 2015 from 5.2 per cent this year and 4.8 percent last year

The CNX Nifty is currently trading at 6,803.45 up by 7.25 points or 0.11% after trading in a range of 6,816.45 and 6,781.25. There were 23 stocks advancing against 26 declining and one stock remains unchanged on the index.

The top gainers of the Nifty were Tata Motors up by 3.06%, BHEL up by 2.81%, SBI up by 2.16%, NTPC up by 1.87% and DLF up by 1.61%. On the flip side, ONGC down by 2.00%, Cipla down by 1.37%, Dr. Reddy's Laboratories down by 1.31%, M&M down by 1.03% and Tata Steel down by 1.01% were the major losers on the index.

Asian equity indices were trading mixed; Jakarta Composite dropped by 3.18%, Straits Times contracted 0.39% and Nikkei 225 down by 0.12%. On the flip side, Shanghai Composite up by 0.32%, Hang Seng increased by 0.38% and KOSPI Composite up by 0.10%