Markets trade in fine fettle in early deals on Tuesday

After making a positive opening, Benchmarks continue to trade higher in morning deals, led by gains in selected index heavyweights. Sentiments remained up-beat with C Rangarajan, Chairman, Prime Minister’s Economic Advisory Council (PMEAC) statement that with gold imports slowing down and inflation levels showing signs of decline, the country’s current account deficit (CAD) is expected to be around 2 per cent of the GDP in the coming few years. Further, Capital inflows by foreign funds and appreciating rupee also steadied the sentiments.

On the global front, the US markets ended modestly higher in the last session on an upbeat report on service sector activity; however the continued clashes between Ukrainian armed forces and pro-Russian militants in the eastern part of the country capped any major upside. The Asian markets were trading in green. Back home, on the sectoral front, FMCG, Capital Goods and Oil & Gas witnessed the maximum gain in trade, while IT and Teck were the top losers on the BSE. The market breadth on BSE remains positive with advances to declines in the ratio of 916:543. BSE Sensex and NSE Nifty were comfortably trading near their psychological 22,500 and 6,700 levels respectively.

The BSE Sensex is currently trading at 22571.76, up by 126.64 points or 0.56% after trading in a range of 22594.63 and 22512.23.There were 23 stocks advancing against 7 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.51% and Small cap index up by 0.41%.

The top gaining sectoral indices on the BSE were, FMCG up by 1.12%, Capital Goods up by 0.75%, Oil & Gas up by 0.75%, Bankex up by 0.70% and Consumer Durables up by 0.69%, while IT down by 0.15% and Teck down by 0.02% were the losers on the sectoral index.

The top gainers on the Sensex were ITC up by 1.68%, BHEL up by 1.51%, ONGC up by 1.22%, ICICI Bank up by 1.20% and Tata Steel up by 1.12%. On the flip side, Hindalco Inds was down by 0.79%, Hero MotoCorp was down by 0.43%, Bajaj Auto  was down by 0.37%, TCS was down by 0.33% and Maruti Suzuki down by 0.24% were the top losers on the Sensex.

Meanwhile, Prime Minister's Economic Advisory Council (PMEAC)’s chairman C Rangarajan expects country’s current account deficit (CAD) to be around 2% of the gross domestic product (GDP) in the coming few years, on the back of reduction in import of gold and some signs of decline in inflation. He further emphasized that, while exports picked up, imports slowed down not only in relation to gold but also in context with oil.

Additionally, the former RBI Governor pointed that with inflation showing signs of decline and gold prices also not rising, the attraction of gold as an asset has come down, something which reflects in the reduction of gold import.

Finance Minister P Chidambaram, while tabling the interim budget had pegged CAD at $45 billion this financial year, well below the $88 billion level in FY'13. In the first half (April-September) of the financial year, CAD narrowed to $26.9 billion or 3.1% of GDP from $37.9 billion or 4.5% of the GDP in the same period last fiscal.

Both the government and the Reserve Bank of India (RBI) took slew of steps to bring down gold imports, one of the major causes for the widening of the CAD in 2012-13. However, on relaxation of administrative restrictions imposed on gold import, Rangarajan said that these may be reversed, given that prices of the yellow metal have stabilized. Both, gold and silver imports shrank by 40% to $33.46 billion in 2013-14, or just 7% of total import bill, against 11% in the earlier fiscal, after the government put in place steps to check their runaway imports.

The CNX Nifty is currently trading at 6,736.05 up by 36.70 points or 0.55% after trading in a range of 6,740.80 and 6,719.00. There were 34 stocks advancing against 16 declines on the index.

The top gainers of the Nifty were ITC up by 1.60%, ICICI Bank up by 1.56%, Tata Steel up by 1.47%, ONGC up by 1.28% and L&T up by 1.09%. On the flip side, TCS down by 0.48%, Ultra Cement down by 0.44%, Bajaj-Auto down by 0.41%, Jindal Steel down by 0.41% and Hero Moto down by 0.33% were the top losers on the index.

 Most of Asian equity indices were trading in green; Shanghai Composite gained 9.48 points or 0.47% to 2,036.83, Jakarta Composite rose 9.71 points or 0.20% to 4,852.21, Straits Times increased by 3.71 points or 0.11% to 3,245.31 and Taiwan Weighted was up by 42.04 points or 0.47% to 8,912.47.

On the flip side, KLSE Composite was down by 0.56 points or 0.03% to 1,859.98.

Hong Kong and South Korea markets remained shut for the trade today for Buddha's Birthday Holiday, while the Japanese market is closed for Greenery Day.