Benchmarks trim gains; Sensex holds 24000 mark

Indian equity benchmarks trimmed their gains and continued to trade firm in the late afternoon session on account of buying in frontline counters. The sentiments were on optimistic note from the early trade after counting trend pointed landslide victory for Modi’s led party in general election, which is not only seen as positive development for the country men, but also foreign investors. Traders were seen piling up positions in Realty, Bankex and Power stocks, while selling was witnessed in FMCG, IT and TECK sector stocks. In scrip specific development, Karnataka Bank, the Mangalore-based private sector lender, was trading in green after posting strong numbers in March quarter. Net profit of the bank grew 20.5% year-on-year to Rs 81.2 crore on higher net interest income and lower provisions. On the global front, the Asian markets were trading mostly in red, while the European markets traded too on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,200 and 24,000 levels respectively. The market breadth on BSE was negative in the ratio of 1167:1517 while 140 scrips remained unchanged.

The BSE Sensex is currently trading at 24070.08, up by 164.48 points or 0.69% after trading in a range of 25375.63 and 232873.16. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.30%, while Small cap index up by 0.63%.

The gaining sectoral indices on the BSE were Realty up by 5.14%, Bankex up by 4.39%, Power up by 2.58%, PSU up by 2.46% and Capital Goods up 1.80%.

On the flip side, FMCG down by 2.44%, IT down by 2.06%, TECK down by 1.27%, HealthCare down by 1.16% and Consumer Durables down by 0.60% were the losing indices on BSE.   

The top gainers on the Sensex were SSLT up by 7.93%, SBI up by 4.91%, ICICI Bank up by 4.70%, Axis Bank up by 3.91% and BHEL up by 3.65%.

On the flip side, Tata Steel down by 4.73%, ITC down by 3.49%, Wipro down by 2.97%, Infosys down by 2.86% and Dr. Reddy’s Lab down by 2.67%.

Meanwhile, India’s fiscal deficit is likely to contain at 4.5% of GDP in the financial year 14, as compared to 4.89% of GDP in the FY13. The fiscal deficit figure at 4.5% of GDP is lower than the government’s revised estimates. The government in its interim Budget has estimated fiscal deficit at 4.6% of GDP at Rs 5.24 lakh crore and revenue deficits at 3.3% at Rs 3.70 lakh crore for FY14. The revenue deficit of the government too would be lower at 3.2% of GDP for FY14.

The fiscal deficit, which is the gap between expenditure and revenue, is expected to come down mainly on account of expenditure compression and higher realisation from the 2G spectrum auction. To contain fiscal deficit, Indian government has taken various measures including banning government departments for holding meetings in 5-star hotels among others to cut spending in non-critical areas. As per the Government’s fiscal consolidation roadmap, the deficit will be reduced to 4.2% in FY15 and 3.6% FY16. India’s fiscal deficit widened to a record high level at 4.89% of GDP in FY14.

High fiscal deficit has adverse impact on country’s economy as it leads to three macro economic problems such as a balance of payments crisis, high interest rates because of crowding out and high inflation owing to the currency depreciation.

The CNX Nifty is currently trading at 7,210.75, up by 87.60 points or 1.23% after trading in a range of 7,563.50 and 7,130.65. There were 37 stocks advancing against 13 declining on the index.

The top gainers of the Nifty were SSLT up by 8.32%, PNB up by 7.25%, IndusInd Bank up by 6.86%, BPCL up by 6.52% and SBI up by 5.76%.

On the flip side, Tata Steel down by 4.53%, ITC down by 3.44%, Wipro down by 3.00%, Dr. Reddy’s Lab down by 2.68% and Infosys down by 2.59% were the major losers on the index.

Asian equity indices were trading mostly in red; Hang Seng down by 0.08%, Straits Times down by 0.34% and Nikkei 225 plunged 1.41%. While, Jakarta Index up by 0.40% and Shanghai Composite up by 0.08% were the only gainers amongst Asian pack.

The European markets were trading mostly in red; France’s CAC 40 was down by 0.07%, Germany’s DAX dropped 0.12% while UK’s FTSE 100 added 0.05%.