Benchmarks trim gains; trade continues in green

Indian equity benchmarks pared some of their gains however continued to trade firm in the late afternoon session on account of buying in front line counters. The sentiments were on optimistic note from the early trades after minutes of the US Federal Reserve's last meeting reassured investors that policy makers will continue to support the world’s biggest economy. Traders were seen piling up positions in Consumer Durables, Realty and Metal stocks, while selling was witnessed in TECK and IT stocks. Hectic activity was witnessed in jewellery stocks after the Reserve Bank eased the gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the metal to boost exports. In scrip specific development, Coal India was trading firm on reports that Prime Minister-elect Narendra Modi is exploring the possibility of splitting up the state-owned company and opening the sector to foreign investment to boost output and cut imports.

On the global front, the Asian markets were trading mostly in green, while the European markets too traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,250 and 24,400 levels respectively. The market breadth on BSE was positive in the ratio of 2221:632 while 97 scrips remained unchanged.

The BSE Sensex is currently trading at 24448.25, up by 150.23 points or 0.62% after trading in a range of 24524.76 and 24347.78. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices too extended gains; the BSE Mid cap index was up by 2.29%, while Small cap index up by 2.47%.

The gaining sectoral indices on the BSE were Consumer Durables up by 7.41%, Realty up by 6.04%, Metal up by 2.30%, Power up by 2.22% and PSU up by 2.00%. On the flip side, TECK down by 0.27% and IT down by 0.12% were the only losing indices on BSE.    

The top gainers on the Sensex were Coal India up by 6.68%, NTPC up by 4.49%, Maruti Suzuki up by 4.16%, SSLT up by 3.57% and RIL up by 2.61%. On the flip side, Bharti Airtel down by 1.64%, HDFC Bank down by 1.22%, Wipro down by 1.04%, Infosys down by 1.00% and BHEL down by 0.92%.

Meanwhile, Indian economy is likely to grow at 5 percent in 2014 and record a slightly higher expansion of 5.5 percent in 2015 on the back of stronger consumption and investment, according to the UN World Economic Situation and Prospects (WESP) 2014 report.

At present, Indian economy is struggling with slowdown and its growth slowed down to a decade low at 4.5 percent in FY13 and 4.6 percent during the first three quarter of FY14. The factors like high interest rates, low investments and slow execution of infrastructure projects have been impacting the domestic economy. Indian economy’s growth is likely to remain at sub-5% level in FY14.

The UN report highlighted that average economic growth in the South Asian region is projected to pick up gradually to 4.6 percent in 2014 and 5.1 percent in 2015, up from near a two-decade low at 3.9 percent in 2013. The report added that several of the region's economies, including India have been witnessing significant improvement on macro- economic front. Further, moderating inflation, improving external balances and strengthening currencies are likely to provide impetus to these regional economies in the coming time. External demand is also projected to improve in 2014-15 as economic activity in developed economies gains momentum. However, structural impediments, including energy and transport constraints, political unrest and violence will remain major concerns to growth for South Asian regional countries. 

Further, the report added that global economy is expected to strengthen over the next two years, despite a downgrade of growth prospects for some developing economies. Growth of world gross product (WGP) is projected at 2.8 percent in 2014 and 3.2 percent in 2015, up from 2.2 percent in 2013. It noted that for the first time since 2011, the developed economies are all aligned towards positive economic growth over the next two years. Growth in developed economies is projected at 2 percent in 2014 and 2.4 percent in 2015.

The CNX Nifty is currently trading at 7,296.45, up by 43.55 points or 0.60% after trading in a range of 7,319.55 and 7,258.15. There were 29 stocks advancing against 21 declining on the index.

The top gainers of the Nifty were DLF up by 10.19%, Coal India up by 5.31%, Maruti Suzuki up by 4.46%, NTPC up by 4.43% and SSLT up by 4.11%. On the flip side, Hindalco down by 2.41%, BHEL down by 2.38%, HDFC down by 1.78%, Bharti Airtel down by 1.75% and Tata Motors down by 1.59% were the major losers on the index.

Asian equity indices were trading in green; Nikkei 225 up by 2.11%, Jakarta Index up by 1.19%, Taiwan Weighted up by 1.21% and Hang Seng added 0.51%. On the other hand, Straits Times down 0.04% and  Shanghai Composite lost 0.18%.

The European markets were trading mostly in green; France’s CAC 40 was down by 0.02%, Germany’s DAX added 0.22% while UK’s FTSE 100 gained 0.19%.