Markets continue to trade marginally in green

Indian equity benchmarks continued to trade marginally in green in the afternoon session as bargain hunting was seen in blue chip-stocks after a sharp fall in previous session. Though, most of major indices were trading in green, selling in IT, teck and banking stocks capped the market gains. Sentiments got some support as IMF has said that increasing investment over the past few months is providing impetus to economy and potential growth rate could go up over time. Further, Prime Minister Narendra Modi's statement that containing inflation is the top priority of government and will soon take measures to check price rise particularly in food items also added to the optimistic sentiments. However, there was some cautiousness among investors ahead of major economic data such as industrial production (IIP) and consumer inflation (CPI) to be announced after the market hours. Oil and Gas was the top gaining index on BSE up by 0.61% followed by metal and healthcare stock both trading up by 0.50%. Buying was broad based with small cap and mid cap indices trading up by over 0.40%.

Strides Arcolab, extending its previous day’s over 1% gain, was trading higher by around 4% to Rs 643, after foreign institutional investors (FIIs) have bought nearly 1 percentage points of stake in pharmaceutical company through open market transactions. VA Tech Wabag has soared almost 18% to Rs 1,450, also its new high on bourses, on back of heavy volumes. On the other hand, Bharti Airtel was the top loser on domestic bourses down by around 3% to Rs 344 as brokerage lowered share price target.

On global front, Asian equity indices were trading in red with Shanghai Composite down by 0.14% and Hang Seng down by 0.33% as Wall Street shares stepped back from record levels while civil war in Iraq supported oil prices. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 7,600 and 25,500 levels respectively. The market breadth on BSE was negative, out of 2,744 stocks traded, 1,511 stocks advanced, while 1,144 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,532.15 up by 58.26 points or 0.23% after trading in a range of 25,611.32 and 25,409.69. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were Oil and Gas up by 0.61%, Metal up by 0.57%, Healthcare up by 0.52%, Consumer Durables up by 0.46% and Power up by 0.25%. On the flip side, Teck down by 0.45%, IT down by 0.28%, Bankex down by 0.14% and FMCG down by 0.05% were the losing indices on BSE.    

The top gainers on the Sensex were Hindalco Inds up by 2.89%, HDFC Bank up by 1.96%, HDFC up by 1.92%, ONGC up by 1.63% and Cipla up by 1.14%. On the flip side, Bharti Airtel down by 2.72%, Axis Bank down by 1.83%, Coal India down by 1.61%, ICICI Bank down by 1.17% and Infosys down by 0.68% were the top losers on the BSE.

Meanwhile, according to the International Monetary Fund (IMF), Indian economy is recovering to its potential growth rate at 6.75 to 7 percent. IMF’s Senior Resident Representative Thomas J Richardson has said that increasing investment over the past few months is providing impetus to economy and potential growth rate could go up over time. However, the IMF does not see any immediate V-shaped recovery for India.

T J Richardson further stated that India need to contain high inflation, which has been impeding the business sentiments in the country. To strengthen economic growth, India should continue to gradually bring down the fiscal deficit and usher in fuel subsidy reforms. Further, IMF’s Official said that it is important for India to continue the gradual process of bringing down fiscal deficit which will help reduce vulnerability to external shocks and make India more durable for international investors as well as for domestic investors. India’s fiscal deficit is likely to contain at 4.5 percent of GDP in the financial year 14, as compared to 4.89 percent of GDP in the FY13. T J Richardson suggested that in order to bring down the fiscal deficit, India’s government should implement subsidy reform in a way that it would not aggressively affect growth and broaden the tax base without adversely affecting business climate.

The IMF has projected the Indian economy’s growth at 5.4 percent in the current financial year and pick up to 6.3 percent in the next fiscal. Presently, India's economic growth stayed below 5 percent for the second year in a row at 4.7 percent during FY14. The factors like high interest rates, low investments and slow execution of infrastructure projects have been impacting economy’s growth.

The CNX Nifty is currently trading at 7,634.30 up by 7.45 points or 0.10% after trading in a range of 7,652.10 and 7,593.80. There were 25 stocks advancing against 25 declining on the index.

The top gainers of the Nifty were Hindalco Inds up by 3.07%, HDFC Bank up by 2.07%, HDFC up by 1.84%, ONGC up by 1.64% and Jindal Steel up by 1.62%. On the flip side, Bharti Airtel down by 3.01%, Axis Bank down by 1.81%, Coal India down by 1.71%, Indusind Bank down by 1.49% and ICICI Bank down by 1.24% were the major losers on the index.

Asian equity indices were trading in red; Shanghai Composite down by 0.14% to 2,052.80, Hang Seng down by 0.33% to 23,180.54, Jakarta Stock Index down by 0.75% to 4,934.62, Nikkei down by 0.63% to 14,975.52 and Taiwan Weighted down by 0.27% to 9,204.65. While, Straits Times up by 0.08% to 3,292.10