Benchmarks hold modest gains after recovering from day’s low; Nifty trades above 7, 700 level

After recovering from day’s low, benchmark equity indices were holding their fort firmly in positive territory and trading up with modest gains of around 0.10%-0.20%, which lifted both Sensex and Nifty above the psychologically crucial 25,900 and 7,700 levels respectively. However, broader indices reflecting somber mood, were down and out with cut of over 1.25%.

Sentiments were bolstered global rating agency Moody’s forecasted better outlook for Indian economy and pegged country’s GDP to grow by 5% this year to further accelerate by 5.5%-5.6% in 2015, while reports suggesting Finance Ministry’s discussions with the state governments on Goods and Service Tax (GST) in the final stages, also added to the upbeat mood.

Besides, investors also drew a heart after Nomura raised BSE Sensex target to 30,310 by end of August 2015. However, further gains of local barometer gauges were capped on account of dismal set of macro-economic data released after market closed on Tuesday. Limiting central bank’s scope for easing policy rates, provisional annual inflation rate based on all India general Consumer Price Index (CPI) (Combined) rose more than expected at 7.96% in July as compared to 29 months low of 7.31% in June and 9.64% in the July, 2013, while contradicting indications of strong recovery in domestic economic growth, country’s annual industrial output growth, measured by index of industrial production (IIP), slowed down to 3.4% y-o-y in the month of June as compared to 4.7% in May.

On the global front, receiving a positive handover from regional-counterparts, European shares got off to a positive start. Meanwhile, Asian shares eked out modest gains on Wednesday, as investors remained cautious after downbeat data from China and Japan and as the crisis in Ukraine threatened a fragile economic recovery in Europe.

Closer home, most of the sectoral indices on BSE were reeling under pressure, stocks from Fast Moving Consumer Goods, Information Technology and Oil & Gas counters were endorsing the underlying strength of local equity markets. On the flip side, much of drubbing was witnessed by stocks from Realty, Capital Goods and Power counters, which were topping the list of top losers on BSE. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1691:865; while 73 shares remained unchanged.

The BSE Sensex is currently trading at 25929.27, up by 48.50 points or 0.19% after trading in a range of 25850.51 and 25972.62. There were 14 stocks advancing against 16 stocks declining on the index.The broader indices were trading in red; the BSE Mid cap index was down by 1.18%, while Small cap index down by 1.34%.

The gaining sectoral indices on the BSE were FMCG up by 2.00%, IT up by 1.34%, TECK up by 0.80%, Oil & Gas up by 0.20% while, Realty down by 3.22%, Capital Goods down by 2.44%, Power down by 2.14%, Consumer Durables down by 1.44%, INFRA down by 1.37% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 2.58%, Hindustan Unilever up by 2.20%, TCS up by 2.03%, Sun Pharma Inds. up by 1.56% and Wipro up by 1.25%. On the flip side, BHEL down by 7.20%, Tata Power down by 2.53%, Larsen & Toubro down by 2.13%, Hindalco down by 2.10% and Coal India down by 1.93% were the top losers.

Meanwhile, in its report titled 'Global Macro Outlook 2014-15: Summer Lull: Subdued, but less risky global growth Likely', global rating agency, Moody’s has projected a better growth outlook for India and forecasted country’s GDP to grow by 5% this year. The higher growth projection for India comes against the backdrop of a new government coming to power with single majority for the first time in three decades.

The agency has held robust growth outlook for both Indonesia and India and expects both the countries’ GDP to grow around 5% this year and 5.5%-5.6% in 2015. However, the rating agency’s forecast on country’s growth forecast still remained way lower than the level witnessed before global crisis. Besides, it is also short of new government’s target to raise the growth of 7.8% by 2017-18. Further, Moody's also expects India and Indonesia to see more resilient GDP growth.

Specifically for India, the agency highlighted global slowdown along with sluggish domestic economic activities, high interest rates and stubborn inflation were some of the factor that pulled down India's growth to sub 5% in the last two years. After recovering in 2009-10 and 2010-11, GDP growth sunk to decade's low of 4.5% in 2012-13 and marginally picked up to 4.7% in 2013-14.

The CNX Nifty is currently trading at 7735.55, up by 8.50 points or 0.11% after trading in a range of 7711.80 and 7757.10. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.10%, HCL Tech. up by 2.63%, ITC up by 2.46%, Hindustan Unilever up by 2.23% and TCS up by 2.13%. On the flip side, BHEL down by 7.63%, Bank of Baroda down by 3.84%, DLF down by 3.41%, Tata Power down by 2.85% and PNB down by 2.44% were the top losers.

Asian markets were trading mostly higher; with FTSE Bursa Malaysia KLCI rising by 2.89 points or 0.16% to 1,853.28; Jakarta Composite gaining by 9.97 points or 0.19% to 5,142.37; Hang Seng adding 12.06 points or 0.05% to 24,701.47; KOSPI Index advancing by 20.89 points or 1.02% to 2,062.36; Nikkei 225 inching higher by 52.32 points or 0.35% to 15,213.63; Taiwan Weighted accumulating 68.19 points or 0.74% to 9,231.31. On the flip side, Straits Times down by 6.27 points or 0.19% to 3,297.12 and Shanghai Composite down by 0.83 points or 0.04% to 2,220.76 were the losers.

European markets got off to a positive start; with Germany’s DAX adding 111.27 points or 1.21% to 9,069.47; France’s CAC gaining 27.11 points or 0.65% to 4,189.27 and  UK’s FTSE 100 rising 7.93 points or 0.12% to 6,640.35.