Benchmarks continue to trade in green in late morning session

After getting a gap-up start, benchmark equity indices continued to trade in fine fettle in late morning deals on continued buying activities by both funds and retail investors. Sentiments got a boost after Reserve Bank of India (RBI) stated that the Indian economic growth is poised for a take-off amid signs of economic reforms, fiscal consolidation and projected improvement in investments. The central bank forecasted the gross domestic product (GDP) to grow at around 5.5% in 2014-15 after two painful years of sub-5% growth. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 412.77 crore on August 21, 2014.

On BSE Sectoral front, stocks from Oil & Gas, Bankex and Metal counters were supporting the markets’ uptrend, while those from Realty, Healthcare and FMCG counters were adding to the underlying cautious undertone.  Besides, shares of sugar manufactures were trading higher by up to 7% on reports that the government may give some relaxations to the sugar industry after the WTO rejected India's contention on raw sugar export subsidy. In scrip specific development, Ranbaxy Laboratories has declined after news reports that the company will have to pay a Rs 242 crore fine to the US authorities for alleged violations at its Active Pharmaceutical Ingredient (API) manufacturing factory in Toansa, Punjab. On the other hand, SpiceJet rose after its board approved issuing Rs 18.91 crore convertible warrants to the promoter of the company.

On global front, Asian markets rose after upbeat US data sparked another record close on Wall Street. US home resales raced to a 10-month high in July and the number of Americans filing new claims for jobless benefits fell last week, signaling strength in the US economy. Back home, India’s rupee hit a three-week high against the dollar tracking gains in Asian currencies markets and also on increased optimism that FPIs will continue to invest in India in the short term. The market breadth on BSE was positive, out of 2238 stocks traded, 1241 stocks advanced, while 915 stocks declined on the BSE.  

The BSE Sensex is currently trading at 26454.59 up by 94.48 points or 0.36% after trading in a range of 26483.10 and 26419.53. 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 0.31%, while Small cap index gained 0.25%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.98%, Bankex up by 0.76%, Metal up by 0.75%, IT up by 0.74% and PSU was up by 0.63% while, Realty down by 0.67%, Healthcare down by 0.23%, FMCG down by 0.19%, Power down by 0.12% and Infrastructure down by 0.04% were the top losers loser on BSE Sectoral front.

The top gainers on the Sensex were Hindalco up by 2.11%, SBI up by 1.83%, ONGC up by 1.82%, SSLT up by 1.67% and Axis Bank was up by 1.29%. On the flip side, Sun Pharma Industries down by 1.03%, HDFC down by 0.93%, Bharti Airtel down by 0.84%, Coal India down by 0.64% and Bajaj-Auto was down by 0.63% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) stated that Indian economy is likely to grow at 5.5 percent in the current fiscal. The RBI, in its annual report for 2013-14 (year ended June 30), affirmed that economy is emerging from recession with signs of improvement in mining and manufacturing activity, reversal in the corporate investment cycle, improved external demand, stabilizing global commodity along with improvement in macroeconomic pointers like fiscal deficit and inflation.

The RBI report further highlighted that forward-looking surveys and economic indicators along with rising business confidence indicated that private corporate investment is likely to surge in coming future. The central bank’s forecast is unchanged from the prediction earlier this year, however below the predictions of the government, which is expecting the economy to expand by 5.8 percent this financial year.

On weak monsoon, the RBI has stressed that the impact of weak monsoon this fiscal on India's farm production and economy is likely to be limited as rainfall levels have improved considerably over the past month. As of August 13, the all-India cumulative rainfall deficiency was reported at 18 percent of the long period average (LPA) as against an excess of 12 percent in the same period last year. This has been a marked improvement in the monsoon- since July 13 when the deficiency was 43 percent of LPA. On the inflation front, the central bank emphasized that CPI increased to 8 percent in July as prices of vegetables increased substantially on the back of deficient monsoon rainfall. However, vegetable prices' spike could be temporary as there are early indications that the price corrections are underway.

The CNX Nifty is currently trading at 7,913.30 up by 22.20 points or 0.28% after trading in a range of 7,924.90 and 7,903.60. There were 32 stocks advancing against 18 declining on the index.

The top gainers on Nifty were PNB up by 2.23%, Hindalco up by 2.02%, SBI up by 1.84%, ONGC up by 1.74% and SSLT was up by 1.71%. On the flip side, United Spirits down by 3.57%, Sun Pharma down by 1.36%, Power Grid down by 1.06%, HDFC down by 1.02% and Bharti Airtel was down by 0.81% were the top losers.

Asian markets were trading mostly in the green; Shanghai Composite strengthen by 0.32%, KOSPI Index Rose by 0.38%, Hang Seng added 0.35%, Straits Times surged 0.24% and Taiwan Weighted was up  by 1.28%. On the flip side, Nikkei 225  crumbled by 0.23%, FTSE Bursa Malaysia KLCI declined by 0.01% and Jakarta Composite was down by 0.36%.