Benchmarks trade with vigor; scale fresh record high levels in intra-day trade

Going from strength to strength, local equity markets were trading at fresh record high levels as sentiment remained comforted after Balance Of Payments (BoP) data released on Monday evening showed it in surplus for the third straight quarter and Current Account Deficit despite widening remained well within limits. On the macro-front, the balance of payments registered a surplus of $11.2 billion during April-June, up from $7.1 billion in the January-March quarter, data from the Reserve Bank of India (RBI) showed, while Current Account Deficit for April-June stood at $7.8 billion, sharply higher than $1.3 billion in January-March but narrower from $21.8 billion a year ago. Additionally, Positive global cues also were supporting bourses which were trading at day’s high level, which took Sensex and Nifty above psychologically crucial 26950 and 8,050 levels respectively, with gains over half a percent.

On the global front, receiving a positive hand over from Asian counterparts, European shares got off to a slightly higher start even as investors awaited the European Central Bank's policy decision later this week before chasing stocks higher. Dovish comments by ECB President Mario Draghi in late August sparked market bets that the central bank is preparing to pump more liquidity into the system, possibly via purchases of government or corporate bonds, a measure known as quantitative easing (QE).

Closer home, with most of the sectoral indices on BSE were trading in mostly positive terrain, only stocks from Metal counter turned out to be exception after reports suggested that government told Supreme Court that it would want to re-auction all 218 coal blocks declared as “illegal allocation. On the flip side, stocks from Infra, Realty and Consumer Durable counters were the top gainers of the session. Meanwhile, pharma stocks also were in demand, with stocks of Cipla scaling a 52 week high level after the drugmaker launched an anti-asthma inhaler in Germany and Sweden. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 1279:598; while 48 shares remained unchanged.

The BSE Sensex is currently trading at 26987.78, up by 120.23 points or 0.45% after trading in a range of 26886.22 and 26999.97. 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 1.07%, while Small cap index up by 1.15%.

The gaining sectoral indices on the BSE were Infra up by 1.25%, Realty up by 1.18%, Consumer Durables up by 1.01%, TECK up by 0.66% and Bankex up by 0.60% while, Metal down by 0.61% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 6.38%, Bharti Airtel up by 3.74%, Sun Pharma Inds. up by 2.66%, HDFC Bank up by 1.94% and Hero MotoCorp up by 1.80%. On the flip side, Sesa Sterlite down by 1.34%, Hindustan Unilever down by 1.20%, Tata Motors down by 0.90%, Tata Steel down by 0.75% and Infosys down by 0.59% were the top losers.

Meanwhile, easing pressure on country’s external sector as well as domestic currency, India’s current account deficit (CAD) narrowed sharply to $7.8 billion (1.7% of GDP) in the first quarter of current fiscal from $21.8 billion (4.8% of GDP) in Q1FY14. The lower CAD was primarily on account of a contraction in trade deficit driven by both a rise in exports and a decline in imports. However, the CAD in Q1FY15 was higher than $1.2 billion (0.2 per cent of GDP) recorded in Q4FY14.

Merchandise exports grew by 10.6% y-o-y to $81.7 billion in Q1FY15 as against a decline of 1.5% in Q1FY14. Conversely, merchandise imports declined by 6.5% to $116.4 billion as against an increase of 4.7% in Q1FY14 primarily led by a steep drop of 57.2% in gold imports, which amounted to $7 billion in the reported quarter, significantly lower than $16.5 billion in the same quarter of previous fiscal. Consequently, trade deficit contracted by about 31.4% to $34.6 billion in Q1FY15 from $50.5 billion in Q1FY14.

Net services receipts recorded a growth of 1.2% y-o-y to $17.1 billion in Q1FY15 on account of higher exports of services. However, net outflow on account of primary income (profit, dividend and interest) recorded at $6.7 billion was higher than that of $4.8 billion in Q1FY14 as well as in the preceding quarter at $6.4 billion. In Q1 FY15, gross private transfer receipts at $17.5 billion were marginally lower as compared to Q1FY14, which witnessed a significant increase of around 6% over the preceding quarter due to rupee depreciation. Net portfolio investment inflow was recorded at $12.4 billion in Q1FY15 as against an outflow of $0.2 billion in Q1FY14.

The significant curtailing of country’s CAD has eased pressure on macro-economic front as it is a major macro-economic problem that creates huge volatility in the domestic equity markets and currency. The improvement in CAD is likely to continue in the new fiscal year mainly on the back of contracting trade deficit and increasing foreign exchange reserves.

The CNX Nifty is currently trading at 8071.15, up by 43.45 points or 0.54% after trading in a range of 8036.55 and 8072.45. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Cipla up by 6.58%, Grasim Industries up by 4.08%, Bharti Airtel up by 3.89%, Ultratech Cement up by 3.27% and DLF up by 2.81%. On the flip side, Jindal Steel & Power down by 1.88%, Sesa Sterlite down by 1.50%, Hindustan Unilever down by 1.17%, Tata Motors down by 0.97% and Asian Paints down by 0.83% were the top losers.

Asian markets were mostly trading higher; FTSE Bursa Malaysia KLCI rose by 1.27 points or 0.07% to 1,867.38; Straits Times added 16.01 points or 0.48% to 3,330.14; Jakarta Composite gained 18.52 points or 0.36% to 5,196.14; Shanghai Composite rallied 29.02 points or 1.3% to 2,264.53; Hang Seng inched higher by 32.3 points or 0.13% to 24,784.39 and Nikkei 225 spurted by 192 points or 1.24% to 15,668.60. On the flip side, Taiwan Weighted down by 113.34 points or 1.19% to 9,399.72 and KOSPI Index edged lower by 16.28 points or 0.79% to 2,051.58.

European markets got off to a slightly higher start; with UK’s FTSE 100 rising by 5.56 points or 0.08% to 6,825.31; Germany’s DAX gaining by 8.86 points or 0.09% to 9,479.03, while France’s CAC were trading lower by 1.31 points or 0.03% to 4,379.73