Benchmarks bounce off day’s low; hold above water with slender gains

Bouncing off day’s low, benchmark equity indices are managing to keep their head above water, with slender gains of around one tenth of a percent, which lifted both Sensex and Nifty above psychologically crucial 27,100 and 8,100 levels respectively. Meanwhile, broader indices outperforming larger peers were trading with gains in the range of 0.30%-0.45%. Gains in Indian markets tracked higher Asian markets which were boosted after the Scottish independence vote indicated Scotland would remain in the United Kingdom. However, profit-booking which came after previous session’s up-run capped bourses’ further upmove.

Sectorally, much of the demand was witnessed by Information Technology, Technology and Consumer Durables counters. On the flip side, much of the drubbing was witnessed by Capital Goods counters, followed by Realty and Fast Moving Consumer Goods space. IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. The gains of the counter was led by Tech Mahindra shares, which rallied 2% after the company announced that it will work together with Bosch Software Innovations to develop an ecosystem to enable innovative solutions for the connected world and connected enterprises. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 996:893; while 18 shares remained unchanged.

The BSE Sensex is currently trading at 27140.26, up by 28.05 points or 0.10% after trading in a range of 27055.04 and 27247.17. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index up by 0.43%.

The gaining sectoral indices on the BSE were IT up by 1.93%, TECK up by 1.42%, Consumer Durables up by 0.10% while, Capital Goods down by 1.21%, Realty down by 0.63%, FMCG down by 0.40%, Auto down by 0.39%, Bankex down by 0.25% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.18%, Sun Pharma Inds. up by 1.56%, Cipla up by 1.32%, Wipro up by 1.20% and Tata Power up by 1.14%. On the flip side, Larsen & Toubro down by 1.58%, Hindustan Unilever down by 1.47%, Axis Bank down by 1.31%, Hero MotoCorp down by 1.17% and BHEL down by 1.07% were the top losers.

Meanwhile, in a vigilant exercise to safe-guard the country from external shocks, India pitched the need to actively explore currency swap agreements to all the fellow emerging economies at the meeting of G-20 deputies in Cairns, Australia, on Thursday, in a joint solution to mitigate risks which the emerging economies face as the US gradually winds down its stimulus programme.

Finance secretary Arvind Mayaram at the gathering of finance ministers and central bankers, pressed upon the need for IMF to analyze upon the costs and the benefits that these swaps would bring if they were put in place and evaluate the loss on GDP in the face of exogenous shocks, in scanerio of both absence and presence of these swaps.

Further, Mayaram highlighted that if swap facilities would be utilized, the benefits would include a reduction in the negative shock to EMs and global GDP. Adding that the benefits to the global financial system could potentially be large as it would reduce the amount of self-insurance that countries would otherwise require.

Noting that the QE policy has had an impact on the currency markets of many of the emerging market economies Finance Secretary Arvind Mayaram has suggested currency swap lines among G20 nations. Further, testifying these views, the finance secretary underscored that the decisions on the exit from the QE programme that came in after the US Federal Reserve's meeting yesterday also had an impact on the currency markets of many of the emerging market economies. After the meeting, the US Federal Reserve decided to continue with near-zero interest rate regime and has cut down on asset purchases. However, he did not provide a specific time frame on when the interest rates could be hiked.

Lastly, stressing upon the need of uncertainty and volatility in external environment, Mayaram asserted that it was imperative the emerging market economies, including India, continued the path of structural reforms and the solution to this problem required their attention. He added that strength of G20 lied in taking international collaborative actions and not limiting to the individual country growth strategies.The CNX Nifty is currently trading at 8124.55, up by 9.80 points or 0.12% after trading in a range of 8105.35 and 8160.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 3.10%, TCS up by 2.97%, Grasim Industries up by 2.32%, Tech Mahindra up by 2.04% and Sun Pharma Inds. up by 1.48%. On the flip side, Bank Of Baroda down by 1.98%, Larsen & Toubro down by 1.91%, Jindal Steel & Power down by 1.88%, DLF down by 1.88% and PNB down by 1.62% were the top losers.

Asian markets were trading in fine fettle; Taiwan Weighted were up by 3.42 points or 0.04% to 9,240.45; FTSE Bursa Malaysia KLCI were up by 5.91 points or 0.32% to 1,851.23; KOSPI Index were up by 6.08 points or 0.3% to 2,053.82; Straits Times were up by 10.95 points or 0.33% to 3,308.24; Shanghai Composite were up by 11.61 points or 0.5% to 2,327.54; Jakarta Composite were up by 35.73 points or 0.69% to 5,243.88; Hang Seng were up by 204.86 points or 0.85% to 24,373.58 and Nikkei 225 were up by 253.6 points or 1.58% to 16,321.17.