Benchmarks add more ground after positive start of European equities

Buoyed by the positive start of European equities, local equity markets adding ground are now trading with modest gains of around two tenths of a percent, which has lifted Sensex above psychologically crucial 27,150 level and Nifty little short of the crucial 8150 level. Meanwhile, broader indices continuing to outperform larger peers with fat margins are trading with gains in the range of 0.30%-0.65%. On the global front, European shares, receiving a positive handover from Asian counterparts, surged higher early on Friday, buoyed by gains on the UK stock market which rose after Scotland's decision to vote 'No' to independence from the United Kingdom.

Closer home, nevertheless hopes of continued foreign fund inflows, also were aiding the sentiment. Stocks exchange data suggests that overseas investors bought index futures worth $ 106.22 million on Thursday. Sectorally, while most of the sectoral indices on BSE were reeling under pressure, only stocks from Information Technology, Technology and Healthcare counters showcasing resilience were endorsing the underlying strength of the bourses. On the flip side, Capital Goods, Realty and Fast Moving Consumer Goods counters were the prominent losers of the session. Exporters shares gained on hopes they were better placed to weather any Fed-related volatility, additionally gains have been also spurred by TCS stocks, which gained 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 advances which thumped declines in the ratio of 1405:1372; while 89 shares remained unchanged.

The BSE Sensex is currently trading at 27170.74, up by 58.53 points or 0.22% 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 0.33%, while Small cap index up by 0.65%.

The gaining sectoral indices on the BSE were IT up by 2.31%, TECK up by 1.78% and Healthcare up by1.12%. On the flip side, Capital Goods down by 1.32%, Realty down by 0.80%, FMCG down by 0.42%, Bankex down by 0.22% and Auto down by 0.14% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.31%, Sun Pharma Inds. up by 2.07%, Cipla up by 1.81%, Infosys up by 1.74% and Wipro up by 1.44%. On the flip side, Larsen & Toubro down by 1.76%, Hindustan Unilever down by 1.41%, Axis Bank down by 1.32%, Hero MotoCorp down by 1.12% and GAIL India down by 1.08% 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 8141.85, up by 27.10 points or 0.33% after trading in a range of 8105.35 and 8160.90. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were TCS up by 3.13%, HCL Tech up by 2.72%, Grasim Industries up by 2.32%, Sun Pharma up by 2.20% and Tech Mahindra up by 2.20%. On the flip side, Larsen & Toubro down by 1.73%, Bank Of Baroda down by 1.65%, DLF down by 1.65%, PNB down by 1.49% and Hindustan Unilever down by 1.34% were the top losers.

Asian markets were set for a positive close; with Taiwan Weighted trading higher by 3.42 points or 0.04% to 9,240.45; KOSPI Index trading higher 6.08 points or 0.3% to 2,053.82; FTSE Bursa Malaysia KLCI trading higher 6.62 points or 0.36% to 1,851.94; Shanghai Composite trading higher 11.97 points or 0.52% to 2,327.90; Straits Times trading higher 12.22 points or 0.37% to 3,309.51; Jakarta Composite trading higher 35.73 points or 0.69% to 5,243.88; Hang Seng trading higher 218.51 points or 0.9% to 24,387.23 and Nikkei 225 trading higher 253.6 points or 1.58% to 16,321.17.

European markets too were trading in green; with France’s CAC were trading higher by 25.13 points or 0.56% to 4,489.83; UK’s FTSE 100 edging higher by 46.6 points or 0.68% to 6,865.89 and Germany’s DAX rallying 52.32 points or 0.53% to 9,850.45.