Benchmarks trim gains; trade continues in green

Indian equity benchmarks trimmed some gains, however continued to trade above neutral line in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on optimistic mood from the early trades after Finance Secretary Arvind Mayaram, expressing his confidence and assuring the global community in the G20 Deputies Meeting stated that India is following economic growth inducing policies and is confident that the GDP will rebound to over 7% in 2-3 years. Additional, Scotland’s decision to vote ‘No’ to independence from the United Kingdom further added some optimism on the street. Traders were seen piling positions in IT, TECK and Consumer Durables while selling was witnessed in Capital Goods, FMCG and Realty sector stocks. In scrip specific development, Biocon was trading firm after Silver Leaf Oak (Mauritius) agreed to acquire a minority 10 percent stake in Syngene International, the subsidiary of the company’s Research Services.

On the global front, the Asian markets were trading in green while the European markets too traded on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above psychological 8,100 and 27,100 levels respectively. The market breadth on BSE was positive in the ratio of 1465:1435 while 96 scrips remained unchanged.

The BSE Sensex is currently trading at 27136.06, up by 23.85 points or 0.09% after trading in a range of 27055.04 and 27247.17. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.23%, while Small cap index up by 0.78%.

The gaining sectoral indices on the BSE were IT up by 2.04%, TECK up by 1.60%, Consumer Durables up by 0.08%, Metal up by 0.02% while, Capital Goods down by 1.30%, FMCG down by 0.66%, Realty down by 0.45%, Auto down by 0.29%, Oil & Gas down by 0.29% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 3.19%, Cipla up by 2.31%, Hindalco up by 1.59%, Dr. Reddy’s Lab up by 1.45% and Wipro up by 1.35%. On the flip side, Hindustan Unilever down by 2.47%, Larsen & Toubro down by 1.77%, Hero MotoCorp down by 1.14%, Axis Bank down by 1.01% and Mahindra & Mahindra down by 0.85% 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 8136.05, up by 21.30 points or 0.26% after trading in a range of 8105.35 and 8160.90. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were TCS up by 3.12%, HCL Technologies up by 2.57%, Cipla up by 2.41%, Grasim Industries up by 2.32% and Tech Mahindra up by 2.17%. On the flip side, Hindustan Unilever down by 2.37%, Larsen & Toubro down by 1.71%, Jindal Steel & Power down by 1.34%, DLF down by 1.17% and Hero MotoCorp down by 1.09% were the top losers.

The Asian markets were trading in green; Taiwan Weighted up 3.42 points or 0.04% to 9,240.45, KOSPI Index up 6.08 points or 0.3% to 2,053.82, FTSE Bursa Malaysia KLCI up 6.43 points or 0.35% to 1,851.75, Straits Times up 8.81 points or 0.27% to 3,306.10, Shanghai Composite up 13.52 points or 0.58% to 2,329.45, Jakarta Composite up 31.11 points or 0.6% to 5,239.25, Hang Seng up 137.44 points or 0.57% to 24,306.16 and Nikkei 225 up 253.6 points or 1.58% to 16,321.17.

The European markets were too trading on optimistic note; France’s CAC up 18.18 points or 0.41% to 4,482.88, Germany’s DAX up 74.63 points or 0.76% to 9,872.76 and UK’s FTSE 100 up 47.5 points or 0.7% to 6,866.79.