Benchmarks hold head above water; Nifty trades above 7,950 mark

Benchmark equity indices after reversing gears into positive territory, were holding their heads above water albeit with slender gains of over one tenth of a percent, which lifted both Sensex and Nifty above psychologically crucial 26,650 and 7,950 levels respectively. Nevertheless, broader indices outperforming their larger counterparts by fat margins were trading higher with gains of over 1.10%-1.60%. The sentiment remained upbeat after Standard & Poor (S&P’s) reversing the stance it took two years ago, lifted India’s rating outlook to 'stable' from 'negative', in a validation of Prime Minister Narendra Modi's ambitious agenda of economic and fiscal reforms. However, prevailing caution ahead of RBI’s fourth bi-monthly monetary policy review amidst sluggish regional counterparts, limited any kind of bourses’ uptrend. Reports suggest that India’s apex bank is likely to hold the key interest rate in its policy review and is expected to lower them from February only.

On the global front, Asian markets were mixed on Monday with Hong Kong tumbling more than two per cent after a weekend of unrest as pro-democracy demonstrations led to the closure of parts of the southern Chinese city. Meanwhile, European shares got off to a weak start on Monday as unrest in Hong Kong capped a tentative rebound from the previous week's losses.

Closer home, most of the sectoral indices on BSE were reflective of the positive trend of the markets, however stocks from Metal, Fast Moving Consumer Goods and Banking counters were the top losers of the session. Metal and mining stocks declined as latest data reaffirmed slowdown in China, the world's largest consumer of steel, copper and aluminum. On the flip side, maximum demand was witnessed by stocks from Healthcare, followed by Consumer Durables and Information Technology counters which were the prominent gainers of the session. While, Pharma stocks  gained on weaker rupee, gains of capital Goods sector was led by L&T shares that rose after company’s Metallurgical and Material Handling (MMH) business secured new orders worth Rs 2030 crore in the steel, port and bulk material handling sectors. The overall market breadth on BSE was in the favour of advances which outpaced declines in the ratio of 1371:558; while 28 shares remained unchanged.

The BSE Sensex is currently trading at 26685.27, up by 58.95 points or 0.22% after trading in a range of 26539.69 and 26709.15. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.16%, while Small cap index up by 1.71%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.82%, IT up by 1.72%, TECK up by 1.44%, Capital Goods up by 0.56% and Power up by 0.54% while, Metal down by 1.02%, FMCG down by 0.79%, Bankex down by 0.28% and Auto down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 3.36%, TCS up by 2.71%, BHEL up by 1.85%, Infosys up by 1.79% and GAIL India up by 1.47%. On the flip side, Hindalco down by 1.87%, Hindustan Unilever down by 1.22%, Coal India down by 1.12%, Tata Steel down by 1.11% and ITC down by 1.01% were the top losers.

Meanwhile, in consultation with Reserve Bank of India, the government has trimmed down its annual market borrowing by Rs 8000 crore and decided to borrow Rs 2.40 lakh crore in the next six months starting October 1, against the budget estimate of Rs 2.48 lakh crore. Together with Rs 3.52 lakh crore during the first six months (April-September), the total borrowings for this fiscal stands at Rs 5.92 lakh crore, against the Budget estimate of Rs 6 lakh crore.

Further, these market borrowings will be made through long-term dated securities, which would have a maturity period of more than 1 year and go up to 30 years. This instrument would carry a fixed or floating interest rate, payable at fixed time periods (usually half-yearly), and will be tradable in the market. Apart from banks and foreign institutions, retail individuals too could invest in such instruments.

Earlier too, the government in the first half of the fiscal, borrowed Rs 3.52 lakh crore, which was 16,000 crore less than planned on account of comfortable cash position and so estimated the second half borrowing to be at Rs 2.48 lakh crore. However, with positive indications on the revenue front, especially non-tax revenues, as also expectations of lower expenditure on subsidies, the government trimmed down its borrowing for second half of the fiscal.

Also, in good news, Finance Secretary underscored that regardless of the cut in the market borrowing, the government was sticking to its fiscal target of 4.1% of the GDP for FY2014-15. Thus, with lower borrowings, this could go well below 4%, which is a good sign for sovereign ratings.

The CNX Nifty is currently trading at 7981.55, up by 12.70 points or 0.16% after trading in a range of 7937.80 and 7987.60. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.26%, TCS up by 2.72%, BPCL up by 2.32%, Infosys up by 1.82% and BHEL up by 1.73%. On the flip side, Jindal Steel & Power down by 2.69%, Hindalco down by 1.78%, Kotak Mahindra Bank down by 1.40%, Cairn India down by 1.33% and NMDC down by 1.23% were the top losers.

Asian markets were trading mostly lower; with Hang Seng trading lower by 428.38 points or 1.81% to 23,250.03; Taiwan Weighted edging lower by 29.06 points or 0.32% to 8,960.76; Jakarta Composite receding 5.17 points or 0.1% to 5,127.39; KOSPI Index sliding by 5.04 points or 0.25% to 2,026.60 and  Straits Times inching lower by 1.57 points or 0.05% to 3,290.64. On the flip side, FTSE Bursa Malaysia KLCI was trading up by 2.23 points or 0.12% to 1,842.73; Shanghai Composite advanced by 10.21 points or 0.43% to 2,357.93 and Nikkei 225 gained 80.78 points or 0.5% to 16,310.64.

European markets got off to a weak start; with UK’s FTSE 100 trading lower by 6.97 points or 0.1% to 6,642.42; France’s CAC edging lower by 1.12 points or 0.03% to 4,393.63 and Germany’s DAX declining by 0.6 points or 0.01% to 9,489.95