Benchmarks trim gains; trade continues in green

Indian equity markets have trimmed gains but continued to trade in green in the late afternoon session on account of buying in frontline blue chip counters. The sentiments were on positive mood 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. Traders were seen piling positions in Consumer Durables, IT and TECK while selling was witnessed in FMCG, Metal and Bankex sector stocks. In scrip specific development, Kingfisher Airlines was locked at upper circuit limit after it got a stay order from the Calcutta High Court (HC) against a decision of the United Bank of India (UBI) calling the airline a wilful defaulter. Hindustan Unilever was trading in red after foreign brokerage firm downgraded the stock to underweight from equal-weight citing lofty valuations despite weak earnings growth.

On the global front, the Asian markets were trading mostly in red while the European markets traded on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,950 and 26,600 levels respectively. The market breadth on BSE was positive in the ratio of 1899:874 while 82 scrips remained unchanged.

The BSE Sensex is currently trading at 26680.51, up by 54.19 points or 0.20% after trading in a range of 26539.69 and 26709.15. 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 1.37%, while Small cap index was up by 1.81%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.01%, IT up by 1.68%, TECK up by 1.40%, Capital Goods up by 0.75% and Oil & Gas up by 0.59% while, FMCG down by 1.05%, Metal down by 0.83%, Bankex down by 0.31% and Auto down by 0.05% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.43%, BHEL up by 2.58%, TCS up by 2.58%, Infosys up by 1.96% and GAIL India up by 1.77%.

On the flip side, ITC down by 1.52%, Tata Steel down by 1.39%, Sesa Sterlite down by 1.20%, Coal India down by 1.15% and Hindustan Unilever down by 1.09% were the top losers.

Meanwhile, in a big fillip to India’s growth story, international rating agency, 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. S&P, in April 2012, had cut India's “BBB-minus” rating to 'negative', leaving it on the verge of a 'junk' rating. Thus, with this outlook upgrade, India is now rated at the lowest investment grade with a 'stable' outlook by all three major global credit agencies, in line with fellow BRICS countries Brazil and South Africa.

S&P cited India's external position and its improving current account balance as other positive factors. It acknowledged the country’s progress in narrowing its Current Account Deficit (CAD), with measures such as curbs on gold imports by the previous Congress government, along with Reserve Bank of India Governor Raghuram Rajan's commitment to curb inflation, were factors behind the recovery of foreign investor interest in India.

The international rating agency, in its press note, underscored that its stable outlook reflects its views that the new government had both willingness and capacity to implement reforms necessary to restore some of India's lost growth potential. However, it warned that the rating agency could lower country’s rating should the reform agenda stall over the next 24 months and highlighted that its key constraints for the rating upgrade included India’s low wealth level as well as its weak public finances.

The CNX Nifty is currently trading at 7984.30, up by 15.45 points or 0.19% after trading in a range of 7937.80 and 7987.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.43%, TCS up by 2.65%, BHEL up by 2.56%, BPCL up by 2.14% and Infosys up by 1.95%.

On the flip side, Jindal Steel & Power down by 2.23%, DLF down by 1.97%, Kotak Mahindra Bank down by 1.66%, ITC down by 1.53% and Tata Steel down by 1.40% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 449.2 points or 1.9% to 23,229.21, Taiwan Weighted decreased 29.06 points or 0.32% to 8,960.76, Straits Times decreased 6.23 points or 0.19% to 3,285.98, Jakarta Composite decreased 5.49 points or 0.11% to 5,127.07 and KOSPI Index decreased 5.04 points or 0.25% to 2,026.60.

On the other hand, FTSE Bursa Malaysia KLCI increased 3.37 points or 0.18% to 1,843.87, Shanghai Composite increased 9.99 points or 0.43% to 2,357.71 and Nikkei 225 increased 80.78 points or 0.5% to 16,310.64.

The European markets were trading in red; Germany’s DAX decreased 25.58 points or 0.27% to 9,464.97, France’s CAC decreased 16.92 points or 0.39% to 4,377.83 and UK’s FTSE 100 decreased 22.49 points or 0.34% to 6,626.90.