Benchmarks continue to trade in green in late morning session

After getting a gap-up start, benchmark equity indices continued to trade in fine fettle in late morning deals on sustained fund inflows amidst optimism over encouraging corporate earnings. Besides, falling global crude oil prices which dipped to its lowest closing point since October 2011 also influenced trading sentiments. The slump in crude prices will lead to a substantial decline in India's import bill. This means lower fiscal deficit and further easing in inflation. Sentiment on the street also improved on World Bank’s report, which recently ranked India 142nd in its ease of doing business list, said the ranking will improve by at least 50 notches if one includes the best practices followed at the state level. Some support came in from reports that foreign institutional investors (FIIs) bought shares worth a net Rs 1,413 crore on November 03, 2014. However, gains remained capped as traders remained cautious on the National Council of Applied Economic Research’s (NCAER) latest projection, where it has lowered India’s GDP growth forecast to 5 percent in the current financial year on weak economical fundamentals and uncertainties in growth prospects. On the macro front, growth in India's dominant service industry stalled last month as new orders came in at a weaker pace, adding to pressure on the government to drive through economic reforms showed a business survey.
 
Barring Metal, all other BSE sectoral indices were trading significantly in the green. Among them, banking index gained 1.13 per cent, followed by Realty 0.92 per cent and Auto indices 0.59 per cent. In scrip specific development, shares of Thermax have surged after its net profit  recorded almost three fold jump at Rs 86 crore as compared to Rs 30 crore last year for the second quarter ended September 30, 2014. Besides, Vindhya Telelinks has rose after Reliance Mutual Fund bought nearly 4% stake in the company for about Rs 20 crore through open market. On the other hand, shares of Monsanto India have declined after reporting a net loss of Rs 4.81 crore for the quarter as compared to a net profit of Rs 7.59 crore for the same quarter in the previous year.

On global front, Asian stock markets mostly fell as the slump in oil prices weighed on energy companies and lower growth estimates for Europe dampened sentiment. Brent crude dropped below $83 a barrel on Wednesday, stretching losses into a fifth session, as weak economic data from top energy consumer China stoked worries about demand in a market that is already battling a deepening global supply glut. Back home, Indian rupee strengthened by six paise to 61.34 against the US dollar in early trade on selling of the US currency by exporters and banks amidst sustained capital inflows. The market breadth on BSE was positive, out of 2390 stocks traded, 1483 stocks advanced, while 821 stocks declined on the BSE.

The BSE Sensex is currently trading at 27965.79 up by 105.41 points or 0.38% after trading in a range of 28006.60 and 27888.27. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.74%, while Small cap index gained 0.90%.

The gaining sectoral indices on the BSE were Bankex up by 1.13%, Realty up by 0.92%, Auto up by 0.59%, Consumer Durables up by 0.52% and FMCG up by 0.52%, while Metal down by 1.59% was the only losing Index on BSE.

The top gainers on the Sensex were Axis Bank up by 2.19%, SBI up by 1.94%, Sun Pharma up by 1.88%, Bajaj Auto up by 1.82% and Hindustan Unilever up by 1.02%. On the flip side, Coal India down by 2.08%, Sesa Sterlite down by 1.80%, Hindalco down by 1.44%, Bharti Airtel down by 1.43% and Tata Steel down by 1.14% were the top losers.

Meanwhile, in its mid-year review of the economy, the National Council of Applied Economic Research (NCAER) has lowered India's GDP growth forecast to 5 percent for current fiscal from 5.7 percent projected earlier.

Unlike other forecasts, the NCAER revealed that the fundamentals of the economy remain weak with uncertain growth prospects.  The pace of growth shows signs of slowing down in the services sector and bank credit to the commercial sector has not picked pace and continues to languish. Further, the slowdown in the external economy, except the US, shows little growth prospects for the external sector, it added.  After recording a double-digit growth in May and June, export growth slowed down in subsequent months with a growth rate of just 2.73 percent in September. Though weakening of inflation and the foreign direct investments (FDI) inflows to be redeeming features, Indian economic growth prospects will depend on factors such as the extent of damage on agriculture due to deficit rainfall and revival of the external economy, NCAER added. It projected agriculture growth at 2 percent in FY15 on account of the uneven distribution and the 17-per cent deficiency in rainfall. Industry growth is projected at 2.3 percent for current fiscal. The NCAER has also projected the Centre’s fiscal deficit at 4.3 percent of GDP against the budget target of 4.1 percent.

During the past two fiscal, Indian economic growth slowed down to below 5 percent. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy growth.  However, during the first quarter of current fiscal India’s economy expanded by 5.7 percent as compared to 4.7 percent growth recorded in same quarter last year.

The CNX Nifty is currently trading at 8,352.95 up by 28.80 points or 0.35% after trading in a range of 8,363.95 and 8,326.10. There were 33 stocks advancing against 17 declining on the index.

The top gainers on Nifty were BPCL up by 2.58%, Axis Bank up by 2.14%, Zee Entertainment up by 1.93%, SBI up by 1.86% and Indusind Bank up by 1.72%. On the flip side, Cairn India down by 3.85%, Sesa Sterlite down by 2.33%, NMDC down by 2.05%, Coal India down by 2.00% and Jindal Steel & Power down by 1.56% were the top losers.

Asian markets were trading mostly in the red; Hang Seng down by 0.60%, KOSPI Index down by 0.25%, Shanghai Composite declined by 0.49%, FTSE Bursa Malaysia KLCI dipped 0.34% and Taiwan Weighted was down by 0.50%. On the flip side, Nikkei 225 soared 0.18%, Straits Times surged by 0.15% and Jakarta Composite was up by 0.10%.