Markets pare early gains amid selling in consumer durables, PSU stocks

Indian equity benchmarks pared most of the gains and were trading near intraday low levels in the afternoon session as selling emerged in consumer durables and PSU stocks. There was some cautiousness among investors ahead of announcement of key macroeconomic data such as IIP and inflation during the week. However, domestic benchmarks managed to remain in green territory as investors were seen piling positions in auto and banking stocks. Sentiment got some support as global rating agency Moody’s has highlighted that India will witness sustained robust growth over the next two years. Further, sustained buying by foreign funds and retail investors on expectations of acceleration in economic reforms by the government after the expansion of the Union Cabinet also supported the benchmarks. Broader indices too witnessed buying as both mid and small cap indices were trading in green. Among major sectoral indices, auto was top gaining index up by around 0.50%, while, FMCG remained the biggest losing index trading down by around 0.20%.

Amtek Auto has soared 15% to Rs 188 on reports that the company’s international business arm, Amtek Global Technologies, has secured a long-term loan of 235 million euro (over Rs 1,800 crore) from global investment firm Kohlberg Kravis Roberts (KKR), to replace its existing short- term loan. Hindustan Construction Company (HCC) has rallied 10% to Rs 37.50 after its real estate arm Lavasa Corporation received approval from the capital market regulator to launch its initial public offering (IPO).

On global front, Asian markets were trading mixed with Nikkei 225 up by 2.04% and Shanghai Composite down 0.66%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,300 and 26,500 levels respectively. The market breadth on BSE was positive, out of 2,606 stocks traded, 1,360 stocks advanced, while 1,154 stocks declined on the BSE.

The BSE Sensex is currently trading at 27896.69, up by 21.96 points or 0.08% after trading in a range of 27883.46 and 27996.92. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index up by 0.05%.

The gaining sectoral indices on the BSE were Auto up by 0.51%, Bankex up by 0.33%, INFRA up by 0.33%, Capital Goods up by 0.28% and Realty up by 0.01%.  On the flip side, Consumer Durables down by 0.28%, PSU down by 0.27%, IT down by 0.26%, TECK down by 0.23% and FMCG down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.05%, GAIL India up by 1.47%, Axis Bank up by 1.25%, Tata Steel up by 1.03% and HDFC up by 0.92%. On the flip side, BHEL down by 2.71%, Infosys down by 1.10%, ITC down by 1.02%, Bharti Airtel down by 1.01% and Dr Reddys Lab down by 0.75% were the top losers.

Meanwhile, Global rating agency Moody’s, in its latest quarterly Global Macro Outlook report , has highlighted that India to witness sustained robust growth over the next two years. Currently, the rating agency has assigned 'Baa3' rating with a stable outlook on India, which is lowest in the investment grade.

On global front, Moody's highlighted that the US growth is likely to accelerate in coming future on the back of rising investment and consumer demand. For the G-20 economies, the rating agency is expecting a GDP growth of around 3 percent in 2015 and 2016, after notching up 2.8 percent in 2014.

The country had two consecutive fiscals of sub-5 per cent growth, and the economic growth prospects have been looking up since the first quarter of current fiscal when GDP growth accelerated to 5.7 percent y-o-y.

Moody's had expected that India’s GDP growth to touch 5 percent in 2014 and accelerate in 2015. It also highlighted that the decision to deregulate the diesel prices and hike the natural gas prices are credit positive for India as it would improve the fiscal discipline of the country. Moody's also appreciated the recently launched ‘Make in India’ campaign which saw the government initiating some reforms in the labour and investment policies front and government’s financial inclusion measures, infrastructure development initiatives, clarity around inflation targets, as well as banking and energy sector reforms.
 
The CNX Nifty is currently trading at 8350.65, up by 6.40 points or 0.08% after trading in a range of 8347.40 and 8378.70. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Ultratech Cement up by 2.59%, Mahindra & Mahindra up by 1.90%, IDFC up by 1.72%, GAIL India up by 1.43% and Axis Bank up by 1.25%. On the flip side, BHEL down by 2.65%, Jindal Steel & Power down by 1.83%, NMDC down by 1.79%, ITC down by 1.18% and Infosys down by 1.09% were the top losers.

Asian markets were trading mixed, KOSPI Index up by 4.77 points or 0.24% to 1,963.00, Hang Seng up by 32.31 points or 0.14% to 23,777.01, Jakarta Composite up by 64.55 points or 1.3% to 5,029.94 and Nikkei 225 up by 342.95 points or 2.04% to 17,123.48. While, Shanghai Composite down 16.44 points or 0.66% to 2,457.24, Taiwan Weighted down 15.84 points or 0.18% to 9,034.14, FTSE Bursa Malaysia KLCI down 2.62 points or 0.14% to 1,825.31 and Straits Times down 0.83 points or 0.03% to 3,300.17.