Benchmarks trade in green on supportive global cues

Indian equity benchmarks are trading slightly in the green in early deals on Wednesday on the back of supportive global cues. The US markets ended higher in last session with Dow and the S&P 500 surging to new record closing highs, in a positive reaction to news out of Japan, where Prime Minister Shinzo Abe said he is postponing a planned but unpopular sales tax increase for 18 months. The Asian markets were trading higher at this point of time with Japanese shares are trading flat with a positive bias after PM Abe announced fresh elections and the proposed hike in consumption tax was delayed. Investors will be looking at the Bank of Japan meeting scheduled later today for cues.

Back home, some support came in with global rating agency Fitch Ratings’ statement that India's economic growth is expected to pick up to 5.6 percent in the current fiscal on account of structural reforms being rolled-out by the government. Meanwhile, Reserve Bank of India (RBI) governor Raghuram Rajan has said that India will focus on sustainable economic growth and developed economies should do the same.

On the sectoral front, fast moving consumer goods, metal and capital goods witnessed the maximum gain in trade, while software, banking and technology remained the top losers on the BSE sectoral space. The broader indices too were trading in the green, while the market breadth on the BSE was positive; there were 1342 shares on the gaining side against 702 shares on the losing side while 77 shares remain unchanged.

The BSE Sensex opened at 28193.90; around 30 points higher as compared to its previous closing of 28163.29, and has touched a high and a low of 28294.01 and 28167.83 respectively. The BSE Sensex is currently trading at 28192.94, up by 29.65 points or 0.11% after trading in a range of 28167.83 and 28294.01. There were 18 stocks advancing against 12 stocks declining on the index.

The overall market breadth remained in the favour of advances with 63.27% stocks advancing against 33.10% declines. The broader indices were trading in the green; the BSE Mid cap index was up by 0.61%, while Small cap index up by 0.89%.

The gaining sectoral indices on the BSE were FMCG up by 1.24%, Metal up by 0.93%, Capital Goods up by 0.75%, Auto up by 0.32% and Consumer Durables up by 0.28% while, IT down by 0.25%, Bankex down by 0.21%, TECK down by 0.17% and INFRA down by 0.06% were the few losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 2.64%, Hindustan Unilever up by 1.60%, Sesa Sterlite up by 1.52% and ITC up by 1.41%. On the flip side, Tata Motors down by 0.98%, GAIL India down by 0.79%, Sun Pharma down by 0.70%, Mahindra & Mahindra down by 0.67% and Infosys down by 0.63% were the top losers.

Meanwhile, pitching for a rate cut, Finance Minister Arun Jaitley, at an investor summit underscored that lower cost of capital would provide a good fillip to the economy. He nudged Reserve Bank of India to cut interest rates to boost growth at a time when inflation, especially food inflation had come down substantially over the past few months and global fuel prices ebbed to four-year low.

Cajoling India’s apex bank, he averred that RBI, which is a highly professional organization, if in its wisdom decides to cut down interest rates then this will give a good impetus to the Indian economy. However, in order to cut down on growing clamor of rate cut, RBI Deputy Governor S S Mundra, who was present at the same summit, emphasized the central bank revises rate, but not on 'popular demand' and further stated that it only does when there is a clear conviction in doing so. 

Earlier, too, pouring cold water on hopes of rate cut by RBI in its upcoming monetary policy, it’s another deputy governor, HR Khan  highlighted that recent decline in inflation did not mean the decline was permanent. He also emphasized that though decline in crude oil prices and other commodities were beneficial to Indian economy, policy makers just could not jump their guns until they were convinced the trend was firmly established.

The clamor for rate cuts have been growing louder after inflation measured by the wholesale price index has fallen to a five-year low of 1.77% in October, while consumer price index, which tracks prices consumers actually pay at shop counters, too, fell to a three-year low of 5.52% in October.

Separately, Finance Minister Arun Jaitley also assured investors of more reforms in the near future and large investments from domestic and foreign investors by NDA government, which has already taken several measures to boost growth in the infrastructure sector.

The CNX Nifty opened at 8,440.65; around 15 point higher as compared to its previous closing of 8,425.90, and has touched a high and a low of 8,455.65 and 8,419.45 respectively.

The CNX Nifty is currently trading at 8429.00, up by 3.10 points or 0.04%. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.80%, BPCL up by 2.12%, Hindustan Unilever up by 1.76% and Jindal Steel & Power up by 1.72%. On the flip side, Tata Motors down by 1.25%, Cairn India down by 1.12%, Sun Pharma down by 1.03%, GAIL India down by 1.01% and PNB down by 0.86% were the top losers.

Asian markets were trading mostly in the green; Nikkei 225 surged by 49.75 points or 0.29% to 17,393.81, Straits Times soared 17.71 points or 0.53% to 3,331.44, Jakarta Composite increased by 16.58 points or 0.33% to 5,119.05, FTSE Bursa Malaysia KLCI improved 7.11 points or 0.39% to 1,825.49 and Taiwan Weighted was up by 104.21 points or 1.18% to 8,963.28.

On the flip side, Hang Seng dropped 67.07 points or 0.29% to 23,462.10, KOSPI Index slipped 5.19 points or 0.26% to 1,961.82 and Shanghai Composite was down by 5.13 points or 0.21% to 2,451.23.