Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors engaged in reducing positions amid a weak trend in global markets. Besides, widening current account deficit to $10.1 billion or 2.1 per cent of GDP in July-September quarter of this fiscal, up from 1.2 per cent a year-ago, also weighed on the sentiment. However, losses remained capped as Global credit rating agency Fitch, in its latest Global Economic Outlook, has highlighted that India will be the only BRIC country where growth picks up in 2014 to 5.6% and further accelerates to 6.5 % in 2015 and 6.8 % in 2016, owing to the government's reforms to improve the business environment. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 4,984.60 crore on December 08, 2014.

On global front, Asian share markets were mostly in the red aided by a media report that the Federal Reserve might take a rhetorical step toward tightening at its meeting next week. Oil prices also extended their long crash with US crude hitting its lowest in five years amid a glut of supply and pressuring energy stocks globally. Back home, Indian rupee depreciated by another 7 paise to 61.90 against the US dollar in early trade on sustained demand for the American currency from banks and importers, also weighed on the sentiment.

On the sectoral front, stocks from IT, Teck and Realty counters were supporting the markets’ uptrend, while those from Metal, FMCG and Consumer Durables counters were adding to the underlying cautious undertone. In scrip specific development, shares of OnMobile Global have locked in upper circuit of 5% at Rs 69.85 on BSE after the company announced share buyback plan. On the other hand, shares of Cairn India have dropped after a global investment banking and diversified financial services group, Macquarie downgraded the stock to ‘neutral’ from ‘outperform’.

The market breadth on BSE was positive, out of 2231 stocks traded, 1164 stocks advanced, while 980 stocks declined on the BSE.

The BSE Sensex is currently trading at 28098.93 down by 20.47 points or 0.07% after trading in a range of 28157.53 and 28056.87. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were IT up by 0.82%, TECK up by 0.71%, Realty up by 0.49%, Infrastructure up by 0.12% and Bankex up by 0.02% while, Metal down by 0.97%, FMCG down by 0.78%, Consumer Durables down by 0.77%, Power down by 0.52% and Capital Goods down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.72%, Sun Pharma Inds. up by 1.35%, Dr. Reddys Lab up by 1.10%, Wipro up by 0.91% and Bajaj Auto up by 0.64%. On the flip side, NTPC down by 1.32%, Sesa Sterlite down by 1.29%, Tata Power down by 1.23%, Hindalco down by 1.19% and ITC down by 1.09% were the top losers.

Meanwhile, India's Current Account Deficit (CAD) for the second quarter of the current financial year widened to $10.1 billion against $5.2 billion on Y-o-Y basis, which translates into 2.1% of GDP against 1.2% in the same quarter the previous year. Despite the expansion, CAD is well within RBI's comfort zone of 2.5% of GDP.

The deficit is not only higher on Y-o-Y basis, but also higher on sequential basis. CAD in the first quarter of the current financial year had been $7.8 billion and widened in reported quarter mainly on account of deceleration in export growth and an increase in gold imports.

While export growth slid to 4.9% in Q2 of 2014-15 from 11.9% on Y-o-Y basis, imports rose by 8.1% in Q2 FY15 as against a decline of 4.8% in the same quarter of the previous year, largely due to a sharp rise in gold imports. Trade deficit in Q2 rose to $38.56 billion against $34.6 billion in the preceding quarter.

However, net services receipts improved by 3.4% in Q2 as telecom, computer and IT services showed improvement from their level a year ago, net outflow on account of primary income (profit, dividend and interest) to $ 6.9 billion in Q2 was higher than Q2FY14 ($ 6.3 billion) as well as the preceding quarter ($6.7 billion).

The balance of payment stood at a surplus of $6.9 billion during July-September, a fourth consecutive quarter of surplus, although that was narrower than the $11.2 billion surplus in the previous quarter. On a BoP basis, there was a net accretion of $6.9 billion to India's foreign exchange reserves in Q2FY15 as against a drawdown of $10.4 billion in Q2FY14.

The CNX Nifty is currently trading at 8425.20 down by 13.05 points or 0.15% after trading in a range of 8444.50 and 8418.45. There were 16 stocks advancing against 34 declining on the index.

The top gainers on Nifty were TCS up by 1.72%, Sun Pharma up by 1.34%, Dr. Reddys Lab up by 1.09%, Wipro up by 0.99% and ICICI Bank up by 0.76%. On the flip side, Jindal Steel & Power down by 2.19%, Cairn India down by 1.84%, Ultratech Cement down by 1.47%, ACC down by 1.46% and Hindalco down by 1.26% were the top losers.

Asian markets were mostly in red, Hang Seng slumped by 0.92%, Nikkei 225 declined by 0.83%, Taiwan Weighted lost 0.58%, Jakarta Composite was down by 0.17%, KOSPI Index decreased 0.28% and FTSE Bursa Malaysia KLCI was lower by 0.21%. On the other hand, Straits Times was up by 0.99% and Shanghai Composite gaining 1.50%.