Markets continue to trade in green amid gains in banking, infra stocks

Indian bourses continued to trade in green in the afternoon session as buying momentum in the equities persisted, however the gains were capped and marginal downfall from day's high levels was seen as selling appeared in metal and oil and gas stocks. Though buying witnessed in banking, infra and auto stocks provided support to the domestic benchmarks and most of the sectoral indices were trading in green. Firming trend overseas and covering-up of short positions by speculators ahead of monthly expiry in the derivatives segment also strengthen the rally. Among blue chip stocks, Bajaj Auto was top gainer up by around 1.89%, while Hindalco was top loser trading down by around 1.60%. Buying also continued in the broader markets with both the mid and small cap indices trading down by over 0.30%.

In scrip specific movement, shares in ABG Infralogistics soared 14% to Rs 121, extending its previous day’s 20% rally on domestic bourses, on back of heavy volumes after the company reported that it is creating around 40 million tonne capacity but this will be commissioned in the next financial year. Shares of Mukand was locked in upper circuit of 20% at Rs 55.30 after the company said its board has approved the transfer of special and alloy steel business to a yet-to-be-formed subsidiary for an enterprise value of Rs 1,590 crore.

On global front, most of the Asian markets were trading in green with Straits Times up by 0.06% and Taiwan Weighted up by 0.03% following positive cues from overnight gains in US markets ahead of economic data releases. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was positive, out of 2,442 stocks traded, 1,233 stocks advanced, while 1,102 stocks declined on the BSE.

The BSE Sensex is currently trading at 27808.03, up by 106.24 points or 0.38% after trading in a range of 27701.13 and 27851.10. 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 0.41%, while Small cap index up by 0.33%.

The gaining sectoral indices on the BSE were Bankex up by 0.65%, INFRA up by 0.52%, Auto up by 0.47%, FMCG up by 0.46% and Power up by 0.39%. On the other hand, Metal down by 0.89%, Oil & Gas down by 0.38%, Realty down by 0.22% and Consumer Durables down by 0.18% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 1.89%, Bharti Airtel up by 1.85%, HDFC up by 1.28%, Axis Bank up by 1.24% and SBI up by 1.15%. On the flip side, Hindalco down by 1.60%, Coal India down by 1.11%, Sesa Sterlite down by 1.07%, Wipro down by 0.95% and Tata Power down by 0.71% were the top losers.

Meanwhile, A Standing Committee on Finance has called for bold policy initiatives including steps to contain rupee depreciation in order to control the current account deficit (CAD) situation. With petroleum prices showing a downward trend, the situation is favorable for bold policy initiatives to maintain the trend of easing of CAD, the Parliament Panel highlighted in its latest action taken report tabled in the Lok Sabha on December 22.

The Parliamentary Panel has noted that unrelenting situation of CAD of the past few years eased a bit alongside fiscal deficit and the government must not lose this opportunity to contain the CAD. Further, rupee depreciation needs to be contained to bridge the CAD-Gross Domestic Product (GDP) divide. Panel report also highlighted that the government needs to take suitable policies to boost the domestic production as well as exports which will help to maintain CAD at an acceptable level of GDP.

India's Current Account Deficit (CAD) for the second quarter of the current financial year widened to $10.1 billion or 2.1% of GDP as against $5.2 billion or 1.2% of GDP in the same quarter the previous year. Increasing trade deficit over the past few months can be attributed the major reason for widening of CAD during the quarter. However, over the first half of current fiscal, India’s CAD remains within RBI’s comfort zone of 2.5 percent of GDP. CAD was recorded at $17.9 billion or 1.9 percent of GDP in H1FY15 as against $ 26.9 billion or 3.1 percent of GDP in same period last year.

The CNX Nifty is currently trading at 8349.00, up by 25.00 points or 0.30% after trading in a range of 8319.15 and 8364.75. There were 29 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.24%, Bharti Airtel up by 1.86%, Bank Of Baroda up by 1.81%, Bajaj Auto up by 1.76% and HDFC up by 1.38%. On the flip side, HCL Tech down by 2.17%, Hindalco down by 1.51%, Sesa Sterlite down by 1.38%, Cairn India down by 1.33% and Coal India down by 1.29% were the top losers.

Most of the Asian markets were trading mixed, Straits Times up by 2.02 points or 0.06% to 3,332.98, Taiwan Weighted up by 2.71 points or 0.03% to 9,097.71, FTSE Bursa Malaysia KLCI up by 6.46 points or 0.37% to 1,750.51, Nikkei 225 up by 13.74 points or 0.08% to 17,635.14, Jakarta Composite up by 16.79 points or 0.33% to 5,142.56, Shanghai Composite down 44.93 points or 1.44% to 3,082.51, Hang Seng down 6.56 points or 0.03% to 23,402.01, KOSPI Index down 4.1 points or 0.21% to 1,939.02