Benchmarks continue firm trade in late morning session

After getting a gap-up start, benchmark equity indices continued to trade in fine fettle in late morning deals on continued buying activities by both funds and retail investors. Besides, a firming trend at other Asian markets on reports that China had unveiled fresh measures to boost the economy too had positive impact. Sentiments got a boost after Finance Minister Arun Jaitley said that the economy is expected to grow ‘much better’ in 2015-16 as compared with the current financial year. Some support also came in from the report that overseas investors poured in $2 billion in the Indian capital markets this month so far, taking total inflows to $42 billion since January this year. Furthermore, there are reports that the Narendra Modi government is set to unleash several big-ticket announcements over the next few weeks, starting with changes in the land acquisition law through an ordinance too supported the upside.

On global front, most of Asian markets were trading higher, following fresh gains on Wall Street, while a report that China will change banking rules in an apparent effort to boost lending and economic growth as oil prices rebounded, also boosted sentiment. Back home, Falling for the fourth straight session, the rupee today weakened by another 13 paise to 63.70 against the US dollar in early trade due to appreciation of the greenback against other currencies overseas, weighed on market sentiment.

All of the major indices were trading in green and Metal index was the top gainer on BSE index up by around 2.60% followed by Realty and Auto indices were trading up by over 1.30%. The promulgation of coal block ordinance has led to strong buying in metal stocks, while Auto stocks were trading firm ahead of the release of monthly sales volume data for the month of December due later in this week. In scrip specific development, shares of Career Point have surged after the company signed a memorandum of understanding (MOU) with Rajasthan Skills and Livelihood Development Corporation (an undertaking of Government of Rajasthan) to impart skill development training. Furthermore, Larsen and Toubro (L&T) rose after the company has bagged an offshore contract valued at Rs 894 crore from the Oil & Natural Gas Corporation (ONGC).

The market breadth on BSE was positive, out of 2252 stocks traded, 1544 stocks advanced, while 630 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27447.31 up by 205.53 points or 0.75% after trading in a range of 27507.25 and 27266.49. All the 30 stocks were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.01%, while Small cap index gained 0.85%.

The gaining sectoral indices on the BSE were Metal up by 2.60%, Realty up by 1.93%, Auto up by 1.36%, Infrastructure up by 1.20% and Power up by 1.11%, while there were no losers on the index.

The top gainers on the Sensex were Sesa Sterlite up by 4.53%, Tata Steel up by 2.40%, Hindalco up by 2.30%, Tata Motors up by 2.01% and Coal India up by 1.71%. while, there were no losers on the Sensex.

Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan has asserted that central bank would like to focus on medium-term inflation target and will not chase the short-term goals. Highlighting that  no country in the world chases short-term inflation target ignoring domestic and global developments, Raghuram Rajan emphasized that medium term inflation target provide room for the economy to adjust in accordance with the changes that are happening.

The RBI targets to contain the CPI inflation at 8 per cent by March 2015 and 6% by March 2016. Keeping inflation battle at the top of agenda, the RBI has kept interest rate unchanged at 8% since January 2014 despite industry and government urging it to cut the rate. Meanwhile, CPI inflation eased to 4.38% in November as compared to 5.52% in the previous month and WPI inflation declined to five and half year low at 0%. On the other hand, Indian GDP growth slowed down to 5.3% y-o-y to Rs 14.39 lakh crore in Q2FY15 as against 5.7% in the previous quarter mainly due to sluggish investment and low demand.

On economic growth the RBI governor has stated that though the country is still not on strong recovery path, India will soon return to high economic growth in next couple of years. Attributing the surge in trade deficit to high gold imports, he stated that gold imports during the past few months surged due to relaxation of import norms, however the things would return to normal soon with the fall in gold imports.

The CNX Nifty is currently trading at 8262.95 up by 62.25 points or 0.76% after trading in a range of 8279.15 and 8214.70. All the 50 stocks were advancing on the index.

The top gainers on Nifty were Sesa Sterlite up by 4.53%, Jindal Steel & Power up by 3.99%, Tata Steel up by 2.40%, Hindalco up by 2.37% and DLF up by 2.31%, while there were no losers on the Nifty.

The Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI rose 0.09%, Straits Times increased 0.31, Jakarta Composite added 0.18%, Shanghai Composite surged 0.9%, Taiwan Weighted strengthened 0.69% and Hang Seng was up by 1.89%. On the flip side, Nikkei 225 decreased 0.97% and KOSPI Index was down by 0.89%.