Benchmarks extend gains; trade near intra-day high levels

Local equity markets going from strength to strength were trading at day’s high point in late morning session on Friday as fresh capital inflows buoyed by recent economic reforms. At day’s high, both Sensex and Nifty were trading above psychologically crucial 27,800 and 8,350 levels respectively, with gains of over a percentage point. Meanwhile, broader indices equally participating into the rally, were up with gains of around a percent. Sentiments got a boost after report that Indian manufacturing activity expanded at its fastest pace in two years in December as new orders flooded in and factories kept price increases to a minimum. The HSBC Manufacturing Purchasing Managers' Index (PMI), rose to 54.5 in December from 53.3, its highest since end-2012 and its 14th straight month above the 50-mark that separates growth from contraction. Some support also came in as the Finance Ministry is expecting an improvement in the fiscal position in January-March quarter on a likely pick up in tax revenue realisation, receipts from spectrum auction and stake sale of PSUs.

Back on street, all BSE sectoral indices were trading in the green with banking, power, PSU and metal leading the uptrend. Among other, Shares of road construction firms surged as the government plans to allocate proceeds from the recent excise duty hike for road construction. While, Airline stocks rose as oil marketing companies slashed Aviation Turbine Fuel (ATF) prices by 12.5 per cent. In scrip specific development, shares of BPL gained on plan to expand its product offerings in the LED lighting segment after having started with solar lanterns about a year back. Furthermore, SRF rose 8.6% on a report that the company has agreed to purchase the global pharmaceutical propellant business from US chemicals maker DuPont.

On global front, most of Asian shares higher in thin trading on the back of a lack of foreign cues and economic data releases. Thin volume is also likely as China, Japan, Thailand and the Philippines remain shuttered for the holiday season. Back home, the market breadth on BSE was positive, out of 2219 stocks traded, 1594 stocks advanced, while 556 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27832.84 up by 325.30 points or 1.18% after trading in a range of 27855.22 and 27519.26. All the 30 stocks were advancing on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.98%, while Small cap index gained 1.01%.

The gaining sectoral indices on the BSE were Bankex up by 1.49%, Power up by 1.19%, PSU up by 1.05%, Metal up by 1.05% and Capital Goods up by 1.04%, while there were no losers on the index.

The top gainers on the Sensex were HDFC up by 2.52%, Axis Bank up by 2.06%, Tata Motors up by 1.92%, ICICI Bank up by 1.91% and BHEL up by 1.62%. while, there were no losers on the Sensex.

Meanwhile, amid rising concerns over the widening fiscal deficit, Finance Minister notified that fiscal position of the government is likely to improve during January-March quarter on the back of possible pick up in tax revenue realisation, receipts from spectrum auction and stake sale of PSUs. Finance Ministry stressed that fiscal deficit is not still an issue as 50 percent of the tax revenue usually comes in the fourth quarter.

India’s fiscal deficit widened to 99% at Rs 5.25 lakh crore during April-November this fiscal as against Rs 5.31 lakh crore Budget Estimates for 2014-15. During the reported period, total receipts including revenue and non-debt capital during the eight months of the year was Rs 5.49 lakh crore or 43.4% of the target. The government's net tax revenue was Rs 4.13 lakh crore or 42.3% of the Rs 9.77 lakh crore estimated for the whole year. Gross tax collections since April have grown 14% year-on-year, however, net tax collections have been lower than estimated on account of refunds. On the other hand, Plan expenditure of the government during the period was Rs 2.93 lakh crore or 51.1% of target and non-Plan expenditure was Rs 7.8 lakh crore or 64% of the target. The fiscal deficit was recorded at around Rs 5.08 lakh crore or 4.5% of GDP in FY14 as against 4.9% in FY13.

The government targets to trim the fiscal deficit to 4.1% of gross domestic product (GDP) in FY15. It has recently issued new austerity measures including 10% cut in non-Plan expenditure. Moreover, the government had also put in place a fiscal consolidation roadmap as per which the fiscal deficit has to be brought down to 3% of the GDP by 2016-17.

The CNX Nifty is currently trading at 8382.00 up by 98.00 points or 1.18% after trading in a range of 8385.65 and 8288.70. There were 48 stocks advancing against 2 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 3.42% and Asian Paints up by 2.97% and HDFC up by 2.56% and ICICI Bank up by 2.16% and Tata Motors up by 2.05%. On the flip side, NMDC down by 0.37% and BPCL down by 0.34% were the only losers on the index.

Asian markets were trading mostly in the green, Hang Seng surged 0.72%, KOSPI Index increased 0.52%, Straits Times improved by 0.09% and Jakarta Composite was up by 0.21%.  On the flip side, FTSE Bursa Malaysia KLCI was down by 0.68%.