Benchmarks continue to hold their head above water

After getting a cautious start, Benchmarks showed some strength in early morning trades and continued to trade in narrow range with a positive bias in late morning deals, as investors opted to take positions in beaten down but fundamentally strong stocks. Sentiment on the street improved with Finance Minister Arun Jaitley saying that infrastructure sectors such as coal, power and cement have been recording double digit growth in the last few months while growth in the manufacturing sector is still patchy and reviving manufacturing, diversifying its base and equipping it for robust long-term expansion is one of the major challenges before the Centre. Besides, a positive trend at other Asian markets coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1,570.76 crore on January 06, 2014.

On global front, Asian stock markets snapped two days of declines Wednesday but gains were tempered by worries about the plunge in oil prices and renewed doubts about Greece's membership of the euro currency bloc. Overnight, US stocks fell, extending the longest losing streak in the Standard & Poor’s 500 Index in 13 months, as small-cap and energy shares slid after oil pushed further below $50 a barrel. Back home, Indian rupee gained 10 paise to 63.47 against the US dollar in early trade on fresh selling of the US currency by exporters amid weakness in the dollar index overseas.

Back on street, stocks from Oil & Gas, IT and TECK counters were supporting the markets’ uptrend, while those from Metal, Capital Goods and Auto counters were adding to the underlying cautious undertone. In scrip specific development, shares of Aurobindo Pharma surged it has received final approval from US health regulator to sell generic version of Valsartan tablets used for treatment of hypertension. Moreover, Hindustan Unilever rose on reports that a foreign investment bank upgraded the stock to buy from hold and also raised its target price for the stock.

The market breadth on BSE was positive, out of 2256 stocks traded, 1245 stocks advanced, while 926 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27007.15, up by 19.69 points or 0.07% after trading in a range of 26876.58 and 27051.60. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 0.34%.

The gaining sectoral indices on the BSE were Oil & Gas up by 0.68%, IT up by 0.44%, TECK up by 0.37%, PSU up by 0.31% and FMCG up by 0.21% while, Metal down by 0.41%, Capital Goods down by 0.18%, Auto down by 0.17%, Realty down by 0.13% and Bankex down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.14%, NTPC up by 1.68%, Reliance Industries up by 1.26%, ONGC up by 1.23% and Coal India up by 1.03%. On the flip side, GAIL India down by 3.17%, ICICI Bank down by 1.98%, BHEL down by 1.84%, Tata Motors down by 1.42% and Dr. Reddys Lab down by 1.25% were the top losers.

Meanwhile, with an aim to improve the ease of doing business and boost foreign investments, the government has aligned the Foreign Direct Investment (FDI) policy with the upgraded National Industrial Classification (NIC) Code which will classify business activities and help the industry in seeking policy approvals for specific activities.

The World Bank has placed India at 142 rank among 189 countries in its latest 'Ease of Doing Business' report, a drop by two places from the last year's ranking. The report assigned 53.97 points to India as compared to 52.78 points in the previous report. World Bank highlighted that drop in India's ranking from last year's 140 is mainly because other nations have performed much better.

Meanwhile, foreign direct investment (FDI) in India during the April-October FY15 grew by 25% to $17.35 billion from $13.82 billion recorded in the corresponding period of the previous fiscal. During FY14, FDI increased by 8% to $24.29 billion from $22.42 billion recorded in the FY13. FDI is considered crucial for India, which requires around $1 trillion in the 12th five year plan (2012-2017) to overhaul its infrastructure sector such as ports, airports and highways to boost growth. However, to attract maximum FDI into the country, the government has been liberalizing the foreign investment policy. Recently, the government has eased the FDI norms in insurance sector. The government is of the view that hiking of the foreign investment cap in the insurance sector to 49 per cent will result in capital inflow of $6-8 billion. Besides, the government’s 'Make in India' programme, launched by Prime Minister Narendra Modi is another big-ticket reform that the government expects the foreign investors to bring FDI worth billions of dollars into the country.

The CNX Nifty is currently trading at 8128.40, up by 1.05 points or 0.01% after trading in a range of 8098.00 and 8151.20. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.05%, Kotak Mahindra Bank up by 2.34%, Asian Paints up by 1.98%, NTPC up by 1.80% and Reliance Industries up by 1.29%. On the flip side, GAIL India down by 3.04%, BHEL down by 2.11%, ICICI Bank down by 2.07%, Cairn India down by 2.01% and Tata Motors down by 1.67% were the top losers.

Most of the Asian equity indices were trading in the green; Shanghai Composite rose 0.01%, KOSPI Index added 0.12%, Straits Times strengthened 0.71%, Jakarta Composite increased 0.57%, Taiwan Weighted surged 0.53%, Nikkei 225 gained 0.31% and Hang Seng was up by 0.72%. On the flip side, FTSE Bursa Malaysia KLCI was down by 0.20%.