Markets continue to trade firm amid gains in consumer durables, IT stocks

Indian bourses continued their firm trade in the afternoon session on value-buying in blue-chips which became attractive after recent losses amid a firm trend in the Asian markets. Besides, the appreciation in rupee value against the dollar and hopes of encouraging third quarter earnings by Infosys, to be released later in the day, also  enthused the major indices to extend gains. Most of the sectoral indices were trading in green on BSE with consumer durables as the top gaining index trading up by around 0.86%.  Investors were also seen piling up position in IT, oil & gas and tech stocks. Finance Minister Arun Jaitley’s statement that significant downward trend in inflation has been recorded in the second and third quarter of 2014-15, also added to the optimistic sentiments. On the sectoral front, shares of pharmaceutical companies were trading higher by up to 5% on reports that the Indian and global companies are looking to invest over Rs 1,000 crore in Gujarat's pharma sector. Among blue chip stocks, Hindustan Unilever was top gainer up by around 3.50%, while NTPC was top loser trading down by around 1.76%. Buying also continued in broader indices with both mid cap and small cap indices trading down by over 0.15%.

In stock specific movement, shares of Educomp Solutions were up over 5% at Rs 28 ahead of the board meeting scheduled for January 13, 2015 to consider issue of equity shares as per the corporate debt restructuring scheme of the company in accordance with SEBI (ICDR) Regulations, 2009.

On global front, most of the Asian markets were trading in green with Straits Times up by 0.09% and Jakarta Composite up by 0.34%, tracking firm cues from the US markets. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,200 and 27,000 levels respectively. The market breadth on BSE was positive, out of 2,554 stocks traded, 1,324 stocks advanced, while 1,117 stocks declined on the BSE.

The BSE Sensex is currently trading at 27344.06, up by 69.35 points or 0.25% after trading in a range of 27337.69 and 27507.67. There were 13 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.41%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.86%, IT up by 0.73%, Oil & Gas up by 0.43%, TECK up by 0.35% and FMCG up by 0.31%. On the other hand, INFRA down by 0.59%, Realty down by 0.54%, Power down by 0.38%, Metal down by 0.16% and PSU down by 0.11% were the losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.50%, Cipla up by 2.61%, Dr. Reddys Lab up by 1.99%, Sun Pharma Inds up by 1.73% and TCS up by 1.60%. On the flip side, NTPC down by 1.76%, Bajaj Auto down by 1.68%, GAIL India down by 1.10%, Bharti Airtel down by 1.02% and Sesa Sterlite down by 0.97% were the top losers.

Meanwhile, concerned over the prevailing high interest rates in economy, Commerce and Industry Minister Nirmala Sitharaman has sought for reduction in interest rates to provide level playing field to domestic industry. The minister has stressed that high interest rate has increased the cost of capital for companies and barred their capital expansion plans.

Nirmala Sitharaman also urged the banks to focus more on lending small and medium enterprises units. During April to October period of this fiscal, manufacturing output which accounts for around 75% of the IIP index, grew by marginal 0.7 per cent  in the reported period as against -0.1 per cent contraction in year ago period.  

The Reserve Bank of India (RBI) targets to contain the CPI inflation at 8 per cent by March 2015 and 6 per cent by March 2016. Keeping inflation battle at the top of agenda, the RBI has kept interest rate unchanged at 8 per cent since January 2014 despite industry and government urging it to cut rates. Meanwhile, CPI inflation eased to 4.38 per cent in November as compared to 5.52 per cent in the previous month and WPI inflation declined to five and half year low at 0 per cent. On the other hand, Indian GDP growth slowed down to 5.3 per cent y-o-y to Rs 14.39 lakh crore in Q2FY15 as against 5.7 per cent in the previous quarter mainly due to sluggish investment and low demand. The RBI is slated to review its monetary policy on February 3.

The CNX Nifty is currently trading at 8252.30, up by 17.70 points or 0.21% after trading in a range of 8250.20 and 8303.30. There were 23 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.40%, Cipla up by 2.68%, Tech Mahindra up by 2.27%, Dr. Reddys Lab up by 1.91% and Tata Motors up by 1.76%. On the flip side, Jindal Steel & Power down by 2.53%, NTPC down by 1.86%, DLF down by 1.79%, Bajaj Auto down by 1.73% and Asian Paints down by 1.70% were the top losers.

Asian Markets were trading in green, Straits Times up by 2.98 points or 0.09% to 3,348.09, Jakarta Composite up by 17.85 points or 0.34% to 5,229.68, KOSPI Index up by 20.05 points or 1.05% to 1,924.70, Shanghai Composite up by 81.49 points or 2.47% to 3,374.95 and Hang Seng up by 302.12 points or 1.27% to 24,137.65. While, Taiwan Weighted down 22.45 points or 0.24% to 9,215.58, Nikkei 225 down 3.03 points or 0.02% to 17,164.07 and FTSE Bursa Malaysia KLCI down 1.58 points or 0.09% to 1,726.48