Benchmarks reverse gears; enters into positive territory

Reversing gears, Indian equity markets have now entered into positive territory in late morning deals on emergence of buying by funds and retail investors in select stocks. Sentiments got a boost after the trade deficit for the month of December decreased by 44% at $9.43 billion hitting a ten month low mainly on account of falling imports due to slump in crude prices. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 1,738.24 crore on January 15, 2015. However, gains remained capped on Switzerland's unexpected decision to remove its currency cap, which triggered a wave of volatility in financial markets worldwide.

Among the BSE sectoral indices, good buying was observed in Consumer Durables, Realty and Capital Goods sectors, while selling pressure was seen in IT and Teck sectors. In scrip specific development, shares of SpiceJet surged after Kalanithi Maran and his associates had decided to transfer the ownership and management control of the airline to former promoter Ajay Singh and a clutch of investors. on the other hand, shares of Tata Consultancy Services have dipped after reporting a flat 1.6% quarter-on-quarter growth in consolidated net profit at Rs 5328 crore for the third quarter ended December 31, 2014.

On global front, Asian shares dropped on Friday after Switzerland's unexpected move to abandon its currency cap jolted markets already roiled by plunging commodities prices. On Wall Street overnight, stocks closed lower, marking a fifth straight session of losses as investors digested the SNB's move, disappointing bank results and the potential impact of global economic weakness on US corporate earnings.  Back on street, the market breadth on BSE was positive, out of 2309 stocks traded, 1308 stocks advanced, while 922 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28087.64, up by 12.09 points or 0.04% after trading in a range of 27945.31 and 28106.22. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.76%, while Small cap index up by 0.53%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.39%, Realty up by 2.07%, Capital Goods up by 1.17%, Metal up by 0.79% and Power up by 0.72% while, IT down by 0.46% and TECK down by 0.37% were the losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.90%, Sesa Sterlite up by 1.79%, Hindustan Unilever up by 1.79%, Coal India up by 1.57% and Larsen & Toubro up by 1.36%. On the flip side, Bharti Airtel down by 2.62%, TCS down by 1.66%, Tata Motors down by 1.17%, Hero MotoCorp down by 1.10% and SBI down by 1.05% were the top losers.

Meanwhile, Easing pressure on country’s external sector as well as domestic currency, India’s trade deficit narrowed to 10-month low at $9.43 billion in month of December as compared to $16.86 billion in November and $10.19 billion in the same month of previous year. The significant decline in trade deficit led by falling imports due to slump in crude oil prices, though exports too have come down in December.

India’s import during December was declined by 4.78% y-o-y to $34.83 billion, leading to improvement in the trade balance situation.  Gold imports showed an increase from year-ago level to $1.34 billion during the reported month, but it is a substantial decline from the previous month $5.61 billion. During April-December FY15, India’s imports grew by 3.63% to $351.20 billion from $338.91 billion reported in the same period of previous fiscal.

On the other hand, domestic overseas shipments declined by 3.77% to $25.40 billion in December from $26.39 billion in the same month of previous year, reflecting the prevailing slowdown in global market. During April-December FY15, the value of India’s overseas shipments increased by 4.02% to $241.15 billion from $231.83 billion in the same period of previous financial year. It seems difficult to achieve the set exports’ target of $340 billion for FY15 as it would require average exports of $33 billion per month as against $26-27 billion per month in the past. India’s trade deficit during the first nine months of current fiscal widened to $110.05 billion as against $107.07 billion in the same period of previous financial year.

The CNX Nifty is currently trading at 8496.40, up by 2.25 points or 0.03% after trading in a range of 8452.25 and 8530.75. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Sesa Sterlite up by 1.85%, Coal India up by 1.82%, Hindustan Unilever up by 1.77%, Asian Paints up by 1.73% and HDFC Bank up by 1.70%. On the flip side, Bharti Airtel down by 2.62%, TCS down by 1.49%, PNB down by 1.45%, Tata Motors down by 1.43% and Kotak Mahindra Bank down by 1.34% were the top losers

Asian markets were trading mostly in the red; Nikkei 225 tumbled 1.91%, Hang Seng declined 0.90%, Straits Times decreased 1.10%, KOSPI Index shed 1.41%, Taiwan Weighted slipped 0.28%, Jakarta Composite down by 0.036% and FTSE Bursa Malaysia KLCI was down by 0.14%. On the flip side, Shanghai Composite was up by 1.12%.