Markets pare early losses; trade at neutral line

Indian equity benchmarks pared all early losses and were trading near the neutral line in noon session. Firm buying witnessed in consumer durables, capital goods and power stocks provided support to the major indices and most of the sectoral indices were trading in green. Sentiment got a boost as 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. However, gains remained capped as discouraging third quarter earnings by TCS and a weak trend in the global markets weighed on the sentiments. Furthermore, traders were also seen booking profit in some selected stocks after the recent gains. Sectors wise, shares of housing finance companies were trading higher with most the stocks from the sector trading at their respective lifetime highs on expectations that lower interest rates would help revive demand for home loans. However, traders were booking profit in cement stocks after the recent gains. Broader indices were outperforming the benchmarks with both mid cap and small cap indices were trading up by around 0.20%.

Shares of Sun TV Network has soared around 10% to Rs 411 on back of heavy volumes after promoters sold out of its group company SpiceJet to co-founder Ajay Singh. Hindustan Unilever (HUL) continue at its upward march on the bourses, with the market value of the company crossing the Rs 2 lakh crore mark in current session. The company is now stood at the ninth positions in overall market capitalization ranking.

On global front, Asian markets were trading in red with Nikkei 225 down 1.43% and Hang Seng down 0.75%. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,450 and 28,000 levels respectively. The market breadth on BSE was positive, out of 2,681 stocks traded, 1,296 stocks advanced, while 1,290 stocks declined on the BSE.

The BSE Sensex is currently trading at 28075.90, up by 0.35 points after trading in a range of 27945.31 and 28108.73. 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 0.29%, while Small cap index up by 0.19%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.15%, Capital Goods up by 1.18%, Power up by 1.07%, Realty up by 0.97% and FMCG up by 0.75%. On the other hand, IT down by 0.51%, TECK down by 0.40%, Auto down by 0.13%, Oil & Gas down by 0.08% and Bankex down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Coal India up by 1.99%, Hindustan Unilever up by 1.61%, Larsen & Toubro up by 1.48%, HDFC Bank up by 1.45% and BHEL up by 1.23%. On the flip side, Bharti Airtel down by 2.63%, SBI down by 1.89%, Tata Motors down by 1.62%, TCS down by 1.55% and Hero MotoCorp down by 1.10% were the top losers.

Meanwhile, a leading rating agency India Ratings has expected that Indian economy to grow at 6.5% in the next fiscal from 5.6% this fiscal. The rating agency is of the view that a number of announcements made in the last Budget to address the structural issues plaguing industrial and infrastructure sectors could gather pace in the next fiscal, besides the government will announce few more initiative in the new Budget to boost the economic growth.

Moreover, the government’s push for ‘Make in India’ which focuses on select 26 sectors and improving the ‘ease of doing business will aid the manufacturing and industrial growth. India Ratings also estimated the industry to grow at 6.5% in FY16 against the projected 3.6% in the current fiscal. On inflation front, it highlighted that wholesale price index (WPI) and consumer price index (CPI) based inflation to moderate to 2.8% and 6.0%, respectively, in FY16. Further, it hopes that the RBI to cut the repo rate by another 75bps by FY16, after 25 basis points cut January 15.

On declining crude oil prices, the agency noted that declining crude prices is a windfall gain for the Indian economy. It has improved both the inflation and fiscal outlook.  Referring to fiscal deficit, it noted that measures such as dramatic fall in global crude prices, an increase in excise on petrol and diesel, cancellation of coal block allocations and penalties imposed, higher surplus transferred by RBI to the government and the announced 10% cut in the non-Plan expenditures, are all likely to help the government balance its revenue and expenditure better in FY15. However, these measures will still not be enough to bridge the gap arising out of the shortfall in tax and non-tax revenue and the fiscal deficit in FY15 will be 4.2% of GDP. Meanwhile, the fiscal deficit could fall to 3.9 % in FY16 with higher growth, expected tax reforms and expenditure rationalisation.

The CNX Nifty is currently trading at 8494.50, up by 0.35 points after trading in a range of 8452.25 and 8530.75. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Power Grid Corp up by 3.11%, Zee Entertainment up by 2.80%, Coal India up by 2.13%, Hindustan Unilever up by 1.55% and Larsen & Toubro up by 1.53%. On the flip side, Bharti Airtel down by 2.69%, PNB down by 2.38%, SBI down by 2.01%, Tata Motors down by 1.73% and Cairn India down by 1.65% were the top losers.

Asian Markets were trading Mostly in red, Nikkei 225 down 244.54 points or 1.43% to 16,864.16, Hang Seng down 181.42 points or 0.75% to 24,169.49, Straits Times down 39.13 points or 1.17% to 3,299.7, Taiwan Weighted down 26.8 points or 0.29% to 9,138.29, KOSPI Index down 26.01 points or 1.36% to 1,888.13, FTSE Bursa Malaysia KLCI down 3.14 points or 0.18% to 1,741.86 and Jakarta Composite down 1.62 points or 0.03% to 5,187.09. While, Shanghai Composite up by 43.99 points or 1.32% to 3,380.45