Benchmarks trade higher in early deals on firm global cues

Extending their winning streak for third day in a row, Indian equity benchmarks have made a positive start and are trading jubilantly in early deals on Monday on supportive global cues. The US markets ended higher in last session supported by sharp increase by the price of crude oil, with crude for February delivery jumping $2.44 to $48.69 a barrel. The Asian markets too were trading mostly in the green at this point of time, led by materials companies, after oil rebounded and U.S. consumer confidence jumped to an 11-year high.

Back home, some support also came in from reports that the FDI for April-November period of the ongoing fiscal, grew by 22% to $ 18.88 billion as against $ 15.45 billion in the same period a fiscal before. Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 1,100 crore on January 16, 2015, as per provisional stock exchange data. Rally in software and technology counters too aided sentiments, led by the strong gains in Wipro which has surged around 6% post its better-than-expected third quarter earnings on the back of dollar revenue growth.

On the sectoral front, consumer durables, realty and infrastructure witnessed the maximum gain in trade, while fast moving consumer goods remained the top loser on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1472 shares on the gaining side against 537 shares on the losing side while 49 shares remain unchanged.

The BSE Sensex is currently trading at 28300.40, up by 178.51 points or 0.63% after trading in a range of 28228.19 and 28301.13. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.94%, while Small cap index up by 1.01%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.48%, Realty up by 1.40%, Infrastructure up by 1.27%, Capital Goods up by 1.11%, Bankex up by 0.99% while, FMCG down by 0.16% was the lone losing index on BSE.

The top gainers on the Sensex were Wipro up by 7.16%, GAIL India up by 2.23%, Axis Bank up by 1.92%, ONGC up by 1.57% and Hindalco up by 1.41%. On the flip side, Hindustan Unilever down by 1.57%, Infosys down by 0.42%, ITC down by 0.40%, Bajaj Auto down by 0.37% and TCS down by 0.31% 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 8558.80, up by 45.00 points or 0.53% after trading in a range of 8538.85 and 8561.95. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Wipro up by 7.31%, GAIL India up by 2.53%, HCL Tech up by 2.43%, Axis Bank up by 1.95% and Grasim Industries up by 1.81%. On the flip side, Hindustan Unilever down by 1.42%, BPCL down by 0.92%, Kotak Mahindra Bank down by 0.74%, ITC down by 0.69% and Power Grid down by 0.68% were the top losers.

Most of the Asian equity indices were trading in the green; FTSE Bursa Malaysia KLCI rose 4.86 points or 0.28% to 1,748.43, Jakarta Composite added 4.96 points or 0.1% to 5,153.34, Straits Times gained 5.86 points or 0.18% to 3,306.54, KOSPI Index surged 16.27 points or 0.86% to 1,904.40, Taiwan Weighted increased 31.73 points or 0.35% to 9,170.02 and Nikkei 225 was up by 144.53 points or 0.86% to 17,008.69. On the flip side, Hang Seng decreased 274.65 points or 1.14% to 23,828.87 and Shanghai Composite was down by 212.78 points or 6.3% to 3,163.72.