Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on sustained overseas fund inflows and better-than-expected quarterly earnings. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments. 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. On global front, Asian markets were trading mostly in the green, led by materials companies, after oil bounced back and US consumer confidence soared to an 11-year high. However, Chinese shares recoiled after regulators took steps to rein in speculative lending there, while investors everywhere were wary of being disappointed by the latest efforts at policy stimulus in the euro zone. Back home, Indian rupee gained 29 paise to trade at a near 2-month high of 61.58 against the Greenback in early trade on continued selling of the US dollar by exporters and banks.

Back on street, all BSE sectoral indices were trading in the positive territory with Consumer Durables, Infrastructure and Oil & Gas indices trading higher by over 1%. In scrip specific development, shares of Wipro surged after reported a better-than-expected 5% quarter on quarter growth in net profit at Rs 2,192 crore for the financial year’s third quarter ended December 31, 2014. On the other hand, shares of Unichem Laboratories have declined after the company reported weak third quarter earnings on the back of higher raw material, employee benefits costs and other expenses.

The market breadth on BSE was positive, out of 2359 stocks traded, 1606 stocks advanced, while 703 stocks declined on the BSE.

The BSE Sensex is currently trading at 28283.73, up by 161.84 points or 0.58% after trading in a range of 28228.19 and 28327.37. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.80%, while Small cap index up by 0.98%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.56%, INFRA up by 1.31%, Oil & Gas up by 1.11%, Realty up by 0.94% and Capital Goods up by 0.89%, while there were no losers on the index.

The top gainers on the Sensex were Wipro up by 6.57%, GAIL India up by 4.00%, Axis Bank up by 2.09%, Cipla up by 1.51% and Hindalco up by 1.41%. On the flip side, Hindustan Unilever down by 1.99%, TCS down by 0.80%, Infosys down by 0.52%, Bajaj Auto down by 0.50% and HDFC down by 0.40% were the top losers.

Meanwhile, Foreign direct investment (FDI) in India declined by 6% to $1.53 billion in the month of November 2014 as compared to $1.63 billion in the same month of previous year. However, FDI during the April-November FY15 increased by 22% y-o-y to $18.88 billion from $15.45 billion recorded in the corresponding period of the previous fiscal. The sectors that received highest inflows during the first eight months of current fiscal include telecommunications ($2.47 billion), services ($1.84 billion) automobile ($1.53 billion), pharmaceuticals ($1.15 billion) and computer software and hardware ($862 million). Country wise, maximum FDI during the reported period was received form Mauritius with $5.20 billion followed by Singapore ($3.74 billion), Netherlands ($2.42 billion), the US ($1.35 billion) and Japan ($1.28 billion).

During FY14, FDI increased by 8% to $24.29 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.

In order to encourage manufacturing of equipments, including diagnostic kits and other devices, the government also allowed 100 percent FDI under automatic route in medical devices sector. 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 8560.45, up by 46.65 points or 0.55% after trading in a range of 8538.85 and 8570.95. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Wipro up by 6.75%, GAIL India up by 3.91%, HCL Tech up by 2.36%, IDFC up by 2.19% and Axis Bank up by 2.15%. On the flip side, Hindustan Unilever down by 1.83%, Power Grid down by 0.98%, TCS down by 0.91%, Kotak Mahindra Bank down by 0.73% and BPCL down by 0.65% were the top losers.

Most of the Asian equity indices were trading in the green; FTSE Bursa Malaysia KLCI 0.34%, Jakarta Composite added 0.03%, Straits Times gained 0.18%, KOSPI Index surged 0.79%, Taiwan Weighted increased 0.26% and Nikkei 225 was up by 0.71%. On the flip side, Hang Seng decreased 1.14% and Shanghai Composite was down by 6.3%.