Benchmarks trade higher in early deals; Nifty surpasses 8,700 mark

Extending their northward journey for fifth day in a row, Indian equity benchmarks have made a positive start and are trading with a gain of around half a percent in early deals on Wednesday with frontline gauges surpassing 8,700 (Nifty) and 28,900 (Sensex) levels. Sentiments remained up-beat on report that foreign institutional investors were net buyers in equities to the tune of Rs 1,276 crore on January 20, 2015, as per provisional stock exchange data.

Global cues too remained supportive with the US markets ending modestly higher in last session ahead of European Central Bank’s monetary policy announcement on Thursday. The Asian markets were trading mostly in the green at this point of time as traders looked ahead to the Bank of Japan's announcement of its monetary decision, after a two-day policy meeting.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. On the sectoral front, banking, capital goods and infrastructure witnessed the maximum gain in trade, while metal, oil and gas and fast moving consumer goods remained the top losers on the BSE sectoral space. The broader indices too were trading in the green, while the market breadth on the BSE was positive; there were 1242 shares on the gaining side against 755 shares on the losing side while 55 shares remain unchanged.

The BSE Sensex is currently trading at 28927.97, up by 143.30 points or 0.50% after trading in a range of 28829.72 and 28953.27. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.41%, while Small cap index up by 0.48%.

The gaining sectoral indices on the BSE were Bankex up by 0.93%, Capital Goods up by 0.87%, INFRA up by 0.86%, Consumer Durables up by 0.70% and PSU up by 0.60% while, Metal down by 0.69%, Oil & Gas down by 0.29%, FMCG down by 0.20% and Healthcare down by 0.06% were the few losing indices on BSE.

The top gainers on the Sensex were HDFC up by 3.00%, SBI up by 2.25%, Maruti Suzuki up by 1.80%, Bharti Airtel up by 1.54% and Larsen & Toubro up by 1.30%. On the flip side, Sesa Sterlite down by 1.77%, Tata Motors down by 0.97%, Cipla down by 0.92%, Dr. Reddys Lab down by 0.82% and ITC down by 0.71% were the top losers.

Meanwhile, the International Monetary Fund (IMF), while slashing global economic growth forecast in 2015 urged the need for all governments and central banks to pursue accommodative monetary policies and structural reforms for supporting growth. In its latest World Economic Outlook report, IMF, lowering its growth forecast by 0.3 percentage points for both the years, pegged global growth at ‘3.5%’ for 2015 and ‘3.7%’ for 2016.

The international organization pointed that new factors supporting growth such as lower oil prices and also depreciation of euro and yen were being more than offset by persistent negative forces, including the lingering legacies of the crisis and lower potential growth in many countries.

It advised advanced economies to maintain accommodative monetary policies to avoid increases in real interest rates as cheaper oil increases the risk of deflation. It further added that if rates couldn’t be further reduced, the countries should pursue an accommodative policy 'through other means'.

However, for India, IMF kept its growth forecast unchanged at 5.8% for 2014 and further underscored that slower growth in china would impact growth in much of emerging Asia except India where weaker external demand was offset by the boost to the terms of trade from lower oil prices and a pickup in industrial and investment activity after policy reforms. It further, highlighted that the US was the only major economy for which growth projections have been raised as growth rebounded ahead of expectations after the contraction in the first quarter of 2014.

IMF projected growth in US to exceed 3% in 2015-16, with domestic demand supported by lower oil prices, more moderate fiscal adjustment, and continued support from an accommodative monetary policy stance, despite the projected gradual rise in interest rates. Meanwhile, for In emerging market and developing economies, IMF expects the growth to remain broadly stable at 4.3% in 2015 and to increase to 4.7 per cent in 2016 -a weaker pace than forecast in the October 2014 WEO.

The CNX Nifty is currently trading at 8736.50, up by 40.90 points or 0.47% after trading in a range of 8697.60 and 8740.50. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were HDFC up by 2.99%, Bank of Baroda up by 2.65%, SBI up by 2.29%, PNB up by 2.22% and Indusind Bank up by 1.54%. On the flip side, Sesa Sterlite down by 2.23%, Cipla down by 1.36%, Cairn India down by 1.17%, NMDC down by 1.14% and Tata Motors down by 1.00% were the top losers.

Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI rose 5.61 points or 0.32% to 1,755.72, Straits Times gained 5.64 points or 0.17% to 3,339.66, Jakarta Composite increased 9.7 points or 0.19% to 5,175.79, Taiwan Weighted jumped 47.6 points or 0.51% to 9,299.29, Shanghai Composite surged 70.82 points or 2.23% to 3,243.87 and Hang Seng was up by 311.11 points or 1.3% to 24,262.27. On the flip side, Nikkei 225 decreased 129.26 points or 0.74% to 17,237.04 and KOSPI Index was down by 3.27 points or 0.17% to 1,915.04.