Benchmarks trim gains; trade continues in green

Indian equity benchmarks paired some early gains and were trading in a narrow range with a positive bias in late morning session on sustained fund inflows, driven by the encouraging corporate earnings coupled with pre-budget optimism among participants. Sentiments got a boost as Commerce and Industry Minister Nirmala Sitharaman has asserted that India will continue to introduce reforms including through the use of ordinances to make it easier for companies to do business in India. 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 foreign portfolio investors (FPIs) bought shares worth a net Rs 1,276 crore on January 20, 2015. However, gains remained capped as minor profit booking in some companies whose share prices have appreciated sharply.

On global front, most Asian stock markets rose as investors anticipated European policymakers would soon unleash more stimulus, while Chinese shares extended their rebound following a steep plunge at the start of the week. Back home, Indian rupee strengthened by 9 paise to 61.60 against the US dollar in early trade, extending its rising streak for the fifth straight day on selling of the US currency by exporters and banks.

Back on street, stocks from Infrastructure, Banking and Capital Goods counters were supporting the markets’ uptrend, while those from Metal, Oil & Gas and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, shares of Navin Fluorine International have surged after the company’s net profit more than doubled to Rs 14.20 crore in the third quarter ended December 31, 2014. on the flip side, Shares of Rallis India have declined after the company reported 17% decline in consolidated net profit at Rs 25 crore for the quarter ended December 2014.

The market breadth on BSE was positive, out of 2402 stocks traded, 1225 stocks advanced, while 1095 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28906.09, up by 121.42 points or 0.42% after trading in a range of 28829.72 and 28958.10. 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 0.17%, while Small cap index up by 0.21%.

The gaining sectoral indices on the BSE were INFRA up by 0.96%, Bankex up by 0.84%, Capital Goods up by 0.78%, TECK up by 0.52% and PSU up by 0.51% while, Metal down by 1.33%, Oil & Gas down by 0.65%, FMCG down by 0.31%, Realty down by 0.26% and Power down by 0.12% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.24%, SBI up by 2.66%, HDFC up by 2.61%, Maruti Suzuki up by 2.19% and Hindustan Unilever up by 1.39%. On the flip side, Sesa Sterlite down by 2.85%, Hindalco down by 1.56%, Tata Steel down by 1.43%, Tata Motors down by 1.21% and BHEL down by 1.19% were the top losers.

Meanwhile, the International Monetary Fund (IMF) has projected Indian economic growth at 6.3% this year and 6.5% in 2016. Terming the new government's reforms as 'promising, the IMF, in its latest report namely ‘World Economic Report update’ has highlighted that Indian economic growth at  6.5% in 2016 will surpass China's projected growth rate of 6.3%. However, it cautioned that implementation of reform is key to boost the economic growth.

Further, it noted that lower oil prices and a pickup in industrial and investment activity after policy reforms are likely to provide impetus to economic growth. After registering an average growth rate of 8% during FY08-FY12, Indian economic growth had slowed down to below 5% over the last two financial years. The factors like high interest rate and stubborn inflation, low investments and slow execution of infrastructure projects have impacted country’s economy growth.  However, the domestic economy has shown signs of nascent recovery and expanded at 5.5% during first half of this fiscal as compared to 4.9% in the same period of previous fiscal. 

On global front, IMF lowered its growth forecast by 0.3 percentage points to 3.5% for 2015 and 3.7% for 2016 and urged all governments and central banks to pursue accommodative monetary policies and structural reforms for supporting growth. It advised advanced economies to maintain accommodative monetary policies to avoid increases in real interest rates as cheaper oil increases the risk of deflation.

The CNX Nifty is currently trading at 8725.50, up by 29.90 points or 0.34% after trading in a range of 8697.60 and 8741.85. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 4.32%, Bharti Airtel up by 2.99%, SBI up by 2.66%, HDFC up by 2.56% and PNB up by 2.17%. On the flip side, Sesa Sterlite down by 3.04%, NMDC down by 1.92%, Hindalco down by 1.73%, Cipla down by 1.56% and DLF down by 1.48% were the top losers.

Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI rose 0.35%, Straits Times gained 0.16%, Jakarta Composite increased 0.04%, Taiwan Weighted jumped 0.52%, Shanghai Composite surged 2.23% and Hang Seng was up by 1.3%. On the flip side, Nikkei 225 decreased 0.70% and KOSPI Index was down by 0.13%.