Markets continue to hold steady on sustained buying activities

Holding steady, local equity markets were trading with gains of around three tenths of a percent, which lifted Sensex above psychologically crucial 28, 950 level, while Nifty was trading at sniffing distance of 8,700 levels. Meanwhile, broader indices also were trading upbeat with gains in the range of 0.15%-0.45%.  Sustained buying activities by both funds and retail investors amidst pre-budget optimism on Street, mainly buoyed the sentiment. Besides, hopes of better than expected earnings by corporates also added to the positive milieu.

Local equity markets in line with regional counterparts were trading upbeat as investors bet on the likely size and scope of a bond-buying program the European Central Bank is poised to unveil later in the day as it attempts to revive the flagging euro zone economy. Reports suggest that ECB's Executive Board has proposed a quantitative easing (QE) program that would enable the bank to buy 50 billion euros ($58 billion) in bonds a month from March.

Closer home, most of the sectoral indices on BSE were trading into positive territory, stocks from Capital Goods, Auto and Information Technology counter were the prominent gainers of the session. On the flip side, stocks from Oil & Gas, Consumer Durables and Infrastructure counters were witnessing heavy drubbing.  Meanwhile, real estate developers and cement companies shares were in limelight after the Prime Minister's Office (PMO) yesterday, 21 January 2015, announced that Prime Minister Narendra Modi has directed all concerned departments to immediately finalise the programme and finalise the financing models for alternate sets of housing requirements with regard to the government's Housing for All Mission. The overall market breadth on BSE was in the favour of declines which have thumped advances in the ratio of 1413:1258; while 100 shares remained unchanged.

The BSE Sensex is currently trading at 28973.42, up by 84.56 points or 0.29% after trading in a range of 28941.93 and 29060.41. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.16%, while Small cap index up by 0.47%.

The gaining sectoral indices on the BSE were Capital Goods up by 0.70%, Auto up by 0.54%, IT up by 0.42%, FMCG up by 0.40%, TECK up by 0.29% while, Oil & Gas down by 0.91%, Consumer Durables down by 0.61%, INFRA down by 0.52%, Realty down by 0.26%, PSU down by 0.22% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 3.84%, Axis Bank up by 2.11%, Tata Motors up by 1.74%, Infosys up by 1.40% and Hindustan Unilever up by 1.23%. On the flip side, NTPC down by 1.98%, Reliance Industries down by 1.97%, SBI down by 0.94%, Hero MotoCorp down by 0.87% and Hindalco down by 0.73% were the top losers.

Meanwhile, ahead of the Budget 2014-15, the Expenditure Management Commission (EMC), headed by Bimal Jalan, has recommended the government to cut fiscal deficit to 3.6% of the GDP during 2015-16. The commission reviewed the major areas of central government expenditure and suggested ways to create fiscal space required to meet developmental expenditure needs.

The panel report, which was submitted to government on January 17, suggested ways to achieve a reduction in financial costs through better cash management, greater use of information technology and improved financial reporting systems. It also entrusted with designing a framework to improve operational efficiency of expenditures through focus on utilisation, targets and outcomes.

The government subsidy bill stands at around 2 lakh crore, playing an important role for widening the fiscal deficit. The subsidy bill on food, petroleum and fertilisers is estimated at Rs 2,51,397 crore for 2014-15, up 2.47 percent over the previous fiscal.  The government has pegged total fertiliser subsidy higher at Rs 72,970.30 crore for full fiscal than Rs 67,970 crore proposed in the interim budget.  The government has allocated Rs 1,15,000 crore for food security, which include a provision of Rs 88,500 crore for implementation of National Food Security Act. 

The CNX Nifty is currently trading at 8745.75, up by 16.25 points or 0.19% after trading in a range of 8734.90 and 8772.70. There were 27 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Sun Pharma Inds. up by 3.87%, Asian Paints up by 2.31%, Ultratech Cement up by 2.20%, Axis Bank up by 2.03% and Tata Motors up by 1.70%. On the flip side, Reliance Industries down by 2.24%, NTPC down by 1.88%, HCL Tech. down by 1.62%, Cairn India down by 1.49% and PNB down by 1.20% were the top losers.

Asian markets were trading mostly higher; with FTSE Bursa Malaysia KLCI trading higher by 9.63 points or 0.54% to 1,779.72;  Shanghai Composite trading higher 13.37 points or 0.4% to 3,336.98;  Straits Times trading higher 17.91 points or 0.53% to 3,372.37;  Jakarta Composite trading higher 35.11 points or 0.67% to 5,250.38;  Nikkei 225 trading higher 48.54 points or 0.28% to 17,329.02;  Taiwan Weighted trading higher 49.8 points or 0.53% to 9,369.51;  Hang Seng trading higher 191.21 points or 0.79% to 24,543.79. On the flip side, KOSPI Index down by 0.41 points or 0.02% to 1,920.82 was the lone loser on the index.