Benchmarks witness consolidation in early deals on sluggish global cues

Snapping their eight days winning streak, Indian equity benchmarks have made a negative opening and were trading slightly in the red terrain in early deals on Wednesday as investors opted to book some profits off the table amid sluggish global cues. The US markets suffered sharp sell-off, with the Nasdaq snapping its six-day winning streak. Traders reacted negatively to the weak earnings news from several big-name companies, while a report from the Commerce Department showing a substantial decrease in durable goods orders in the month of December, added to the pressure. The Asian markets were trading mixed at this point of time with the Chinese market extending their declining trend for the second straight session, while the Japanese market too has slid on a stronger yen.

Back home, losses remained capped as 29,500 and 8,900 proved to be the strong support levels for Sensex and Nifty, respectively as frontline gauges managed to trade above those levels. Some support came in with Finance Minister Arun Jaitley, ahead of the Budget, underlining the need for tax reforms and quick decision making to ensure stability in policy regime. He has also expressed confidence that the fiscal deficit target of 4.1 percent of the GDP for the current fiscal would be met. Meanwhile, foreign institutional investors were net buyers in Indian equities worth Rs 953.50 crore on January 27, 2015, as per provisional stock exchange data. 

On the sectoral front, consumer durables, realty and software witnessed the maximum gain in trade, while capital goods, metal and auto remained the top losers on the BSE sectoral space. The broader indices, however, were outperforming benchmarks, while the market breadth on the BSE was negative; there were 919 shares on the gaining side against 976 shares on the losing side while 63 shares remain unchanged.

The BSE Sensex is currently trading at 29520.46, down by 50.58 points or 0.17% after trading in a range of 29475.23 and 29583.67. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.56%, while Small cap index up by 0.07%.

The gaining sectoral indices on the BSE were Consumer Durables up by 1.19%, Realty up by 0.97%, IT up by 0.93%, Healthcare up by 0.69% and TECK up by 0.64% while, Capital Goods down by 0.43%, Metal down by 0.41%, Auto down by 0.36%, Bankex down by 0.16% and FMCG down by 0.02% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.49%, Hero MotoCorp up by 1.17%, Maruti Suzuki up by 1.13%, TCS up by 0.97% and Dr. Reddys Lab up by 0.96%. On the flip side, Tata Motors down by 2.31%, Bharti Airtel down by 1.63%, Cipla down by 1.24%, Larsen & Toubro down by 1.04% and HDFC down by 0.93% were the top losers.

Meanwhile, in an encouraging development for the economy, Finance Minister Arun Jaitley underscored fiscal deficit targets for current year, which was once termed as 'difficult' is likely to be achieved. The government has pegged fiscal deficit target at 4.1% of the GDP for the current year. Notably, reflecting a worrisome financial situation, the government’s fiscal deficit at the end of November touched almost 99% of the target for the entire year.  The fiscal deficit, difference between the government’s expenditure and revenues, stood at Rs 5.25 lakh crore, just short of the Rs.5.31 lakh crore target for the entire year.

The minister also pointed to manufacturing sector showing signs of turnaround. After contracting 4.2% in October, industrial production increased at a five-month high of 3.8% in November. The Index of Industrial Production (IIP), which had contracted 1.3% in November 2013, rose 2.2% in the first eight months of this financial year, against only 0.1 per cent in the corresponding period of 2013-14.

He asserted that despite the revenue being challenging due to slow manufacturing industry, the economy was turning around and sufficient enough to achieve fiscal deficit targets.

The minister, while pointing to the plight of others nations like Brazil, South Africa, China and Europe, highlighted that India was performing relatively well.  He pointed that while China which maintained a growth rate of over 9% over 3 decades was looking at new normal, India’s growth after witnessing depressing slowdown in last 2-3 years, was looking up.

The CNX Nifty is currently trading at 8902.95, down by 7.55 points or 0.08% after trading in a range of 8889.10 and 8920.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.51%, Tech Mahindra up by 2.24%, Asian Paints up by 2.07%, Ultratech Cement up by 2.07% and IDFC up by 1.96%. On the flip side, Bharti Airtel down by 2.30%, Tata Motors down by 2.27%, Cairn India down by 2.09%, NMDC down by 1.59% and Cipla down by 1.46% were the top losers.

Asian markets were trading mixed; Straits Times rose 0.82 points or 0.02% to 3,413.02, KOSPI Index increased 4.21 points or 0.22% to 1,956.61, Nikkei 225 gained 36.82 points or 0.21% to 17,805.12 and Hang Seng was up by 81.74 points or 0.33% to 24,889.02.

On the flip side, Shanghai Composite declined 28 points or 0.83% to 3,324.96, Taiwan Weighted slipped 13.5 points or 0.14% to 9,508.09, FTSE Bursa Malaysia KLCI dipped 5.21 points or 0.29% to 1,797.96 and Jakarta Composite was down by 1.2 points or 0.02% to 5,275.95.