Benchmarks trade in fine fettle in early deals

Indian equity benchmarks, after a weak start, bounced back in green as market participants reacted positively to advanced Gross Domestic Product (GDP) estimate, according to which the economy is poised to grow 7.4% in the current year, bettering 6.9% recorded last year. According to the latest revised GDP numbers, based on the new gross value added (GVA) methodology, Indian economy grew at a much faster pace of 6.9 per cent in fiscal year 2014, compared with 4.7 per cent using the old method. In the third quarter ending December, the economy grew at 7.5 per cent, tad lesser than the second quarter growth of 8.2 percent. Meanwhile, Finance Minister Arun Jaitley has said that the government will make efforts to keep fiscal deficit within the targeted limit even as investments remain a challenge.

On the global front, the US markets ended lower in last session on renewed concerns about the situation in Greece; with the losses on the day, the major averages slid back into negative territory for the New Year. The Asian markets were trading mixed with some indices were trading in red as fears of a Greek debt default and exit from the eurozone escalated.

Back home, with trends in the Delhi elections pointing to an AAP clean sweep, select stocks from power space remained under pressure. On the sectoral front, metal, banking and auto witnessed the maximum gain in trade, while software and technlogy remained the top losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 1322 shares on the gaining side against 531 shares on the losing side while 46 shares remain unchanged.

The BSE Sensex is currently trading at 28359.05, up by 131.66 points or 0.47% after trading in a range of 28044.49 and 28522.77. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.86%, while Small cap index gained 0.84%.

The top gaining sectoral indices on the BSE were Metal up by 1.27%, Bankex up by 1.19%, Auto up by 1.05%, PSU up by 0.83%, Consumer Durables up by 0.80% while, TECK down by 0.32%, IT down by 0.29% were the only losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 3.62%, Tata Motors up by 2.17%, SBI up by 1.82%, GAIL India up by 1.81% and BHEL up by 1.47%. On the flip side, Sun Pharma down by 1.50%, Larsen & Toubro down by 0.79%, Wipro down by 0.49%, Hero MotoCorp down by 0.35% and Bharti Airtel down by 0.34% were the top losers.

Meanwhile, in what could be an extremely encouraging development for the economy, global brokerage firm, HSBC, underscored that India’s current account deficit will bounce back in surplus after a span of 32 quarters of deficit, for January-March quarter. Further, it expects the deficit to halve to 0.60% of GDP in 2015-16 and remain at manageable levels the year after, on account of receding oil prices, which makes import cheaper.

Crude prices slipped to multi years low between June 2014 and January 2015, reflecting higher-than-expected oil and shale gas production in the US and lower demand in emerging markets coupled with OPEC's refusal to lower output. In the December quarter alone crude prices have fallen around 60%, further positive for the economy.

In other positive for the economy, HSBC pared its oil price expectation to just over $60/barrel for end-2015, further rising it to $68/barrel by the end of 2016, highlighting that a benign impact across India's macro economy, ranging from an improved growth outlook and lower inflation, to healthier fiscal accounts.

In a bit of concern, HSBC has lowered its GDP’s projection at 5.3% in FY15 as against 5.5% earlier, and further pared it to 6.3% in FY16 from 6.5% and 6.8% in FY17 against 7.1%.

The CNX Nifty is currently trading at 8568.25, up by 41.90 points or 0.49% after trading in a range of 8470.50 and 8613.35. There were 33 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 3.62%, PNB up by 2.85%, IDFC up by 2.26%, Indusind Bank up by 2.15% and Tata Motors up by 2.00%. On the flip side, DLF down by 2.32%, HCL Tech. down by 2.13%, Tech Mahindra down by 1.79%, Sun Pharma down by 1.32% and BPCL down by 0.98% were the top losers.

Asian markets traded mixed; FTSE Bursa Malaysia KLCI increased 3.34 points or 0.18% to 1,814.92, Hang Seng rose 5.47 points or 0.02% to 24,526.47, Straits Times advanced 12.85 points or 0.38% to 3,430.87 and Shanghai Composite was up by 25.85 points or 0.84% to 3,120.97.

On the flip side, Nikkei 225 decreased 136.13 points or 0.77% to 17,575.80, Taiwan Weighted slipped 22.74 points or 0.24% to 9,398.76, Jakarta Composite shed 7.51 points or 0.14% to 5,340.96 and KOSPI Index was down by 6.08 points or 0.31% to 1,940.92.