Benchmarks continue firm trade in late afternoon session

Indian equity markets continued their firm trade in the late afternoon session on account of buying in frontline blue chip counters and taking cues from global counterparts. Investors however turned wary after RBI Deputy Governor H R Khan stated that though the country’s forex kitty was at an all-time high of $330 billion, it may not cushion extreme volatility. Investors started eyeing the Index of Industrial Production (IIP) and Consumer Price Index (CPI) data scheduled on February 12. Traders were seen piling position in Capital Goods, Power and Bankex sector stocks. In scrip specific development, National Buildings Construction Corporation (NBCC) was trading in green after it announced that it has secured project management and consultancy (PMC) business worth Rs 231.40 crore from Indian Institute of Technology (IIT), Roorkee. JP Associates was trading in red after its losses further widened in December quarter. Its net loss widened to Rs 116.09 crore for the quarter ended December 31, 2014.

On the global front, the Asian markets were trading mostly in green, while the European markets were trading mostly on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 8,600 and 28,400 levels respectively. The market breadth on BSE was positive in the ratio of 1517:1078 while 102 scrips remained unchanged.

The BSE Sensex is currently trading at 28494.87, up by 139.25 points or 0.49% after trading in a range of 28424.39 and 28618.91. 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 0.91%, while Small cap index up by 1.08%.

The gaining sectoral indices on the BSE were Capital Goods up by 1.53%, Power up by 1.03%, Bankex up by 0.95%, Metal up by 0.78%, FMCG up by 0.59%

The top gainers on the Sensex were Larsen & Toubro up by 2.24%, ICICI Bank up by 1.90%, Coal India up by 1.87%, Axis Bank up by 1.86% and Reliance Industries up by 1.82%. On the flip side, ONGC down by 2.80%, BHEL down by 2.18%, Tata Motors down by 1.40%, Bharti Airtel down by 1.29% and Mahindra & Mahindra down by 1.26% were the top losers.

Meanwhile, after India’s forex reserves hit a new high of $327.88 billion in the week ended January 30, RBI Deputy Governor H R Khan has said that though the country’s forex kitty was at an all-time high, there should be no complacency as no amount of reserves may be enough to fight extreme volatility, as the shift in the US Fed’s policies to tighten may result in withdrawal of money from emerging markets like India.

The deputy governor has said that “We are much better placed. In terms of fool-proofing our balance sheet we have done quite a few things,” but we can’t afford to be complacent and we should be prepared to face vulnerabilities.

The surging reserves come as foreign investors have continued to be hefty buyers of bonds and shares because of expectations for economic reforms from Prime Minister Narendra Modi's government.

Khan further stated that there might be views that RBI has been focusing on accumulating dollars to fight any external challenges in future, as the forex reserves had depleted to $280 billion and the RBI had to sell to arrest a single way slide in the rupee after the May 2013 announcement by the US Fed to taper its liquidity infusing programme, which resulted in fund outflows from India. It was the worst rupee turmoil since a balance of payment crisis a decade ago because of dwindling reserves and a high current account deficit.

The CNX Nifty is currently trading at 8619.25, up by 53.70 points or 0.63% after trading in a range of 8593.65 and 8651.95. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.53%, Indusind Bank up by 2.34%, Coal India up by 2.05%, NTPC up by 2.01% and Axis Bank up by 1.93%. On the flip side, ONGC down by 2.92%, Zee Entertainment down by 2.01%, BHEL down by 1.87%, Tata Motors down by 1.61% and Cairn India down by 1.54% were the top losers.

The Asian markets were trading mostly in green; KOSPI Index increased 9.84 points or 0.51% to 1,945.70, Straits Times increased 10.76 points or 0.31% to 3,445.00, Jakarta Composite increased 10.99 points or 0.21% to 5,332.47, Shanghai Composite increased 16.11 points or 0.51% to 3,157.70 and Taiwan Weighted increased 68.52 points or 0.73% to 9,462.22.

On the other hand, Hang Seng decreased 213.08 points or 0.87% to 24,315.02 and FTSE Bursa Malaysia KLCI decreased 10.43 points or 0.58% to 1,800.69.

Japan’s Stock Exchange was closed on account of ‘National Founding Day’ holiday.

The European markets were trading mostly in red; France’s CAC decreased 5.76 points or 0.12% to 4,689.89 and UK’s FTSE 100 decreased 2.14 points or 0.03% to 6,826.98, while Germany’s DAX increased 27.65 points or 0.26% to 10,781.48.