Benchmarks continue to trade in green in late morning session

After a positive opening, benchmarks continue to hold their head above water on sustained and selective buying by funds and retail investors ahead of key events including Economic Survey, Railway Budget and Union Budget along with the expiry of February series due later during the week. Sentiment on the street improved with President Pranab Mukherjee’s statement that the latest estimates of India`s gross domestic product (GDP) growth making it the fastest growing large economy in the world, is the Narendra Modi-led government`s most significant achievement till date. Mukherjee also said that the government had taken several initiatives including smart cities, skill development, ease of doing business and tapping the country's demographic dividend.  Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 602 crore on February 23, 2015.

The market is likely to remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month February 2015 series to March 2015 series. The February derivatives contracts expire on Thursday. Furthermore, the government will announce the railway budget on 26 February and the national budget on 28 February. Investors will look for the direction of government policy through these two announcements and will keep an eye on annual economic outlook survey on February 27, 2014.

On global front, Asian indices except Hong Kong advanced to hit new highs, but trading remained cautious ahead of Federal Reserve Chair Janet Yellen's testimony before Congress over the next two days, which could give clues on the possible timeline of a rate hike in the US. Back home, Indian rupee strengthened by 6 paise to 62.25 against the dollar in early trade on fresh selling of the US currency by exporters and banks.  Back on street, stocks from FMCG, Realty and IT counters were supporting the markets’ uptrend, while those from Banking, Oil & Gas and Metal counters were adding to the underlying cautious undertone. In scrip specific development, Zee Media soared on getting SEBI nod to raise up to Rs 200 crore through rights issue. Furthermore, shares of Dewan Housing Finance Corporation rose after the company said its shareholders approved raising Rs 1000 crore via qualified institutional placement.

The market breadth on BSE was negative, out of 2253 stocks traded, 978 stocks advanced, while 1163 stocks declined on the BSE. 

The BSE Sensex is currently trading at 29019.14, up by 44.03 points or 0.15% after trading in a range of 28959.39 and 29054.82. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading  marginally in red; the BSE Mid cap index was down by 0.01%, while Small cap index was lower by0.30%.

The top gaining sectoral indices on the BSE were FMCG up by 1.13%, Realty up by 1.08%, IT up by 0.71%, Capital Goods up by 0.53% and TECK up by 0.52% while, Bankex down by 0.58%, Oil & Gas down by 0.49%, Metal down by 0.46%, Auto down by 0.46% and PSU down by 0.33% were the losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.50%, Hindustan Unilever up by 1.28%, Wipro up by 1.14%, Larsen & Toubro up by 1.02% and Cipla up by 0.88%. On the flip side, Sesa Sterlite down by 2.03%, Tata Motors down by 1.57%, Tata Steel down by 1.10%, ONGC down by 1.03% and SBI down by 1.03% were the top losers.

Meanwhile, global rating agency Standard & Poor's (S&P) has said that India must boost growth, cut its fiscal deficit and fulfill promises of financial and fiscal reforms in order to justify an upgrade in a credit rating, currently lodged one rung above junk bond territory. Days ahead of the budget, S&P while listing what it needed to see to upgrade India's sovereign debt credit rating from 'BBB-minus' said that it expects the government's fiscal consolidation plan of progressively lower deficits to ease the debt and interest burden.

The rating agency further stated that crucial factors include higher growth in real per capita GDP, stronger fiscal and debt metrics, and a stronger external position or improved monetary policy setting, and the government's ability to fulfill its promises on key reforms will be critical to the country's success and the country's strong external balance sheet only partly offsets these weaknesses.

Adding that the country's fiscal and debt indicators are the weakest among peers like Brazil and Indonesia, it said that improvements in India's weak fiscal balance sheet are likely to be gradual and are thus unlikely to lead to a rating upgrade in the next three to five years. Though, it noted that India's high savings and investment rates along with the country's favourable demographics, with 87 per cent of the population aged 54 or below, could help it to grow quickly. The report said that India's strong external balance sheet was a support to the sovereign rating. S&P had raised India's credit rating outlook to 'stable' from 'negative' in September, citing the prospect of reforms.

The CNX Nifty is currently trading at 8766.35, up by 11.40 points or 0.13% after trading in a range of 8744.50 and 8777.40. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.99%, ITC up by 1.51%, BPCL up by 1.19%, Hindustan Unilever up by 1.18% and Wipro up by 1.12%. On the flip side, Bank of Baroda down by 3.04%, Jindal Steel & Power down by 2.33%, Cairn India down by 2.14%, Sesa Sterlite down by 2.07% and PNB down by 1.62% were the top losers.

Most of the Asian equity indices were trading in the green; Straits Times rose 0.11%, FTSE Bursa Malaysia KLCI increased 0.24%, KOSPI Index jumped 0.53%, Jakarta Composite advanced 0.29%, Nikkei 225 added 0.57% and Taiwan Weighted was up by 0.99%. On the flip side, Hang Seng was down by 0.57%.