Benchmarks continue to trade firm in late morning session

Indian equity benchmarks extended early gains to continue firm trade in late morning session, on fresh buying by funds and retail investors ahead of Economic Survey to be tabled in Parliament today. Economic Survey reviews the developments in the Indian economy over the previous 12 months, summarizes the performance on major development programmes, and highlights the policy initiatives of the government and the prospects of the economy in the short to medium term.

Sentiment on the street improved with Standard and Poor’s (S&P) latest release who not only has raised the GDP growth forecast but also said that Indian economy is a ‘bright spot’ in Asia. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 2312.15 crore on February 26, 2015. However, some Investors remained cautious ahead of fiscal deficit data for the month of January which the government will issue after market hours on Friday. For April-December deficit was at Rs.5.32 trillion, or 100.2% of the full-year target.

On global front, Asian stocks were lacklustre on Friday after US markets drifted lower and Japan reported faster growth in factory output but weaker retail sales. Besides, Investors are waiting on revised fourth quarter US gross domestic product data due later on Friday for another health check of the world's largest economy. Back home, Indian rupee weakened by 10 paise to 61.85 against the US dollar in early trade due to rise in the greenback’s value against other currencies overseas. Back on street, barring FMCG, all other BSE sectoral indices were trading significantly in the green. Among them, realty index was the star-performer and was up 2.88 percent, followed by metal 2.75 percent and capital goods 2.66 percent, while only FMCG index was down 1.17 percent. In scrip specific development, shares of Minda Industries have surged after the company entered into a joint venture with a Kosei Group company for manufacturing and supply of alloy wheels for passenger vehicles. On the other hand, shares of DLF declined after the Securities and Exchange Board of India (Sebi) imposed a total penalty of Rs 86 crore on DLF, its top officials and some of its subsidiaries, after finding them guilty of engaging in unfair trade practices.

The market breadth on BSE was positive, out of 2321 stocks traded, 1446 stocks advanced, while 792 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28907.84, up by 161.19 points or 0.56% after trading in a range of 28857.82 and 28991.40. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.95%, while Small cap index surged by 1.01%.

The top gaining sectoral indices on the BSE were Realty up by 2.88%, Metal up by 2.75%, Capital Goods up by 2.66%, Power up by 1.34% and Auto up by 1.14%, while FMCG down by 1.17% was the only losing index on BSE.

The top gainers on the Sensex were Tata Power up by 3.99%, Sesa Sterlite up by 3.31%, Larsen & Toubro up by 3.31%, Hindalco up by 2.87% and Coal India up by 2.59%. On the flip side, ITC down by 2.19%, GAIL India down by 1.40%, Dr. Reddys Lab down by 0.79%, TCS down by 0.66% and Hindustan Unilever down by 0.52% were the top losers.

Meanwhile, giving a shot in arm to the government, the global rating agency Standard & Poor’s (S&P) has sharply revised India's growth forecast for the next several years to reflect a recent change in how gross domestic product is calculated by the government. S&P revised upwards GDP growth forecast to 7.9% for 2015-16 and 8.2% in the year after, crediting the move to rising investment and fall in oil prices. The agency also raised its growth forecast for 2016-17 to 8.2 percent from 6.6 percent previously.

S&P  which currently rates India at “BBB-“ with a “stable” outlook had recently said that India must boost growth, cut its fiscal deficit and fulfill promises of financial and fiscal reforms to justify an upgrade in a credit rating, has now said that the Indian economy should be a 'bright spot' in Asia.

Regarding Asia-Pacific, the agency said growth in the region will be slightly lower, but India's “star is rising.” It also lowered growth forecasts for a slew of Asian countries, including China and Japan and said that weaker growth in China and Japan may be weighing on the overall sentiment.

S&P’s earlier projection of 6.2 per cent in 2015-16 and 6.6 per cent in 2016-17 of Indian economy were based on the old definition of gross domestic product (GDP) and the base year. The revisions come after India changed the way to measure the economy. Though, S&P has not specified that it had revised its estimates on the basis of the revisions in GDP computation.

The CNX Nifty is currently trading at 8740.90, up by 57.05 points or 0.66% after trading in a range of 8721.20 and 8758.20. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Jindal Steel & Power up by 9.77%, Tata Power up by 4.23%, Larsen & Toubro up by 3.62%, Sesa Sterlite up by 3.48% and Hindalco up by 2.87%. On the flip side, ITC down by 2.19%, BPCL down by 1.58%, GAIL India down by 1.14%, Dr. Reddys Lab down by 1.02% and Wipro down by 0.74% were the top losers.

Asian markets were showing a negative trend in late morning session, Jakarta Composite down by 0.04%, Nikkei 225 was down by 0.28%, FTSE Bursa Malaysia KLCI declined by 0.23%, KOSPI Index was lower by 0.1% and Straits Times was marginally in red down by 0.01%. On the other hand, Shanghai Composite was higher by 0.58% and Hang Seng surged by 0.56%.