Benchmarks continue firm trade in late afternoon session

Indian equity markets added gains and continued trading in green in late afternoon session on account of buying in frontline blue chip counters.  The markets were firm from the early trade after the Reserve Bank of India (RBI), in a surprise move and prompt reaction to the Budget 2015-16, cut repo rate by 25 basis points or 0.25 percent to 7.5 percent, giving its affirmation to the fiscal consolidation measures announced by the government in the Budget. Traders were seen piling positions in FMCG, Realty and Bankex stocks while selling was witnessed in Metal, IT and TECK sector stocks. In scrip specific development, Mcnally Bharat Engineering Company was trading in green after the company allotted shares 4.5 million shares to Rekha Rakesh Jhunjhunwala and Williamson Magor & Company.

On the global front, the Asian markets were trading mostly in red while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 9,050 and 29,800 levels respectively. The market breadth on BSE was negative in the ratio of 1304:1444 while 117 scrips remained unchanged.

The BSE Sensex is currently trading at 29822.37, up by 228.64 points or 0.77% after trading in a range of 29699.71 and 30024.74. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index up by 0.36%.

The gaining sectoral indices on the BSE were FMCG up by 2.04%, Realty up by 1.70%, Bankex up by 0.92%, Capital Goods up by 0.85%, Auto up by 0.70% while, Metal down by 0.77%, IT down by 0.76%, TECK down by 0.35%, Oil & Gas down by 0.34%, PSU down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 7.54%, ICICI Bank up by 3.11%, ITC up by 2.42%, HDFC up by 2.16% and Bharti Airtel up by 1.82%. On the flip side, Hindalco down by 2.50%, Wipro down by 1.59%, Tata Power down by 1.26%, Sesa Sterlite down by 1.20% and Coal India down by 1.13% were the top losers.

Meanwhile, Chief Economic Adviser (CEA) Arvind Subramanian underscored that the ambitious 8.1-8.5% economic growth projected for the next fiscal in Finance Minister Arun Jaitley's Budget is more like a 'statistical and not a real number”. The minister highlighted that to achieve a particular growth rate, it was important to estimate tax revenue, which are just not fanciful assumptions, but solid achievable figures.

However, the minister highlighted that the government expects 15.8% growth in revenue collection this year and that this number was very much achievable and that with the growth rate of 8-8.5%, one should view the economy as “recovering economy” and not “surging economy”.

He highlighted that “8.5%” growth figure was 'directionally' fine since there was an uptick in the growth rate from 2013-14 to 2014-15. On being questioned about credibility of the economic growth projection, Finance Minister highlighted the budget was based on projections about nominal GDP growth, which is the sum of real GDP growth and inflation.

Before the (revised) numbers came out, he highlighted that the government was expecting a nominal GDP growth of 11.5%, broadly which was about 6.5% of GDP growth and 4.5% on inflation. However, the minister highlighted that with the release of new numbers though real GDP growth had gone up, the inflation numbers had actually come down. And hence, relevant numbers used for tax revenues and tax revenue projections remained same as before. So in that sense, for the revenue projections the new statistical numbers did not make difference.

Lastly, on bank recapitalization, Subramanian highlighted the government has allocated about Rs 8,000 crore, which has been linked with performance and the government could further dilute 52% its stake if it requires more money.

The CNX Nifty is currently trading at 9053.90, up by 57.65 points or 0.64% after trading in a range of 9020.80 and 9119.20. There were 28 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 7.60%, ICICI Bank up by 3.00%, DLF up by 2.94%, Kotak Mahindra Bank up by 2.48% and ITC up by 2.43%. On the flip side, Cairn India down by 3.58%, Hindalco down by 2.77%, NMDC down by 2.21%, Wipro down by 1.71% and Sesa Sterlite down by 1.64% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 237.4 points or 0.96% to 24,465.38, Nikkei 225 decreased 111.56 points or 0.59% to 18,703.60, Jakarta Composite decreased 17.2 points or 0.31% to 5,457.42, KOSPI Index decreased 3.09 points or 0.15% to 1,998.29 and FTSE Bursa Malaysia KLCI decreased 0.35 points or 0.02% to 1,820.90.

On the other hand, Straits Times increased 1.77 points or 0.05% to 3,423.88, Taiwan Weighted increased 15.96 points or 0.17% to 9,621.73 and Shanghai Composite increased 16.48 points or 0.51% to 3,279.53.

The European markets were trading in green; UK’s FTSE 100 increased 14.1 points or 0.2% to 6,903.23, Germany’s DAX increased 26.79 points or 0.24% to 11,307.15 and France’s CAC increased 26.94 points or 0.55% to 4,896.19.