Benchmarks continue to hold their head above water

After getting positive start, benchmarks continued to hold their head above water in absence of any significant positive trigger at home front, with investors keenly eyeing the industrial production for January and consumer price index for February scheduled to be announced on Thursday. Some support came in with report that India’s current account deficit (CAD) narrowed considerably to $8.2 billion or 1.6% of gross domestic product (GDP) for the quarter ended December 2014 down from $10.1 billion or 2% of GDP on end-September 2014. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 748 crore on March 10, 2015. Furthermore, some investors remained cautious and unwilling to take fresh positions ahead of the proceedings in the Parliament particularly with respect to the passage of key bills such as Land Acquisition Bill in Rajya Sabha.

On global front, Asian stock markets were trading marginally lower following sharp declines on Wall Street sparked by growing investor anxiety about a looming U.S. interest rate hike. The possibility of higher US yields siphoning away funds from riskier assets gave the S&P 500, at a record high two weeks ago, its worst decline in two months overnight and emerging market stocks declined to their lowest since early January. Back home, Indian rupee fell by six paise to a fresh two-month low of 62.82 against the US dollar in early trade due to rise in the Greenback's value against other global currencies.

Back on street, stocks from information technology (IT), FMCG and Consumer Durables counters were supporting the markets’ uptrend, while those from Metal, PSU and Realty counters were adding to the underlying cautious undertone. In scrip specific development, shares of Asian Paints gains on plan to set up manufacturing facility for paints, intermediates at Andhra Pradesh. On the flip side, shares of ABG Shipyard have dipped after the denied the stake sale report and said that no such negotiations were taking place.

The market breadth on BSE was positive, out of 2317 stocks traded, 1147 stocks advanced, while 1056 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28741.88, up by 32.01 points or 0.11% after trading in a range of 28670.58 and 28815.95. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.16%, while Small cap index up by 0.12%.

The gaining sectoral indices on the BSE were IT up by 1.13%, TECK up by 0.91%, FMCG up by 0.49%, Consumer Durables up by 0.33% and Oil & Gas up by 0.20%, while Metal down by 1.07%, PSU down by 0.43%, Realty down by 0.41%, Bankex down by 0.31% and Capital Goods down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.28%, Infosys up by 1.42%, Hindustan Unilever up by 1.30%, Reliance Industries up by 1.11% and Mahindra & Mahindra up by 1.01%. On the flip side, Hindalco down by 3.69%, Sun Pharma down by 1.35%, Cipla down by 1.23%, ONGC down by 1.05% and Dr. Reddys Lab down by 0.85% were the top losers.

Meanwhile, in an encouraging development, India's current account deficit reached $8.2 billion, or 1.6% of gross domestic product, in the October-December quarter, lower than the previous quarter but double from a year earlier. The current account deficit had reached $4.2 billion or 0.9% of GDP a year earlier, while it reached $10.1 billion or 2.0% of GDP in the previous quarter. The reduction in Q3FY15 CAD was primarily on account of net exports of services which picked up in q-o-q terms on the back of an improvement in net earnings through travel and software services, and lower net outflows under primary income (profit, dividend and interest).

However, balance of payment (BoP) stood in surplus for fifth consecutive quarter at $13.2 billion during October- December quarter. It was also almost double the $6.9 billion surplus in the previous quarter. This considerable improvement on a y-o-y basis on the back of a higher growth in merchandise exports and a marginal rise in merchandise imports, with a sizable increase in net financial flows financing the CAD and enabling a large build-up of reserves.

The merchandise trade deficit at $39.2 billion widened on a q-o-q basis on account of a larger decline in merchandise exports (7.3 per cent) than in merchandise imports (4.5 per cent); in terms of y-o-y changes too, the trade deficit in Q3 2014-15 widened due to a decline in exports (1.0 per cent), while imports increased (4.5 per cent).

On a BoP basis, a net accretion of $ 13.2 billion to India’s foreign exchange reserves in Q3 of 2014-15 was reported, almost double the accretion in the preceding quarter, but was lower than the same quarter of the previous year, bolstered by special non-resident and banks’ overseas borrowings.

CAD during the first nine months of the fiscal, shrank to $26.2 billion or 1.7 percent of GDP against $ 31.1 billion or 2.3 percent of GDP during the same period last fiscal. The trade deficit narrowed to $ 112.5 billion in the April-December period from $ 116.9 billion in the same period year-ago. For the first three quarters, the total accretion to the forex kitty was of $31.3 billion against a $ 8.4 billion in the same three quarters of previous fiscal.

The CNX Nifty is currently trading at 8721.15, up by 9.10 points or 0.10% after trading in a range of 8700.80 and 8747.05. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were HCL Tech up by 2.64%, Wipro up by 2.46%, Infosys up by 1.51%, Hindustan Unilever up by 1.22% and Asian Paints up by 1.16%. On the flip side, Hindalco down by 3.80%, Cairn India down by 2.08%, Lupin down by 1.80%, Bank of Baroda down by 1.78% and Sun Pharma down by 1.39% were the top losers.

Asian markets were trading mostly in the red; Hang Seng slipped 0.21%, Jakarta Composite declined 0.86%, Straits Times decreased 0.43%, FTSE Bursa Malaysia KLCI shed 0.45% and KOSPI Index was down by 0.20%. On the other hand, Shanghai Composite rose 0.3%, Taiwan Weighted increased 0.17% and Nikkei 225 was up by 0.81%.