Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on revival of buying by funds and retail investors after three sessions of drubbing. Sentiments got a boost with International Monetary Fund’s latest report raising its forecasts of India’s economic growth to 7.2% in the current fiscal year, compared to 5.6% as predicted earlier. Besides, firm global cues coupled with the appreciation in rupee value against the dollar added to the optimistic sentiments.  Some support also came in from reports that Global rating agency Moody’s has retained India’s stable outlook on the sovereign rating at Baa3, citing the country's large and diversified economy and healthy private savings rate. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 445 crore on March 11, 2015. Meanwhile, some traders remained on the sidelines and refrained from any buying activity ahead of industrial production for January and consumer price index for February scheduled to be announced today besides keeping a tab on development regarding coal and mines related Bills and insurance amendment bills sent by the government to the Rajya Sabha.

On global front, a surprise interest rate cut by South Korea's central bank helped lift an index of Asian stocks away from the previous session's seven-week lows. However, Investors are watching for clues from a U.S. Federal Reserve meeting next week about the possible timing of an interest rate hike. Back home, Indian rupee strengthened by 11 paise to 62.67 against the dollar in early trade on fresh selling of the US currency by exporters and banks.

Back on street, all the sectoral indices were trading in the positive territory with BSE Power index leading the rally up 2.18% followed by infrastructure, Metal, Capital Goods and FMCG indices trading higher over a percentage point. In scrip specific development, Shares of Mold-Tek Technologies have soared after reporting a more than 100% growth in its consolidated net profit for the third quarter ended December 31, 2014. Furthermore, Den Networks rose after the company’s board has approved a proposal to increase foreign investment limit to 74% from the existing limit of 49% of the issued and fully paid-up share capital of the company.

The market breadth on BSE was positive, out of 2339 stocks traded, 1479 stocks advanced, while 773 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28885.18, up by 226.01 points or 0.79% after trading in a range of 28772.71 and 28912.96. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.01%, while Small cap index up by 1.02%.

The top gaining sectoral indices on the BSE were Power up by 2.18%, infrastructure up by 1.67%, Metal up by 1.44%, Capital Goods up by 1.28% and FMCG up by 1.27%, while there were no losers on the sectoral space.

The top gainers on the Sensex were NTPC up by 5.71%, Tata Steel up by 2.50%, ITC up by 2.11%, Sesa Sterlite up by 2.07% and Tata Motors up by 1.86%. On the flip side, Mahindra & Mahindra down by 1.24%, Hindustan Unilever down by 0.93%, Wipro down by 0.75%, Dr. Reddys Lab down by 0.60% and Bajaj Auto down by 0.51% were the top losers.

Meanwhile, in a big boost to the government’s reform measures, the International Monetary Fund (IMF) in its annual assessment report for the country has raised its growth forecast for the current fiscal to 7.2 percent. Though, the global body called for steps to revitalise the investment cycle and accelerate structural reforms in the country, to continue on this trend. It said that by creating space for higher infrastructure spending, fiscal reforms can have a major impact on economic growth

The report further stated that the government has made strong efforts to put its public finances on a solid footing, with the fiscal deficit falling to 4.1 percent of the GDP in 2014-15, helped by lower oil prices. It also said that the Indian government’s efforts to improve the business climate has gained momentum, including with a “Make in India” campaign to attract investment

In its annual economic health check of the Indian economy, IMF said that while the country is well placed to cope with external shocks, there are possible risks on the horizon, both external and domestic and “Spillovers from weak global growth and global financial market volatility could be disruptive, including from any unexpected developments as the United States begins to raise its interest rates.” The IMF Board said that the main external risk facing India is a surge in global financial market volatility.

The report has also highlighted that the country needs to implement reforms in the key areas of energy, mining, power, infrastructure investment, land acquisition, environmental clearances, agriculture sector, labor markets and improving education. The report commended the RBI for its steps to tighten monetary policy by raising interest rates during 2013-14, and lauded the government’s efforts to contain food inflation, saying that Indian government’s “comprehensive policy initiatives”, have helped reduce India’s external vulnerabilities and improve the economic outlook.

The CNX Nifty is currently trading at 8768.80, up by 68.85 points or 0.79% after trading in a range of 8732.90 and 8773.60. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were NTPC up by 5.95%, Jindal Steel & Power up by 2.83%,  Ambuja Cement up by 2.69%, Tata Steel up by 2.61% and ITC up by 2.26%. On the flip side, Mahindra & Mahindra down by 1.74%, Tech Mahindra down by 1.36%, Wipro down by 0.87%, Hindustan Unilever down by 0.74% and Dr. Reddys Lab down by 0.62% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index rose 0.14%, FTSE Bursa Malaysia KLCI gained 0.54%, Jakarta Composite advanced 0.15%, Shanghai Composite surged 1.82%, Taiwan Weighted increased 0.75%, Hang Seng increased 0.56% and Nikkei 225 was up by 1.35%. On the flip side, Straits Times was down by 0.17%.