Benchmarks continue to hold their head above water

After positive opening, Indian equity benchmarks continued to hold their head above water on emergence of buying by investors after remaining sellers in the past few sessions. Sentiments got a boost with international credit rating agency Fitch’s latest report on Global Economic Outlook saying that India is the only BRIC nation, where growth will accelerate, to 8 per cent in FY16 and 8.3 per cent in FY17, based on revised data series. Besides, a firming trend on other Asian markets following week-end rallies in the US and European markets buoyed sentiments. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 354.59 crore on March 20, 2015. Meanwhile, market is likely to be volatile as investors and foreign funds were adopting a cautious approach ahead of monthly expiry of derivatives contracts on March 26, 2015.

On global front, Asian stock markets rose following Wall Street's gains amid expectations international central banks will hold off raising interest prices. Further, Benchmark U.S. crude shed 65 cents to $45.92 per barrel in electronic trading on the New York Mercantile Exchange. Back home, Indian rupee strengthened by 12 paise at 62.34 against the US dollar in early trade on increased selling of the American currency by exporters.

Back on street, stocks from Power, Auto and infrastructure counters were supporting the markets’ uptrend, while those from Consumer Durables, Metal and Realty counters were adding to the underlying cautious undertone. In scrip specific development, shares of Compuage Infocom have surged after the company announced that its board will consider issue of free shares to existing shareholders. On the other hand, shares of Jindal Steel and Power (JSPL) have declined on reports that the government has cancelled the two bids of the company for three blocks.

The market breadth on BSE was positive, out of 2294 stocks traded, 831 stocks advanced, while 1372 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28307.60, up by 46.52 points or 0.16% after trading in a range of 28248.55 and 28385.14. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.28%, while Small cap index down by 0.47%.

The gaining sectoral indices on the BSE were Power up by 0.45%, Auto up by 0.35%, Infrastructure up by 0.26% and Capital Goods up by 0.14% while, Consumer Durables down by 0.70%, Metal down by 0.70%, Realty down by 0.57%, IT down by 0.31% and FMCG down by 0.30% were the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.39%, Hindalco up by 1.36%, NTPC up by 1.34%, Hindustan Unilever up by 1.17% and Mahindra & Mahindra up by 1.08%. On the flip side, BHEL down by 1.77%, Coal India down by 0.98%, ITC down by 0.66%, Maruti Suzuki down by 0.63% and SBI down by 0.50% were the top losers.

Meanwhile, International credit rating agency Fitch in its latest report on ‘Global Economic Outlook’ has said that India is the only BRIC nation, where growth will accelerate, to 8 per cent in FY16 and 8.3 per cent in FY17, based on revised data series. Fitch had earlier forecasted growth rates of 6.5 per cent for 2015-16 and 6.8 per cent for 2016-17, based on the old series.

The Central Statistical Office (CSO) has recently changed the base year for calculation of GDP to 2011-12 from 2004-05 earlier, which resulted in an increase in the official real GDP growth number for FY14 to 6.9 per cent (at market prices) from 4.7 per cent (at factor costs).

The rating agency has praised the government's effort to produce GDP data in line with international standards and said that while plenty of policy initiatives will likely have a positive effect on real GDP growth, including structural reforms and some fiscal and monetary policy loosening, the impact of such measures takes time to show up in higher growth. It also said that these new GDP growth levels and the pick-up from mid-2013 are difficult to reconcile with indicators and anecdotal evidence that show low investment levels, weak corporate balance sheets and a rise in banks' non-performing assets.

For the global growth Fitch expects GDP to grow by 2.7 per cent in FY16 and 3 per cent in FY17, up from an estimate of 2.5 per cent in FY15. It has further said that the growth will accelerate in 2015-16 in all of the three largest advanced economies for the first time since 2010, while emerging markets will continue to slow, due primarily to recession in Russia and Brazil and the structural adjustment in China.

The CNX Nifty is currently trading at 8576.00, up by 5.10 points or 0.06% after trading in a range of 8559.70 and 8608.35. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 1.53%, Power Grid up by 1.52%, Hindalco up by 1.51%, NTPC up by 1.48% and Sun Pharma up by 1.47%. On the flip side, Jindal Steel & Power down by 7.32%, Tech Mahindra down by 3.94%, NMDC down by 3.62%, BHEL down by 1.75% and DLF down by 1.31% were the top losers.

Asian markets were trading in the green; KOSPI Index rose 0.03%, FTSE Bursa Malaysia KLCI increased 0.09%, Jakarta Composite added 0.08%, Straits Times advanced 0.19%, Taiwan Weighted jumped 0.08%, Shanghai Composite soared 1.82%, Hang Seng surged 0.61% and Nikkei 225 was up by 1.01%.