Benchmarks continue to trade in red in late morning session

Indian bourses continued to trade in red in the late morning session as funds and retail investors indulged in booking profits at prevailing levels. Besides, traders turned cautious ahead of the Index of Industrial Production (IIP) data due later in the day. However, the broader markets were seen outperforming the benchmark indices as the BSE mid-cap index advanced 0.58 percent and the small-cap index gained 0.51 percent. Sentiment got some support with the India outlook upgrade by Moody’s.  Moody's revised India's sovereign rating outlook to 'positive' from 'stable' on Thursday, a step closer to an upgrade of the credit rating, as it expects actions by policymakers to lift the country's economic growth. It has also raised its forecasts for real GDP growth to 8 percent for current financial year and further to 8.3 percent in 2016-17. Some support also came in from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 193.81 crore on April 09, 2015.

On global front, Asian stocks rose in their early trade tracking overnight gains on Wall Street while loan payment of 450 million euros by Greece also aided market sentiment. Japanese shares advanced further with the benchmark Nikkei topping the 20,000 mark for the first time since April 2000, though Hong Kong market was witnessing some profit booking in early deals after going through two straight days of frenzied buying. Back home, Indian rupee depreciated by 18 paise to 62.42 against the dollar in early trade as the American currency firmed up overseas on upbeat US jobs report.

Back on street, stocks from Realty, Oil & Gas and Infrastructure counters were supporting the markets’ uptrend, while those from FMCG, Banking and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, Shares of IDFC surged after the company has got the shareholders approval for the demerger of its financial undertaking into IDFC Bank. Furthermore, Biocon rose after the company received approval for its Insulin Glargine by Cofepris, the Mexican health authority, through its partner PiSA Farmaceutica.

The market breadth on BSE was positive, out of 2228 stocks traded, 1323 stocks advanced, while 825 stocks declined on the BSE.

The BSE Sensex is currently trading at 28838.33, down by 46.88 points or 0.16% after trading in a range of 28820.90 and 28899.19. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.58%, while Small cap index up by 0.51%.

The top gaining sectoral indices on the BSE were Realty up by 1.00%, Oil & Gas up by 0.91%, Infrastructure up by 0.73%, PSU up by 0.65% and Consumer Durables up by 0.64% while, FMCG down by 0.21%, Bankex down by 0.13% and Capital Goods down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Sesa Sterlite up by 1.98%, SBI up by 1.16%, ONGC up by 1.14%, BHEL up by 1.07% and Infosys up by 0.99%. On the flip side, Hindalco down by 1.39%, HDFC down by 1.14%, Cipla down by 1.13%, ITC down by 0.98% and HDFC Bank down by 0.76% were the top losers.

Meanwhile, a day after global credit rating agency Moody’s upgraded its outlook for the Indian economy to 'positive' from 'stable', another rating agency Fitch has retained India's credit outlook at 'stable' saying although 'dynamism' is back in the economy translation of reforms into higher growth would depend upon actual implementation. However, the global rating agency said that India’s sovereign ratings are constrained by limited improvement in its fiscal position, which is a longstanding key weakness.

Following recent revisions to the GDP data, Fitch has also raised its forecasts for real GDP growth to 8.0% in the financial year ending 31 March 2016 (FY16) and 8.3% in FY17, compared with 7.4% GDP growth in FY15. Fitch's earlier forecasts for FY16 and FY17 were 6.5% and 6.8%, respectively, based on the old series of data. The significantly higher official real GDP growth numbers after the revision by the Central Statistical Office suggest the data include more economic activity than is actually taking place.

The rating agency also noted that the new monetary policy framework agreement based on inflation targeting seems to show the government and RBI's strong resolve to structurally lower inflation. Both the RBI's monetary policy and the government's policies that affect food prices, including the setting of minimum support prices for agricultural products, will strongly influence whether the target will be reached.

Fitch in its report said that the main factors that could lead to positive rating action include fiscal consolidation that would reduce the government debt faster than expected and an improved business environment resulting from implemented reforms and structurally lower inflation levels, which would support higher investment and real gross domestic product growth. However, a deviation from fiscal consolidation, the return of persistently high inflation and a widening current account deficit could result in a negative rating action.

The CNX Nifty is currently trading at 8765.00, down by 13.30 points or 0.15% after trading in a range of 8758.40 and 8781.40. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were IDFC up by 2.41%, Sesa Sterlite up by 2.05%, Idea Cellular up by 2.03%, BPCL up by 1.80% and BHEL up by 1.23%. On the flip side, Tech Mahindra down by 1.80%, Lupin down by 1.50%, Hindalco down by 1.36%, ITC down by 1.28% and Cipla down by 1.22% were the top losers.

Asian markets were trqading mostly in the green; Nikkei 225 rose 0.17%, Straits Times increased 0.50%, KOSPI Index gained 1.21%, Taiwan Weighted added 0.41%, Shanghai Composite surged 1.4% and Hang Seng was up by 0.38%. On the flip side, FTSE Bursa Malaysia KLCI decreased 0.19% and Jakarta Composite was down by 0.06%.