Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on across-the-board buying by funds and retail investors amid positive cues from other Asian markets. Some support also came with the HSBC report that the current account deficit is likely to remain at ‘manageable levels’ of around 1.5 per cent of GDP in the current fiscal despite a marginal rise in oil prices and sluggish manufacturing exports. At present, Sensex and Nifty were trading above the crucial 27,850 and 8,400 levels respectively, with gains of over half a percent.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by 0.47% and 0.59% respectively. Sentiment got a boost with an UN report, saying that Indian economic growth is projected to surpass that of China, with the GDP expected to zoom by 7.7% in 2016, while China is projected to grow by 7 per cent in 2015 and 6.8 per cent next year. Also, due to falling prices of some food items, retail inflation based on consumer price index (CPI) for rural labourers eased to 5.49% in March from 6.19% in the previous month. The rate of price-rise based on CPI for agricultural labourers too softened to 5.24% in March from 6.08% in February.

On global front, Asian stocks were mostly higher Wednesday as a rebound in U.S. home construction data and a surprise announcement by the European Central Bank to frontload bond buying sent the greenback higher, giving a boost to Asian exporters. The U.S. Commerce Department said housing starts last month increased 20.2 percent to a seasonally adjusted annual rate of 1.14 million homes. Back home, Indian rupee depreciated by 11 paise to 63.78 against the US dollar in early trade due to appreciation of the American currency overseas riding on strong economic data.

Back on street, barring Metal, all other BSE sectoral indices were trading significantly in the green. Among them, IT index was the star-performer and was up 1.59 per cent, followed by TECK 1.43 per cent, Infrastructure 1 percent and Banking 0.96 percent, while Metal index was down 0.43 percent. In scrip specific development, shares of Jamna Auto Industries have rallied after the company reported an over five-fold jump in consolidated net profit at Rs 15.31 crore for the fourth quarter ended March 31, 2015. On the flip side, shares of Pidilite Industries have declined after the company reported a lower-than-expected 10% year on year growth in consolidated net profit of Rs 81 crore for the fourth quarter ended March 31, 2015, due to lower other income.

The market breadth on BSE was positive, out of 2062 stocks traded, 1300 stocks advanced, while 665 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27888.62, up by 243.09 points or 0.88% after trading in a range of 27743.99 and 27903.01. There were 27 stocks advancing against 3 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.47%, while Small cap index up by 0.59%.

The gaining sectoral indices on the BSE were IT up by 1.59%, TECK up by 1.43%, Infrastructure up by 1.00%, Bankex up by 0.96% and Power up by 0.89%, while Metal down by 0.43% was the sole losing index on BSE.

The top gainers on the Sensex were Tata Power up by 3.16%, Infosys up by 1.48%, ICICI Bank up by 1.48%, TCS up by 1.38% and HDFC up by 1.22%. On the flip side, Tata Steel down by 1.89%, Hindalco down by 0.79% and Coal India down by 0.22% were the top losers.

Meanwhile, boosting the morale of the government further, the mid-year update of the UN World Economic Situation and Prospects (WESP) has said that India's economy is projected to grow by 7.6 per cent this year and 7.7 per cent in 2016, overtaking China which is projected to grow by 7 per cent in 2015 and 6.8 per cent next year.

The UN report has further stated that growth of world gross product is projected to improve slightly from 2.6 percent in 2014 to 2.8 percent in 2015 -- a downward revision by 0.3 percentage points from the forecast presented in the World Economic Situation and Prospects 2015 in January. In 2016, global growth is forecast to improve to 3.1 per cent but there are still considerable downside risks to the baseline forecast. While talking about South Asia's economic outlook it termed it as “largely favourable” since most economies are expected to experience a strengthening of growth in 2015-16 on the back of stronger domestic consumption and investment, and a pick-up in exports.

The UN report said that Across South Asia, the expansion is expected to be driven by buoyant household consumption and a gradual recovery in investment. Private sector demand will be underpinned by a more benign macroeconomic environment, including considerably lower inflation. It added that growth prospects for Iran and Pakistan have also improved moderately, although for both countries significant uncertainties remain.

The report also cautioned that there are still significant downside risks to the forecast related to the impact of the upcoming monetary policy normalization in the United States, ongoing uncertainties in the euro area, potential spillovers from geopolitical conflicts and persistent vulnerabilities in emerging economies.

The CNX Nifty is currently trading at 8435.60, up by 69.95 points or 0.84% after trading in a range of 8391.45 and 8440.35. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Tata Power up by 3.23%, Tech Mahindra up by 3.03%, HCL Tech up by 2.23%, ICICI Bank up by 1.54% and Ultratech Cement up by 1.53%. On the flip side, Tata Steel down by 1.95%, Hindalco down by 0.71%, Idea Cellular down by 0.59%, Cairn India down by 0.55% and Asian Paints down by 0.35% were the top losers.

Asian markets were trading mostly in the green; FTSE Bursa Malaysia KLCI increased 0.06%, KOSPI Index rose 0.82%, Jakarta Composite gained 0.53%, Shanghai Composite surged 1.33% and Nikkei 225 was up by 1.14%. On the flip side, Hang Seng decreased 0.2%, Taiwan Weighted slipped 0.26% and Straits Times was down by 0.39%.