Indian equities trade on firm note; Nifty hovers above 7750 mark

Indian benchmarks were trading on a firm note in late morning trades on Wednesday, maintaining the one percent gain on continued across-the-board buying, tracking extended gains in other Asian markets and overnight rally in the US on better-than-expected euro zone Q2 GDP data and hope for further market stimulus on Chinese markets.  At present, Sensex and Nifty were trading above the crucial 25,500 and 7,750 levels respectively. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.53 percent and 1.60 percent, respectively. Sentiments got a boost after PM Narendra Modi met India Inc on Tuesday, where he asked them to take risk and invest more as his government promised a broad range of steps including stepping up of investment in infrastructure and improving ease of doing business to attract global investment. Some support also came with Organisation for Economic Cooperation and Development (OECD) statement that India is expected to see “firming growth” while the outlook for China continues to deteriorate. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 659.67 crore on September 08, 2015.

On global front, Asian shares gained on Wednesday, with Japan's benchmark Nikkei 225 index reaping monstrous gains, following the positive finish in offshore markets and as investors bet on China to step on the stimulus pedal soon. US stocks rose more than 2 percent on Tuesday, bouncing after steep losses last week and a China-fuelled rebound in global equities. Back home, Indian rupee advanced by 24 paise to 66.31 against the Dollar in early trade on Wednesday on sustained selling of the US currency by banks and exporters.

Back on street, all BSE sectoral indices were trading in the green. Among them, realty index gained the most by 3.13 per cent, followed by Metal 2.33 per cent, Consumer Durables 2.12 per cent and IT 1.77 per cent. In scrip specific development, shares of Hinduja Ventures have surged as the company’s subsidiary, Grant Investrade (GIL) bagged the operating licence for the HITS (Headend-in-the-Sky) digital television services from the ministry of information and broadcasting. Furthermore, Tara Jewels gained after the company secured an order worth Rs 53.4 crore from Walmart USA for supply of diamond-studded jewellery.

The market breadth on BSE was positive, out of 2164 stocks traded, 1646 stocks advanced, while 447 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25573.73, up by 255.86 points or 1.01% after trading in a range of 25573.73 and 25753.93. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.53%, while Small cap index up by 1.60%.

There were no losers on the BSE Sectoral front, however, prominent gainers on the BSE Sectoral front were Realty up by 3.13%, Metal up by 2.33%, Consumer Durables up by 2.12%, IT up by 1.77% and Auto up by 1.65%.

The top gainers on the Sensex were Vedanta up by 8.13%, Hindalco up by 4.67%, Tata Steel up by 3.32%, Infosys up by 2.93% and Maruti Suzuki up by 2.18%. On the flip side, Hindustan Unilever down by 1.00% and GAIL India down by 0.92% were the top losers.

Meanwhile, Moody's Investors Service has said that India's current account deficit (CAD) is likely to remain low on account of decline in oil prices, which has dropped by nearly 60% over the past one year to around $45-46 per barrel, easing pressure on India's huge oil import bill. Though, it also said that a slow recovery in industrial output and investment will drag economic growth to 7% in the current financial year. India's current account deficit (CAD), difference between the inflow and outflow of foreign exchange, has narrowed significantly from 4.8% in 2012 to 1.4% in 2014. It said that 'We expect this trend to continue, supported by lower oil import costs.'

Moody's has reduced its projection for India’s growth to 7% in 2015 and 7.5% in 2016 from 7.5% and 7.6%, based on high frequency indicators suggesting that the recovery in industrial output and investment is slow, and bank credit growth still subdued. In the first quarter of current financial year India's economy grew at 7% and government expects the economy to grow at 8-8.5% in the fiscal ending March 2016.

Moody’s further stated that the risk of a weaker monsoon and potential for higher food price inflation narrowed the scope for more significant monetary easing in the first half of the year. However, it said that “our expectation is that despite its slower than anticipated pace, the direction of recovery is positive, which is reflected in our 2016 forecast”. Besides, it has lowered growth forecasts for many Asia Pacific (APAC) sovereigns, citing that subdued global growth, exacerbated by weaker demand from China. 

The CNX Nifty is currently trading at 7775.65, up by 87.40 points or 1.14% after trading in a range of 7775.55 and 7821.90. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 8.29%, Hindalco up by 4.75%, Cairn India up by 3.81% , Zee Entertainment up by 3.43% and Tata Steel up by 3.39%. On the flip side, GAIL India down by 1.15%, Hindustan Unilever down by 0.99%, Power Grid down by 0.52% and Tech Mahindra down by 0.13% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI was up by 0.76%, Straits Times up by 0.42%, Jakarta Composite up by 0.46%, KOSPI Index up by 2.34%, Shanghai Composite up by 1.69%, Taiwan Weighted up by 3.62%, Hang Seng up by 2.97% and Nikkei 225 up by 5.51%.