Markets extend rally; Nifty inches towards 7,850 mark

Buoyed by firm global cues, Indian equity benchmarks have extended their rally and are trading jubilantly with a gain of around two percent in noon deals, with frontline gauges inching towards their crucial 25,800 (Sensex) and 7,850 (Nifty) levels. European counters have made a firm start with CAC, DAX and FTSE trading with a gain of around two percent in early deals. All the Asian markets were trading in green at this point of time, supported by the positive finish in offshore markets and as investors bet on China to step on the stimulus pedal soon.

Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Sentiments remained up-beat with Chief Economic Advisor Arvind Subramanian’s statement that Indian economy will grow at the highest rate and also remain an attractive investment destination. Traders are also getting some support 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.

Meanwhile, none of the sectoral indices were trading in the red. While realty and metal witnessed the maximum gain in trade, auto, banking, consumer durables, software, technology, power and oil and gas too were trading significantly. The market breadth on the BSE was positive; there were 1829 shares on the gaining side against 546 shares on the losing side while 86 shares remain unchanged.

The BSE Sensex is currently trading at 25780.19, up by 462.32 points or 1.83% after trading in a range of 25553.61 and 25785.73. There were 29 stocks advancing against 1 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 2.29%, while Small cap index up by 2.04%.

The top gaining sectoral indices on the BSE were Realty up by 3.67%, Metal up by 2.99%, Auto up by 2.77%, Bankex up by 2.51%, Consumer Durables up by 2.22%, while there were no losers on the index.

The top gainers on the Sensex were Vedanta up by 6.90%, Hindalco up by 5.29%, Tata Steel up by 4.92%, Axis Bank up by 4.25% and NTPC up by 3.54%. On the flip side, Hindustan Unilever down by 0.24% was the lone loser.

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 7834.15, up by 145.90 points or 1.90% after trading in a range of 7764.55 and 7836.60. There were 46 stocks advancing against 4 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 7.01%, Hindalco up by 5.57%, Tata Steel up by 5.07%, Cairn India up by 4.29% and Axis Bank up by 4.18%. On the flip side, GAIL India down by 0.30%, Tech Mahindra down by 0.20%, Hindustan Unilever down by 0.12% and Power Grid down by 0.08% were the few losers.

All the Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 11.99 points or 0.76% to 1,599.11, Jakarta Composite rose 16.77 points or 0.39% to 4,335.36, Straits Times jumped 17.97 points or 0.62% to 2,903.29, Shanghai Composite surged 43.68 points or 1.38% to 3,214.13, KOSPI Index soared 55.52 points or 2.96% to 1,934.20, Nikkei 225 zoomed 1343.43 points or 7.71% to 18,770.51, Taiwan Weighted strengthened by 285.42 points or 3.57% to 8,286.92 and Hang Seng was up by 655.36 points or 3.08% to 21,914.40.

European Markets were trading in green; Germany’s DAX surged 2.09%, France’s CAC gained 2.18% and UK’s FTSE was up by 1.65%.