Benchmarks continue to trade firm in late morning session

Indian equity benchmarks continue to trade on an optimistic note in later morning trades as risk appetite of investors globally improved across the risky asset classes on the likelihood of fresh economic stimulus infusion by the European Central Bank. Sentiments got a boost with a Moody's Investors Service’s report stating that India will clock the highest growth rate of 7-7.5 per cent among G20 economies in 2015 and 2016. It has said that India is less exposed to global risks because of its more resilient economic growth and the impact of positive policy reforms momentum.  Some support also came with report that the government is likely to meet its fiscal deficit target this year despite risks of shortfall in tax collection and disinvestment proceeds, as it may go for a small reduction in public spending. Further, the rupee snapped its two-day falling streak and strengthened by 34 paise to 64.78 against the dollar in early trade on fresh selling of the US currency by exporters and banks amid sustained foreign funds inflows.

On the global front, Asian markets trading mostly in green after the European Central Bank signalled its readiness to inject more stimulus, helping the dollar scale a fresh two-month peak against the euro. Besides, the S&P 500 closed at its highest in two months on Thursday as stronger-than-expected earnings from several top companies, including McDonald’s, relieved investors’ concerns about the profit outlook.

Back on street, stocks from Oil & Gas, PSU and Banking counters were supporting the markets’ uptrend, while those from TECK, Capital Goods and IT counters were adding to the underlying cautious undertone. In scrip specific development, shares of KPIT Technologies have rallied after the company reported a robust 69% quarter-on-quarter (QoQ) growth in consolidated net profit at Rs 75 crore for the quarter ended September 2015 (Q2FY16), on back of strong operational performance. Furthermore, Cadila Healthcare has surged after the company reported a strong 40% year on year (YoY) growth in consolidated net profit at Rs 391 crore for the quarter ended September 30, 2015.

The market breadth on BSE was positive, out of 2238 stocks traded, 1400 stocks advanced, while 722 stocks declined on the BSE. 

The BSE Sensex is currently trading at 27498.44, up by 210.78 points or 0.77% after trading in a range of 27456.23 and 27555.06. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.46%, while Small cap index up by 0.47%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.46%, PSU up by 1.21%, Bankex up by 1.21%, Realty up by 1.15%, FMCG up by 1.09%, while TECK down by 0.41%, Capital Goods down by 0.12% and IT down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.85%, ONGC up by 2.82%, GAIL India up by 2.19%, ICICI Bank up by 1.93% and ITC up by 1.84%. On the flip side, Bharti Airtel down by 2.22%, Wipro down by 1.67%, Maruti Suzuki down by 1.57%, Larsen & Toubro down by 0.51% and Infosys down by 0.36% were the top losers.

Meanwhile, Moody's Investor Service’s latest report is likely to give some cheers to the government and other policy makers, as the international ratings agency has said that India is less exposed to global risks because of resilient economic growth and impact of positive policy reform momentum.

In its report ‘Baa-rated Sovereigns: Diverging Resilience to Developing Global Risks’, which focuses on five Baa-rated sovereigns-Turkey, Brazil, South Africa, India and Indonesia, it considers India less exposed to external shocks than the other sovereigns discussed. It further stated that the positive outlook on its Baa3 rating reflects our view that the relatively resilient growth and the policy reform momentum will slowly stabilize inflation, improve the regulatory environment, increase infrastructure investment and lower government debt ratios.

Making a special mention of India’s significant monetary tightening in 2013, coupled with some fiscal consolidation, which is “an example of effective macroeconomic management that restored macroeconomic stability, albeit at the expense of near-term growth” Moody’s said although India, South Africa and Brazil have weaker fiscal positions than Turkey and Indonesia, these governments are less reliant on foreign currency and non-resident funding (government external debt).

The rating agency also said that emerging market sovereigns have diverging shock-absorption capabilities to withstand the risks that will continue to impact global credit quality in 2015-16. Moody’s believes the main external risk facing emerging markets is the potential for a prolonged risk aversion, prompted by hopes of normalization of US monetary policy and possibility of a sharper-than-expected China slowdown.

The CNX Nifty is currently trading at 8306.75, up by 55.05 points or 0.67% after trading in a range of 8300.55 and 8328.10. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Cairn India up by 3.89%, ONGC up by 2.96%, NTPC up by 2.92%, GAIL India up by 2.34% and ITC up by 1.82%. On the flip side, Idea Cellular down by 5.07%, Bharti Airtel down by 2.10%, Wipro down by 1.73%, Maruti Suzuki down by 1.56% and Larsen & Toubro down by 0.59% were the top losers.

Asian markets were trading mosrly in green, FTSE Bursa Malaysia KLCI up by 0.42%, KOSPI Index up by 0.81%, Jakarta Composite up by 1.31%, Taiwan Weighted up by 0.78%, Hang Seng up by 1.21% and Nikkei 225 up by 2.27%. On the other hand, Shanghai Composite was down by 0.19%,