Benchmarks continue to trade firm led by metal and power stocks

Indian equity benchmarks continue to trade firm in early noon session, on the back of positive global cues. Sentiment got boost from India's current account deficit (CAD) data, which dropped to 1.6 percent of GDP in the July-September quarter from 2.2 percent reported for the same period a year ago. Further, covering-up of short positions by speculators, too was supporting the sentiment.  Appreciation in Indian rupee also aided the sentiment. Extending its gains for the seventh day in a row, the rupee strengthened by 10 paise to 66.21 against the US dollar in early noon trade at the Inter-bank Foreign Exchange on continued selling of the American currency by exporters and banks. Meanwhile, oil and gas stocks have moved higher, as the global crude oil stabilised after they hit 11-year lows early this week.
 
On the global front, Asian markets were trading mostly in green, supported by Wall Street rally as a positive reading on US growth and consumer spending renewed confidence in the world's top economy. Back home, both the sensex and Nifty were trading above their crucial 25,800 and 7,850 levels, respectively. In scrip specific development, share of Welspun Enterprises was trading over 9% higher after the company entered into a definitive agreement with India Infrastructure Fund-II, an alternate fund sponsored by IDFC to sold 37 per cent equity stake in Dewas Bhopal Corridor (DBCL), a 50 per cent joint venture of the company at an enterprise value of Rs 662 crore (including a contingent deferred consideration of Rs 34 crore million and debt of Rs 317 crore).

The BSE Sensex is currently trading at 25847.87, up by 257.22 points or 1.01% after trading in a range of 25689.70 and 25865.06. There were 27 stocks advancing against 2 stocks declining, while one stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.40%, while Small cap index gained 0.73%.

The top gaining sectoral indices on the BSE were Metal up by 1.68%, Power up by 1.37%, Oil & Gas up by 1.19%, Realty up by 1.14% and Capital Goods up by 1.07%, while Consumer Durables down by 0.05% was the lone losing index on BSE.

The top gainers on the Sensex were GAIL India up by 4.30%, BHEL up by 3.85%, Tata Steel up by 3.01%, Sun Pharma Inds. up by 2.92% and Bharti Airtel up by 1.79%. On the flip side, Asian Paints down by 0.52% and Mahindra & Mahindra down by 0.04% were the top losers.

Meanwhile, giving some respite to the government, the current account deficit (CAD) narrowed to 1.6 percent of GDP at $ 8.2 billion in the second quarter ended September, compared to $10.9 billion  or 2.2 percent of GDP reported in the same period last year, mainly due to lower trade deficit. However, the CAD was higher than the first quarter’s $6.2 billion or 1.2 percent of GDP, due to a drop in export of goods. Earnings from export of goods dropped to $67 billion in Q2FY16 from $68 billion in Q1FY16.

During the first 6 months of the current fiscal, the CAD narrowed to 1.4 percent of GDP at $71.6 billion from 1.8 percent $74.7 billion in the same period a year ago on contraction in the trade deficit and a marginal improvement in net invisibles. However, RBI in the second quarterly balance of payments data release has said that after a sharp pick up in the first quarter, net foreign direct investment (FDI) moderated in second quarter of 2015-16.

RBI further said that although net services receipts moderated marginally on a y-o-y basis largely due to fall in export receipts in transport, insurance and pension services, there has been some improvement over the preceding quarter. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $16.5 billion, a marginal decline from their level in the preceding as well as the corresponding quarter.

The overall balance of payments (BoP) position for the second quarter - which includes trade as well as capital flows - turned marginally negative as there was a drawdown of $900 million from the foreign exchange reserves following sales by foreign institutional investors. The BoP for the first six months continued to remain positive with total accretion of $10.6 billion to forex reserves, which was lower than $18 billion in the first half of FY15.

The CNX Nifty is currently trading at 7862.30, up by 76.20 points or 0.98% after trading in a range of 7826.10 and 7865.90. There were 49 stocks advancing against 1 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 4.36%, BHEL up by 4.01%, Hindalco up by 3.52%, Sun Pharma up by 3.05% and Tata Steel up by 3.05%. On the flip side, Asian Paints down by 0.52% were the top losers.

Asian markets were trading mostly in green; KOSPI Index increased 5.65 points or 0.28% to 1,998.21, FTSE Bursa Malaysia KLCI increased 11.16 points or 0.68% to 1,654.42, Taiwan Weighted increased 22.96 points or 0.28% to 8,315.70 and Hang Seng increased 197.1 points or 0.9% to 22,027.12, while Nikkei 225 decreased 29.32 points or 0.16% to 18,886.70, Jakarta Composite decreased 9.43 points or 0.21% to 4,508.14 and Shanghai Composite decreased 4.13 points or 0.11% to 3,647.63.