Benchmarks continue to hold their head above water

After recovering from day’s low, benchmark equity indices were holding their head above water and trading up with modest gains of around 0.05-0.06%, on account of selective buying by funds as well as investors. Sentiments got some support with the report that foreign portfolio investors (FPIs) bought shares worth a net Rs 152.20 crore on December 30, 2015. Besides, short-covering by speculators in view of December monthly expiry in the futures and options space also supported the upside. However, investors remained cautious with the head of the International Monetary Fund (IMF) Christine Lagarde’s statement that global economic growth will be 'disappointing' next year. She said the prospect of rising interest rates in the US and an economic slowdown in China were contributing to uncertainty and a higher risk of economic vulnerability worldwide. Furthermore, Finance minister Arun Jaitley has said that subdued global economy and moderate private sector investment will continue to pose challenge in the next year. Finance Ministry in its mid-year economic analysis earlier this month lowered the GDP growth forecast to 7-7.5 per cent from 8.1-8.5 per cent projected in the Economic Survey released in February this year.

On the global front, Asian stock markets were mixed in thin trading on Thursday as a renewed slide in oil prices sapped sentiment, a baleful trend that shows every sign of lingering into 2016. Benchmark U.S. crude for February delivery shed 3.4 per cent on Wednesday, extending its losses for the year to 40 per cent. Meanwhile, markets in Japan, South Korea, and Indonesia are closed for the New Year's Eve holiday and the markets in Hong Kong, Malaysia, and Singapore will close early for New Year's Eve. Losses in energy stocks weighed on Wall Street on Wednesday, where the Dow ended down 0.66%.  Back home, stocks from Realty, Consumer Durables and Oil & Gas counters were supporting the markets’ uptrend, while those from FMCG, IT and TECK counters were adding to the underlying cautious undertone. In scrip specific development, shares of Parenteral Drugs (India) have gained after the company received an approval for disinvestment of equity shares held by the company in its non-operational subsidiary companies. On the other hand, shares of Cadila Healthcare have tanked after the company received a warning letter from the US Food and Drug Administration (USFDA) relating to its Moraiya formulation facility and Ahmedabad API facility.

The market breadth on BSE was positive, out of 2289 stocks traded, 1246 stocks advanced, while 854 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25974.77, up by 14.74 points or 0.06% after trading in a range of 25941.91 and 26002.24. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.04%, while Small cap index up by 0.27%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.69%, Realty up by 0.45%, TECK up by 0.41%, IT up by 0.37% and Metal up by 0.29%, while Oil & Gas down by 0.22%, Auto down by 0.15%, Capital Goods down by 0.13% and PSU down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 0.88%, GAIL India up by 0.68%, HDFC Bank up by 0.62%, Infosys up by 0.59% and Coal India up by 0.59%. On the flip side, ONGC down by 1.73%, Lupin down by 0.78%, Larsen & Toubro down by 0.63%, ITC down by 0.55% and Tata Motors down by 0.51% were the top losers.

Meanwhile, in order to strengthen the energy security by supporting the expansion of nuclear power in India with the fuel supply arrangements, Union Cabinet has given its approval to the Civil Nuclear Cooperation Agreement with Australia. The Indo-Australian civil nuclear cooperation agreement was brought into force on November 13 along with the administrative arrangement for implementing the accord.

It is a step toward India achieving international acceptability for its nuclear programme despite not ratifying the nuclear non-proliferation treaty. India, which has nuclear energy contributing just 3 per cent of its electricity generation, will be the first country to buy Australian uranium without being a signatory to the nuclear non-proliferation treaty. In the year 2012, India and Australia began talks on the Civil Nuclear Cooperation Agreement after Australia lifted a long-standing ban on selling uranium to energy-starved India. Australia has about 40 per cent of the world’s uranium reserves and exports nearly 7,000 tonnes of yellow cake annually.

Last year, India signed similar agreements with the US and France. The implementation of the civil nuclear cooperation agreement with the US was put back on course when Prime Minister hosted President Obama in New Delhi In January. Civil nuclear cooperation with Russia and France has also been taken forward during the year. On December 22, 2015, during Prime Minister’s visit to Russia, a Joint Programme of Action for Localization of Manufacturing in India for Russian-designed Nuclear Power Plants was signed.

India has less than two dozen small reactors at six sites with a capacity of 4,780 MW, or 2 per cent of its total power capacity. It plans to increase its nuclear capacity to 63,000 MW by 2032 by adding nearly 30 reactors at an estimated cost of $85 billion. At present, India has nuclear energy agreements with 11 countries and imports uranium from France, Russia and Kazakhstan.

The CNX Nifty is currently trading at 7900.20, up by 3.95 points or 0.05% after trading in a range of 7891.15 and 7909.50. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 2.01%, HCL Tech up by 1.06%, GAIL India up by 0.73%, Coal India up by 0.67% and HDFC Bank up by 0.61%. On the flip side, PNB down by 1.40%, ONGC down by 1.21%, Bank of Baroda down by 1.06%, Lupin down by 0.97% and Vedanta down by 0.76% were the top losers.

Asian markets were trading mix, Shanghai Composite was down by 0.61%, Taiwan Weighted down by 0.02% and FTSE Bursa Malaysia KLCI was down by 0.11%. On the flip side, Hang Seng was up by 0.15% and Straits Times was up by 0.09%.