Benchmarks continue to trade in green in late morning session

Indian bourses continued to trade in green in late morning session on value-buying in select blue chips after yesterday's steep losses. Besides, a moderate recovery in Chinese shares and other Asian markets supported the rebound on the domestic market. However, investors remained cautious regarding the upcoming macro-data for monthly industrial output, retail inflation and the third-quarter earnings season which starts from January 14, 2015. Furthermore, ending a 25-month expansion run, manufacturing activity in India fell into the contraction zone in December, indicating that a festival-related surge may not be sustainable.  The Nikkei India Manufacturing Purchasing Managers' Index (PMI) dipped to 49.1 in December from 50.3 in November. Meanwhile, selling pressure witnessed in Telecom stocks after the order from the Telecom Regulatory Authority of India (Trai) that has written to operators to ensure compliance with call drop regulations, effective January 1. On the other hand, Metal stocks were trading higher after the report that the government has imposed 5% import duty on iron ore pellets

On the global front, most of the Asian markets reversed early losses and swung back higher, tracking the recovery in the Chinese indices after the huge sell-off seen yesterday. Overnight, US benchmark indexes lost up to 2 per cent as concerns grew that the dive in the Chinese stocks was the start of another volatile period after last summer's dramatic market rout.  Back on street, stocks from Realty, Oil & Gas and Consumer Durables counters were supporting the markets’ uptrend, while those from IT, Banking and FMCG counters were adding to the underlying cautious undertone. In scrip specific development, shares of Suven Life Sciences have surged after the company secured three product patents for a drug used in the treatment of neurodegenerative diseases. Furthermore, Siti Cable Network has rallied after the Reserve Bank of India (RBI) hiked foreign institutional investors' (FIIs) investment limit in the company.

The market breadth on BSE was positive, out of 2493 stocks traded, 1577 stocks advanced, while 829 stocks declined on the BSE. 

The BSE Sensex is currently trading at 25648.73, up by 25.38 points or 0.10% after trading in a range of 25589.13 and 25766.76. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.20%, while Small cap index up by 0.46%.

The top gaining sectoral indices on the BSE were Realty up by 1.07%, Oil & Gas up by 0.78%, Consumer Durables up by 0.43%, Auto up by 0.34% and Capital Goods up by 0.33%, while IT down by 0.48%, TECK down by 0.41%, Bankex down by 0.19%, FMCG down by 0.07% and Power down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.29%, Mahindra & Mahindra up by 2.07%, GAIL India up by 1.97%, Tata Steel up by 1.79% and ONGC up by 1.34%. On the flip side, Coal India down by 1.13%, TCS down by 0.93%, Hindustan Unilever down by 0.89%, Axis Bank down by 0.74% and Adani Ports &Special down by 0.72% were the top losers.

Meanwhile, the commerce Ministry wants to create a fund aimed at boosting India's shrinking exports, proposing a financing mechanism that would discourage exports of raw material and help local value addition. On January 6 the Ministry of Commerce & Industry is likely to pitch the idea of the export development fund in pre-Budget consultations with the finance ministry.

The Commerce Ministry will suggest that the government provide 50% of the funds, while the remainder can come from taxation of exports of raw material such as iron ore. This fund will solve the twin purpose of financing exports and help in their marketing as there is a need for aggressive marketing for the exports at this point of time, particularly of small and medium enterprises.

Earlier, in order to boost shipments, the government had increased support for products made by SMEs such as industrial machinery, machine tools, bicycle parts and hand tools used in agriculture, among others, and raised allocations under the Merchandise Exports from India Scheme to Rs 21,000 crore from Rs 18,000 crore.

Contracting for the twelve month in a row, India’s exports plunged 24 percent in November to $20 million. The significant fall in exports is attributed to weak global demand, amid a tepid global economic recovery. April-November exports fell 18.5% from a year ago. Only seven of top 30 export goods, including carpets, jute products and tea, registered an increase in November, compared with nine in October. The constant decline in exports has raised doubts about the country achieving last year's export number of $310.5 billion.

The CNX Nifty is currently trading at 7801.75, up by 10.45 points or 0.13% after trading in a range of 7783.20 and 7831.20. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.35%, Mahindra & Mahindra up by 2.30%, GAIL India up by 1.92%, Tata Steel up by 1.89% and ONGC up by 1.53%. On the flip side, Bank Of Baroda down by 2.65%, PNB down by 1.60%, Power Grid down by 1.53%, Hindustan Unilever down by 1.11% and Coal India down by 1.00% were the top losers.

Asian markets were trading mostly in green, Shanghai Composite was up by 0.41%, FTSE Bursa Malaysia KLCI up by 1.04%, KOSPI Index up by 0.64%, Jakarta Composite up by 1.16% and Nikkei 225 was up by 0.4%. On the flip side, Hang Seng was down by 0.02% and Taiwan Weighted was down by 0.44%.