Benchmarks trim gains; trade continues in green

After getting a gap-up start, Indian equities trimmed gains but continued to trade in green in the late morning session on account of short covering and value buying at lower levels after the sharp correction in the previous session. Sentiments remained up-beat with Finance Minister Arun Jaitley’ statement that Indian economy has emerged as one of the fastest growing economies in the world indicating that the economy is firmly on the path of economic revival. Some support also came with the report that the World Bank expects India's growth to pick up to 7.8% in the next financial year, projecting it to be the fastest growing economy in the world for the next three years by a distance, riding on stronger domestic policy reforms. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 1051.74 crore on January 07, 2016. Meanwhile, some buying witnessed in Auto stocks as Union Minister for Road, Transport & Highways, Nitin Gadkari will meet representatives of automobile companies on January 14 to allay their concerns about the Government’s move to directly move from BS IV emission norms to BS VI emission norms by April 2020. Besides, some oil & gas stocks recovered after Crude oil prices gained more than 2 per cent tracking higher Asian share after it fell to 12-year lows on Thursday on China concerns.

On the global front, Asian markets were trading mostly higher with China shares leading the gains after China announced late on Thursday it suspended its new stock market circuit breaker introduced only on Monday as the system failed to reduce market volatility. Overnight US stocks sold off further on Thursday, giving the Dow and S&P 500 their worst four-day starts to a year ever, dragged down by another drop in Chinese equities and oil prices at 12-year lows. Back home, stocks from Realty, Oil & Gas and Power counters were supporting the markets’ uptrend, while those from Metal and Capital Goods counters were adding to the underlying cautious undertone. In scrip specific development, shares of GM Breweries have surged after the company reported a strong 157% year-on-year (YoY) growth in net profit at Rs 15.57 crore for the third quarter ended December 2015. On the other hand, shares of Titan Company have declined amid reports that the directive by the government to lower the transaction limit to quote PAN to Rs 2 lakh from Rs 5 lakh earlier would hurt sales in the current fiscal.

The market breadth on BSE was positive, out of 2402 stocks traded, 1669 stocks advanced, while 588 stocks declined on the BSE. 

The BSE Sensex is currently trading at 24938.07, up by 86.24 points or 0.35% after trading in a range of 24916.02 and 25083.55. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.80%, while Small cap index up by 0.98%.

The top gaining sectoral indices on the BSE were Realty up by 1.15%, Oil & Gas up by 1.11%, Power up by 0.96%, IT up by 0.90% and FMCG up by 0.89%, while Metal down by 0.56% and Capital Goods down by 0.56% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.75%, ITC up by 1.47%, GAIL India up by 1.23%, Reliance Industries up by 1.19% and Sun Pharma up by 1.12%. On the flip side, Coal India down by 2.42%, Bajaj Auto down by 2.01%, Larsen & Toubro down by 1.46%, Adani Ports &Special down by 0.92% and Hero MotoCorp down by 0.68% were the top losers.

Meanwhile, showing the clear dismal picture of the country's outbound merchandise shipments, India’s Exports in the current financial year 2015-16 are expected to decline about 13 per cent to $270 billion due to global demand slowdown and fall in crude oil prices. The figure was mentioned by commerce secretary Rita Teaotia at a meeting with the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry, (Ficci) among other groupings.

If exports of petroleum products are excluded, then the decline in exports is only 9.6 per cent in dollars. Rita Teaotia has also said that the imports during the fiscal would stand around $ 390 billion. So the trade deficit would aggregate at $120-125 billion in 2015-16. The secretary throws light on India's dismal export performance in the wake of slowing global demand. Falling imports and exports have an impact on manufacturing and this is substantiated by the manufacturing data. Further the declining exports would have implications for the job market.

According to exporters body Federation of Indian Export Organisations (FIEO), in the financial year 2008-09, the country's outbound shipments were less than $270 billion, around $210 billion. In 2014-15, India’s merchandise exports were $310.5 billion. Exports have fallen over the past one year and in November; they shrank by a quarter from a year earlier to $20 billion, while imports declined 30% to almost $30 billion.

The CNX Nifty is currently trading at 7594.35, up by 26.05 points or 0.34% after trading in a range of 7585.50 and 7634.10. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.22% and BPCL up by 1.85% and Tech Mahindra up by 1.82% and Tata Motors up by 1.59% and ITC up by 1.52%. On the flip side, Coal India down by 2.39%, Bajaj Auto down by 2.03%, ACC down by 1.83%, Larsen & Toubro down by 1.57% and Ambuja Cement down by 1.27% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI was up by 0.23%, KOSPI Index up by 0.55%, Taiwan Weighted up by 0.52%, Shanghai Composite up by 2.67%, Nikkei 225 up by 0.11% and Hang Seng up by 1.07%. On the flip side, Jakarta Composite was down by 0.22%.