Benchmarks continue firm trade in late afternoon session

Indian equity benchmarks continued their firm trade in the late afternoon session on account of buying in front line blue chip counters and taking cues from global counterparts. The sentiments got support after Shanghai markets surged on hopes of government stimulus after China’s economic growth cools to 6.8% in the December quarter. The sentiments also got some support on witnessing some buying in banking stocks after the RBI governor Raghuram Rajan and two of his deputies met with banks and other financial institutions to discuss stressed loans in the banking system. Traders were seen piling position in Capital Goods, Bankex and Auto stocks while selling was witnessed in IT sector stocks. In scrip specific development, Autoline Industries rallied after the company decided to enter into non-auto sector like hospital equipments and railway & defence businesses. Delta Corp was trading firm on reporting better than estimated earnings for the December quarter. Subex was trading in green after it has launched a new version of the industry leading Fraud Management solution, ROC Fraud Management 8.3.

On the global front, the Asian markets were trading in green while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading above the psychological 7,400 and 24,400 levels respectively. The market breadth on BSE was positive in the ratio of 1692:840 while 140 scrips remained unchanged.

The BSE Sensex is currently trading at 24467.92, up by 279.55 points or 1.16% after trading in a range of 24247.23 and 24563.34. 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 1.45%, while Small cap index up by 1.56%.

The gaining sectoral indices on the BSE were Capital Goods up by 2.64%, Bankex up by 1.65%, Auto up by 1.33%, Power up by 1.32% and Realty up by 1.27%, while IT down by 0.05% was the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & Special up by 4.88%, Axis Bank up by 4.62%, Tata Motors up by 3.79%, Larsen & Toubro up by 3.75% and Bharti Airtel up by 3.03%.

On the flip side, Wipro down by 1.33%, Coal India down by 1.08%, Mahindra & Mahindra down by 1.05%, Maruti Suzuki down by 0.34% and Asian Paints down by 0.34% were the top losers.

Meanwhile, in order to help reduce the sovereign yields which are pushing prices up, the Reserve Bank of India (RBI) has asserted that it will buy back Rs 10,000 crore worth of government bonds. RBI will purchase the government bonds in the four different sets of securities on January 20, 2016.

Out of the total four securities, Central Bank will take two of the securities from the investors that are extremely liquid papers including the earlier benchmark bonds maturing in May 2025 and March 2030. This will help to create replacement demand of government bonds from investors, who shall have sold those to RBI. Furthermore, the buying back of long term papers is seen as a measure that should trigger a rally in sovereign bond yields.

During 2015, RBI had slashed interest rate by 125 basis points, but towards the end of the year, the benchmark bond yielded just five to 10 basis points at 7.70-7.80%, lower than the level seen at the beginning of the year.

Earlier, in December RBI had offered to buy four government securities for an aggregate value of Rs.10,000 crore through an auction on 7 December, saying that the move is based on its assessment of prevailing and evolving liquidity conditions. It was the first such auction since January 2014.

The CNX Nifty is currently trading at 7437.70, up by 86.70 points or 1.18% after trading in a range of 7364.15 and 7462.75. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Adani Ports & Special up by 4.81%, Idea Cellular up by 4.71%, Axis Bank up by 4.70%, Tata Power up by 4.46% and Tata Motors up by 4.26%.

On the flip side, Wipro down by 1.01%, Mahindra & Mahindra down by 0.89%, HCL Tech down by 0.87%, Power Grid down by 0.87% and Coal India down by 0.87% were the top losers.

The Asian markets were trading in green; Jakarta Composite increased 5.64 points or 0.13% to 4,486.91, FTSE Bursa Malaysia KLCI increased 8.99 points or 0.55% to 1,631.63, KOSPI Index increased 11.19 points or 0.6% to 1,889.64, Taiwan Weighted increased 43.7 points or 0.56% to 7,854.88, Nikkei 225 increased 92.8 points or 0.55% to 17,048.37, Shanghai Composite increased 93.9 points or 3.22% to 3,007.74 and Hang Seng increased 398.36 points or 2.07% to 19,635.81.

The European markets were trading in green; UK’s FTSE 100 increased 88.66 points or 1.53% to 5,868.58, France’s CAC increased 78.83 points or 1.88% to 4,268.40 and Germany’s DAX increased 171.94 points or 1.81% to 9,693.79.