Markets extend previous session gains with positive opening on Friday

With a positive opening Indian equity markets have extended their last session gains and are now trading higher by over half a percent on sustained buying by fund and retail investors. Meanwhile, broader markets were in-line with the benchmark indices. The BSE mid-cap index surged 0.61 per cent and small-cap index rose 0.29 per cent. Sentiment got boost with foreign direct investment (FDI) in the country more than doubling to about $ 4.5 billion in December 2015. In December 2014, India had received $2.16 billion. Further, some support also came in with the statement of IMF chief Christine Lagarde that India and Mexico are enjoying robust growth even as emerging economies as a whole are facing the harsh reality of slow growth and reversal of capital flows. Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 195.92 crore on February 4, 2016, as per provisional data released by the stock exchanges. On the secrotal front traders were seen piling up position in Bankex, Auto, FMCG, IT and TECK, while selling was witnessed in Power and Oil & Gas.

In the scrip specific development, Tata Steel declined over 2% on the BSE after the company reported a net loss of Rs.2,127 crore in the December quarter.

On the global front, the US markets ended slightly higher on Thursday as investors digested weaker-than-expected economic data and kept an eye on falling oil prices. Asian markets were trading mixed as Investors were treading cautiously ahead of the release of the closely-watched US jobs data later in the day and as the US dollar weakened.

Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,400 and 24,450 levels respectively. The market breadth on BSE was positive in the ratio of 891: 648 while 79 scrips remained unchanged.

The BSE Sensex is currently trading at 24468.02, up by 129.59 points or 0.53% after trading in a range of 24345.79 and 24469.73. 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 0.61%, while Small cap index gained 0.29%.

The top gaining sectoral indices on the BSE were Bankex up by 0.88%, Auto up by 0.70%, FMCG up by 0.67%, IT up by 0.59% and TECK up by 0.54%, while Power down by 0.19% and Oil & Gas down by 0.10% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.45%, Hero MotoCorp up by 2.21%, Tata Motors up by 1.73%, Sun Pharma Inds. up by 1.54% and Hindustan Unilever up by 1.33%. On the flip side, Tata Steel down by 3.52%, GAIL India down by 2.33%, Lupin down by 1.82%, Maruti Suzuki down by 1.45% and NTPC down by 0.91% were the top losers.

Meanwhile, something which can disturb the government and Reserve Bank of India’s (RBI) assumptions and calculations, the Consumer Confidence and Inflation Expectation Survey of Households for December 2015 conducted by RBI has said that Indian households expect inflation at over 10 percent in the year ahead, twice as much as RBI's retail inflation target of 5 percent by March 2017.

The survey providing an assessment of respondents’ perceptions on general economic conditions and own financial situation during the current period and a year ahead stated that Indian households expect inflation at 10.5 percent in the next one year and 10.3 percent each for current and next three months. In terms of qualitative response, the proportion of respondents expecting price rise by ‘more than current rate’ for prices in general as well as prices in all product groups (except cost of services) decreased marginally, while in terms of quantitative responses, common respondents’ expect similar level of inflation as their current inflation perceptions, for three-month ahead period based on their own consumption and buying experiences.

The survey shows that self-employed, retired persons and daily workers have comparatively higher inflation expectations for three month ahead period based on median inflation rates. The survey covered inflation expectations of 4,828 urban households' individual consumption basket across 16 cities and among them a majority of the respondents -- 90 percent -- expect prices to increase over the next three months and a year ahead.

The separate latest Consumer Confidence Survey said that current Situation Index (CSI) remained unchanged at its level as in the last quarter (September 2015). Future Expectations Index (FEI) increased fractionally on account of increase in positive perceptions on economic conditions, income and employment in the current round of survey as compared to September 2015 round. Though, the optimism regarding increase in future income (one-year ahead) is higher with net response improving by 2 percentage points as compared with September 2015 round of survey. However, the respondents reported increase in negative perceptions on spending during current period as compared to one-year ago and one-year ahead as compared to current situation. Employment outlook for one-year ahead as well as current scenario as compared to previous year, improved in this round, also the current sentiments on price levels as compared to one-year ago showed a marginal improvement.

The CNX Nifty is currently trading at 7441.25, up by 37.25 points or 0.50% after trading in a range of 7406.65 and 7443.85. There were 38 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.36%, Axis Bank up by 2.27%, Hero MotoCorp up by 2.12%, Tata Motors up by 1.84% and Ambuja Cement up by 1.64%. On the flip side, Tata Steel down by 3.45%, GAIL India down by 2.51%, Lupin down by 1.83%, Maruti Suzuki down by 1.49% and Cairn India down by 1.22% were the top losers.

Asian markets were trading mixed, KOSPI Index increased 1.5 points or 0.08% to 1,917.76, FTSE Bursa Malaysia KLCI increased 5.47 points or 0.33% to 1,662.24, Hang Seng increased 82.5 points or 0.43% to 19,265.59 and Jakarta Composite increased 92.71 points or 1.99% to 4,758.52.

On the flip side, Nikkei 225 decreased 253.43 points or 1.49% to 16,791.56, Taiwan Weighted decreased 68.24 points or 0.84% to 8,063.00 and Shanghai Composite decreased 3.14 points or 0.11% to 2,777.88.